Pull and
Kanban in SAP
Topics
 What is Pull and when do I use it
 Procurement Decision Tree
 Kanban Calculator
 SAP reports
 Fields
 eKanban/Reorder Point Setup
3
Purchase Pull System
• Pull systems establish strategically located “buffers” of parts within a process.
• Inventory (or part) replenishment is “triggered” based on consumption versus
pushed based on net requirements.
Replenishment Signal (Purchase Order)
Consumption
Supplier
Supplier Lead Time
8 Weeks
Strategic
Buffer
Manufacturing
Process Lead Time
2 Weeks
Customer Expectation
3 Weeks
• Part shortages are reduced and/or eliminated (reducing expediting)
• Total inventory is reduced through better mix (right sizing)
4
Pull System Design Drivers
•
Pull is about
– Set Up
– Maintenance
•
Demand is dynamic and changes over time
– Seasonality, ramp up/down, engineering changes, etc. drive need to resize Kanban
quantities
– Need to review Kanban sizes at least quarterly
Goal
1. Establish
inventory control
(Kanban sizing)
2. Stabilize
process
Effectiveness, then efficiency
3. Reduce
inventory
5
Kanban
6
Coefficient of Variation?
• Coefficient of Variation (CoV) measures the variability of demand
– It is defined as the ratio of the standard deviation (σ) to the mean (μ)
• Used to determine if an item is a good candidate for pull
– Low variability: good candidate for pull
– High variability: poor candidate for pull
CoV>=1.5
1.0<CoV>1.5
CoV<=1.0
Push
Additional Data
Required
Pull
7
CoV Example
Demand
Weeks
1
2
3
4
5
6
7
8
9
10
11
12
Mean (Average)
Standard Deviation
(Variation)
CoV
A
B
C
25
25
25
25
25
25
25
25
25
25
25
25
25
30
40
40
30
30
70
0
0
0
0
60
0
25
0
0
0
0
0
150
0
0
0
0
0
150
25
0.0
25.0
58.4
0.0
1.0
2.3
• Parts A and B
meet the rule of
thumb COV<=1
• Part C has same
average
demand, but
high variability
8
CoV alone does not always
indicate a good candidate for
pull
9
The Run Ratio
Demand
Weeks
A
B
C
25
25
25
25
25
25
25
25
25
25
25
25
Mean (Average) 25
30
40
40
30
30
70
0
0
0
0
60
0
25
0
0
0
0
0
150
0
0
0
0
0
150
25
1
2
3
4
5
6
7
8
9
10
11
12
Standard
Deviation
(Variation)
CoV
Run Ratio
0.0
– A: 12/12=100%
– B: 7/12=58%
– C: 2/12=17%
25.0 58.4
0.0 1.0 2.3
100% 58% 17%
Frequency of Demand
• The Proportion of Time a
Part is Used or Sold
10
Kanban Calculator
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Kanban Calculator
 Helps determine good candidates for Pull
–Performs all of the calculations automatically
–Compares current situation vs. expected if part is converted to pull
 Calculates needed stocking levels (bin sizes) to maintain desired
service level
– Requires Master Data integrity
– Fields can be manually adjusted in the calculator
12
Calculator Transactions
ZMMR
ZMEV
ZPIRN
MC.1 and
MCBZ
PK18
ZMMR is the first transaction that is
run. This transaction gives us the
Usage data for the materials.
ZMEV is the second transaction that
is run. This transaction gives us the
master data for the materials.
ZPIRN is the third transaction that is
run. This transaction gives us the
Supplier for the materials.
MC.1 is the fourth transaction that is
run. This transaction is used to get
the 3 month average inventory and
forecast data for the materials.
PK18 is the last transaction that is
run. This gives us the current Bin
sizes for any materials currently on
Kanban
13
Calculator Demo
14
Kanban
Kanban
Internal
External
Works with Production Orders
for internally procured material
between workcenters at a plant.
Works with purchased parts,
auto-generating PO’s,
and vendor replenishment.
Regular
Inventory
Consignment
Inventory
15
SAP eKanban Master Data
•
Supply Area
–
–
•
Person Responsible
Storage Location
Control Cycle
–
–
–
Number of Bins
Bin Quantity
Replenishment Strategy
•
•
•
•
In house Production
External Source
Stock Transfer
Kanban Specific Vendor (if the vendor has multiple Ordering addresses)
–
New Info Record
16
SAP eKanban External Procurement
•
•
•
•
17
Step 1: Create Supply Area PK05
Step 2: Alter Material Master MM02
Step 3: Enter Materials into PK01
Step 4: Managing the eKanban board
Step 1: Create Supply Area PK05
First Transaction PK05
The supply area
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Step 1: Create Supply Area PK05
Click New Entries to Setup
Supply Area Information
19
Step 1: Create Supply Area PK05
Step 1
Enter the Supply
Area and description
Step 2
Click drop down
for Storage Location be
sure to choose the proper
area (thus must be an IM
location)
Step 3
Click drop down and
select corresponding MRP
20
controller
code of the area
EP Step 2: Alter Material Master
Enter “MM02” to alter the
Material Master. Enter the
desired Part Number and
Plant Number on the
following screens
21
EP Step 2: Alter Material Master
Select “MRP1” tab
Change MRP Type
to “ND”
You may want to create a
special MRP controller for
eKanban Items
22
EP Step 2: Alter Material Master
Select “MRP 2” tab
Enter desired backflush
location that items will be
received into.
Enter Lead Time vendor
has committed to.
23
EP Step 2: Alter Material Master
In the “MRP 4” tab
click
“Organizational
Levels”
Key in the IM
storage location
you wish the
items to drop into
once received
24
EP Step 2: Alter Material Master
Change this Field to 1
(must be excluded
from MRP) and save.
This is also accessible
through the
transaction MMSC
25
EP Step 3: Enter Materials PK01
Enter transaction PK01 to
create Kanban control
cycle
26
EP Step 3: Enter Materials PK01
Enter Material Number
Enter Plant Number
Enter Supply Area
27
EP Step 3: Enter Materials PK01
Enter Number of Kanbans
Enter Kanban Quantity
Enter “001” to issue PO’s
and press “Enter”
28
EP Step 3: Enter Materials PK01
Enter Purchasing Org
Enter Vendor #
29
Leave Agreement field
blank unless using
Scheduling Agreement,
then fill in Agreement #
and Line #
EP Step 3: Enter Materials PK01
Kanban Indicator
must be marked
“X” for Sch.
Agreements at the
Line Item level
30
EP Step 4: Managing the eKanban board
Enter transaction to
view kanban Bin status
and to process Kanban
order.
31
EP Step 4: Managing the eKanban board
Enter Plant Number and
Supply Area
32
EP Step 4: Managing the eKanban board
In this view you can see the status of Bins in the Supply Area. This is where the
operators can Empty the Bin in order to create a Purchase order to replenish
stocking level of the Bin. The initial status of the Bin is Wait”. There are several
statuses that can be set. Check the legend to see. To set the Bin empty, Select
33 bins and click the “To Empty” button. Multiple Bins can be emptied at the
both
same time.
EP Step 4: Managing the eKanban board
When a Kanban Bin is emptied the Bin icon will turn red.
A Purchase order will automatically be released.
34
EP Step 4: Managing the eKanban board
To change a Bin status to anything other than empty or full, Right click on a Bin
and select “Kanban correction.”
35
EP Step 6: Managing the eKanban board
Double click a line. Select the desired status. If you are keying it to full, enter a
qty. Once complete, select the “Status/qty” button.
36
EP Step 6: Managing the eKanban board
To set to the “Full” Status manually, select a bin and click “To Full”. This will
make a FULL MIGO_GR! So be careful. Also, the bin will automatically be set to
37 Full once any partial/full Migo_GR has been posted against the PO.
EP Step 4: Managing the eKanban board
To get any information about the bin, double-click on a bin. The PO can be
altered by clicking the Replenishment button. The PO is also displayed here.
38
The time the Bin status was changed is displayed in EST.
Triggering Kanban in SAP
Two Ways to Trigger Kanban:
1. Using the PK13N Transaction in SAP
2. Using the RF gun and Scanning the Kanban
Label
39
SAP Kanban - Demand View
SAP Transaction: PK13N
 Green Bin (FULL) = Bin is full or being used currently in production
 Red Bin (EMPTY) = Bin is empty (on order)
 Purple (WAIT) = Temporary status
40
Kanban RF Process
1. When a Kanban Bin is Empty,
Scan the Barcode Card for the Empty
Bin
2. Flip the Status Card to “On
Order”
BIN 1
BIN 2
BIN EMPTY
41
SAP RF Menu
Using the RF Tablet, Select 6  3  1
42
Reorder Point/Min. Max.
• The reorder point ("ROP") is the level of inventory when a fresh
order should be made with suppliers to bring the inventory up
to a fixed level or by a fixed quantity.
Reorder point quantity includes safety
stock. The PO quantity depends on the
lot size (e.g., fixed).
43
Settings
Fixed Order Quantity
Maximum Stock Level
•
•
MRP Type = “ZR”
Lot Size Key = “HB” – Replenish to the
maximum stock level
Maximum Stock Level: This is a required entry.
It denotes the quantity of stock that may not
be exceeded
It calculates the Lot size using the following
two Formulas and creates an order proposal
using the greater of the two lot sizes calculated
•
•
•
•
•
•
•
44
MRP Type = “ZR”
Lot Size Key = “FX” – Fixed Order Quantity
Fixed Lot Size: This is a required entry. It
denotes the quantity that will be procured in
the event of a shortage.
If the amount of the shortage is less than the
fixed lot size, it is the fixed lot size that is
procured (and not the lesser quantity that is
actually required).
If the amount of the shortage is greater than
the fixed lot size, a multiple of the fixed lot
size is procured. The system creates several
purchase order proposals for this purpose.
Kanban vs. Reorder Point
Kanban
Reorder Point
Does not include future
demand
Forward Looking: includes
spikes
Operator triggers orders
System-driven (MRP) orders
Provides good visual control
BOMs MUST be accurate
Shop Floor Ownership
Purchasing Ownership
45
Questions
46