Exploit Standard SAP Kanban Processes to Manage Your Production

  • by Gaetano Altavilla, Senior SAP Practice Manager
  • April 2, 2014
Learn about the processes involved in Kanban production and get details about the main customizing settings to be done in the system in the case of external procurement of materials.
Learning Objectives

Reading this article, you will learn how to:

  • Define master data settings to implement Kanban processes
  • Use the Kanban board to create purchase orders and goods receipts
  • Complete the main steps for customization to activate Kanban processes in your system
Key Concept
The Kanban is a Japanese word meaning card signal. It represents any visual method used to show the need for parts or products to be moved or produced. The Kanban board is a central monitor tool used to manage all majority Kanban activities — for example, the creation of demands (e.g., purchase orders) or the posting of materials receipts (e.g., goods receipts).

Based on my experience, I provide Kanban solutions I have implemented in production environments for the SAP purchasing (MM-PUR), inventory management (MM-IM), and production planning (PP-Kanban) modules. In the implementations I have used standard Kanban transactions to fulfill the customer’s requirements plus the signal functionalities integrated with the supply area’s containers. Although I use SAP ERP Central Component (ECC 6.0), the processes I describe also apply to previous versions.

To use the Kanban process your production department should satisfy at least the following requirements:

  • The consumption of the Kanban materials should be relatively constant within a period that is longer than the replenishment lead time for procuring goods with a Kanban.
  • The supply source should be capable of producing a large number of small lots within a short period to ensure the ability to satisfy the production requirements.

The main advantages of the Kanban production process are:

  • The majority of the posting operations can be done automatically, based on your Kanban strategy (e.g., via automatic Kanban calculation and control signal).
  • Easy management of control cycles that define the relationship between the demand source (such as a production line) and the supply source (such as an external supplier).
  • Replenishments and goods receipts can be planned and executed in a simple and practical way using the Kanban board.
  • The entire process can be controlled and monitored via Logistic Information System (LIS).

In case of errors, various evaluation and post-editing options are available.

Kanban Business Flow

The typical Kanban business flow is shown in Figure 1. This is done via the Kanban board. The Kanban data fulfills the standard info type that is used in the LIS. This means that the LIS can be used to evaluate the Kanban activities within a specific period.


Figure 1
Typical Kanban business flow

Gaetano Altavilla

Dr. Gaetano Altavilla is a senior SAP practice manager. His focus is on pre-sales, delivery of SAP application solutions for large international corporations, and SAP knowledge management in Europe, the Middle East, and Africa (EMEA).

In his 18 years of SAP application experience working for many multinational companies, such as Procter & Gamble and Hewlett-Packard, he has covered a wide range of ERP logistic areas, focusing on the MM, WM, SD, LES, PP, PP-PI, PLM (QM, PM, PS) modules, as welll as CRM (TFM), SRM (EBP), SCM (SAP APO), and MES (ME) components.

Dr. Altavilla holds a degree with first-class honors in mathematics from the University of Naples and is certified in many SAP modules: SAP Logistics Bootcamp, SAP MM, SD, LE (SHP/WM/LE), PP, PLM (PM, QM, PS), SRM, CRM, SCM (APO), SCM (TM), FI, CO, and Solution Manager. He also has experience in ABAP/4 and application link enabling (ALE) and IDocs. He has participated in numerous industry conferences, such as the SAP Skills Conference in Walldorf at SAP SE.

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