SAP's Overlooked Electronic Kanban Can Bring New Efficiencies to Your Shop Floor

  • by Ned Falk, Senior Education Consultant, SAP
  • June 1, 2004
As a logistics professional, you might know that Kanban is a system to manage the execution of a manufacturer's shop
floor/distribution processes. It is a variation on the "two bin" system where parts are delivered to an assembly area in bins or other containers, one material per container.

In Kanban, the assembly worker uses the parts to build higher assemblies. When the worker uses the last part, he or she requests more from the source by simply returning the empty container or the attached card to the source. This "empty Kanban" is the physical signal to the supply source to make more (Figure 1).


Figure 1
Basic Kanban process

Although Kanban has worked well for many companies for many years without software, it works better with SAP R/3! SAP's electronic Kanban offers advantages such as:

  • Integration in cost accounting as if normal SAP logistics transactions were done manually

  • Integration in engineering change and part discontinuation

  • Automated Kanban calculations (quantity or number of Kanbans in a control cycle)

  • Integration with output control (purchase orders [POs] are sent to vendors in the normal way — by fax, EDI, etc.)

  • Performance monitoring and reporting on the Kanban replenishment process

  • Integrated error correction

  • Integration with or without running MRP

  • Support for just-in-time (JIT) scheduling agreements

  • Internet-based Kanban

In addition, SAP offers many configuration options that allow you to customize the integration and execution of Kanban for your company.

Ned Falk

Ned Falk is a senior education consultant at SAP. In prior positions, he implemented many ERP solutions, including SAP R/3. While at SAP, he initially focused on logistics. Now he focuses on SAP HANA, SAP BW (formerly SAP NetWeaver BW), SAP CRM, and the integration of SAP BW and SAP BusinessObjects tools. You can meet him in person when he teaches SAP HANA, SAP BW, or SAP CRM classes from the Atlanta SAP office, or in a virtual training class over the web. If you need an SAP education plan for SAP HANA, SAP BW, BusinessObjects, or SAP CRM, you may contact Ned via email.

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