Manufacturing with Kanban Supply into Production (233)

1. Manufacturing with Kanban Supply into Production (233) SAP Best Practices

2. Purpose, Benefits, and Key Process Steps • Purpose • This scenario focuses on different approaches to supply the production using Kanban-controlled business processes. • Comprehensive presentation of different Kanban processes • Benefits • The replenishment process controls itself and manual posting is reduced as far as possible. • Reduction in lead time and stock. • Components are not procured before they are needed (just in time). • Prevention of overproduction. Reduction of required storage space. • Simple and transparent method of organization. • Event control and alerting enable timely reaction to changes and issues in the production process • Key Process Steps • Creation an maintenance of Kanban control cycles • Creating Planned Independent Requirements and Material Requirements Planning (Plant) • Classic Kanban: External Procurement with scheduling agreements • Classic Kanban with JIT calls, calculation and alerting • Classic Kanban: In-house production (repetitive manufacturing) with quantity signal and trigger point • Classic Kanban: Stock transfer from warehouse with alerting • Event-driven Kanban with packaging instructions and alerting • Repetitive manufacturing backflush

3. Required SAP Applications and Company Roles • Required • Enhancement package 5 for SAP ERP 6.0 • Company Roles • Production Planner • Shop Floor Specialist • Warehouse Clerk • Purchaser

4. Detailed Process Description • Manufacturing with Kanban supply into production • The scenario Manufacturing with KANBAN supply into production focuses on a lean production control method within a repetitive manufacturing environment: use of KANBAN processing for lean replenishment • Repetitive Manufacturing is commonly used when a production process meets the following criteria: The same or similar products are produced over a lengthy period of time. The products produced are not manufactured in individually defined lots. Instead, total quantity is produced over a certain period at a certain rate per part-period. The products produced always follow the same sequence through the machines and work centers in production. Routings tend to be simple and do not vary much. • The KANBAN method for controlling production and material flow is based on the actual stock quantity in production. Material that is required on a regular basis is continually provided in small quantities in production. Replenishment or the production of a material is only triggered when a higher production level actually requires the material. This replenishment is triggered directly in production using previously maintained master data. The entries you have to make in the system are reduced to a minimum. All other actions in the system are carried out automatically in the background. • With KANBAN, the production process controls itself and manual posting is reduced as far as possible. The effect of this is a reduction in lead time and in stock.

5. Process Flow Diagram Manufacturing with Kanban supply into production (233) Purchaser Procurement of Materials Production Planner Planned Independent Requirements Operative MRP REM Planning Table Classic Kanban:In-house Production Classic Kanban with Scheduling Agreements Classic Kanban: Stock Transfer (Lean WM) Replenish-ment of rep. manuf. Material is required? Replenish-ment of external procurement material is required? Replenish-ment of stock transfer material t is required? Event-driven Kanban : In-house production Alerting Classic Kanban with JIT Calls Classic Kanban: Stock Transfer (Full WM) with Alerting Event-driven Kanben with packaging instructions Classic Kanban: In-house production with quantity signal and trigger point Shopfloor Specialist Postprocessing List Repetitive Manufacturing Backflush End Process Inventory Consumption @ Standard Cost Inventory Receipt @ Standard Cost Reprocessing List GI/GR Slip Additional Processes Scheduling Agreement with JIT Inbound (230) Agreement in Sales (231) Period-End Closing “General” Plant (181) CO-PA =Profitability Analysis, MRP = Material Requirements Planning, GI/GR = Goods Issue/Goods Receipt

6. Process Flow Diagram External Procurement using Kanban Additional Processes Scheduling Agreement with JIT Inbound (230) Production Planner Scheduling Agreements? Set Kanban to “EMPTY” Set Kanban to “FULL” JIT Calls? Check Dependent Requirements Set Kanban to “EMPTY” Set Kanban to “FULL” Kanban Precalculation Release Proposal Check changes and calculation Unlock Kanbans Alerting Event-driven/ Packaging Instr.? Create Event-driven Kanban Set Kanban to “FULL” Set Kanban to “EMPTY” Warehouse Clerk Goods Receipt Posting GR Slip Inventory Receipt @ Standard Cost Kanban set to “FULL” GR = Goods Receipt

7. Process Flow Diagram In-House Production and Stock Transfer using Kanban Production Planner In-house Production with quantity signal and trigger point? Release Control Cycle Unlock Kanbans Set Kanban to “EMPTY” Set Kanban to “FULL” Kanban withdawal In-house Production (Event-driven)? Create even-driven Kanban Check Kanban Status Set Kanban to “IN PROCESS” Set Kanban to “IN TRANSIT” Set Kanban to “FULL” Set Kanban to “EMPTY” In-house Production Set Kanban to “EMPTY” Set Kanban to “FULL” Stock Transfer (Lean WM)? Set Kanban to “EMPTY” Set Kanban to “FULL” Stock Transfer (Full WM)? Set Kanban to “EMPTY Set Kanban to “IN TRANSIT” Set Kanban to “FULL” Alerting Ware-house Clerk Confirm Transfer ORder

8. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision