Unit 4: The Kanban Principle

Lesson 1: Drafting KanbanLesson 2: Using Kanban in Production

Lesson 1: Drafting KanbanLesson ObjectivesAfter completing this lesson, you will be able to:

Explain the characteristics of the Kanban principle

TSCM42_2 Unit 4 Lesson 1

TSCM42_2 Figure 61: Application Areas Unit 4 Lesson 1

TSCM42_2 Figure 62: Kanban Principle Unit 4 Lesson 1

TSCM42_2 Figure 63: Kanban: Characteristics Unit 4 Lesson 1

SummaryYou should now be able to:

Explain the characteristics of the Kanban principle

TSCM42_2

Lesson 2: Using Kanban in ProductionLesson ObjectivesAfter completing this lesson, you will be able to:

Describe the main steps of the Kanban procedure

TSCM42_2 Unit 4 Lesson 2

TSCM42_2 Figure 64: Using Kanban in Production Unit 4 Lesson 2

TSCM42_2 Figure 65: Master Data: Production Supply Area Unit 4 Lesson 2

TSCM42_2 Figure 66: Master Data: Kanban Control Cycle Unit 4 Lesson 2

TSCM42_2 Figure 67: Production Supply Using Control Cycles

Unit 4 Lesson 2

TSCM42_2 Figure 68: Setting the Kanban to Empty = Triggering Replenishment

Unit 4 Lesson 2

TSCM42_2 Figure 69: Setting Kanban to Full = Posting Goods Receipt

Unit 4 Lesson 2

TSCM42_2 Figure 70: Plan-Controlled Production versus Kanban

Unit 4 Lesson 2

Exercise 19: Check a Kanban Material.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line. Check the material and supply area prerequisites first.Verify Kanban Material Settings and Supply AreaComponent T-T7## (BIOS) is procured using Kanban. Check to see if the master data is set up correctly for Kanban.

1. Check whether material T-T7## in plant 1200 at storage location PL03 is excluded from MRP, so that its replenishment elements are not generated via MRP but via Kanban.

2. Is this material excluded from MRP at storage location PL03?

TSCM42_2 Unit 4 Exercise 19

Exercise 19: Check a Kanban Material.

________________________________________________________________________________________________________

3. Is the same material T-T7## also excluded from MRP at storage location 0001 in plant 1200? Hint: Select Organizational Levels, then enter 0001 in the Storage Location field and choose ENTER.________________________________________________________________________________________________________

4. Which MRP indicator is set for this material at storage location 0001?________________________________________________________________________________________________________

5. Review the stock/requirements list for material T-T7## in plant 1200.Write down the available quantities (stocks):____________________________________________________

TSCM42_2 Unit 4 Exercise 19

Exercise 19: Check a Kanban Material.

6. How does the system display materials that are excluded from MRP at a storage location in the stock/requirements list?________________________________________________________________________________________________________

7. Supply area T-P3## has been set up to stage materials at the production line. Display the supply area T-P3## in plant 1200 by going to the control cycle.To which storage location and person responsible is the supply area assigned?

TSCM42_2 Unit 4 Exercise 19

Solution 19: Check a Kanban Material.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line. Check the material and supply area prerequisites first.Verify Kanban Material Settings and Supply AreaComponent T-T7## (BIOS) is procured using Kanban. Check to see if the master data is set up correctly for Kanban.

1. Check whether material T-T7## in plant 1200 at storage location PL03 is excluded from MRP, so that its replenishment elements are not generated via MRP but via Kanban.

TSCM42_2 Unit 4 Solution 19

Solution 19: Check a Kanban Material.

a) SAP ECC menu path: Logistics Production Master data Material master Material Display Display current (MM03)

b) Choose Enter and select the MRP 4 view.c) Select Continue.d) Enter plant 1200 and storage location PL03.e) Select Continue.

2. Is this material excluded from MRP at storage location PL03?________________________________________________________________________________________________________a) Yes. Material T-T7## is excluded from MRP at storage location PL03, as you

can see from the Storage Location MRP indicator.

TSCM42_2 Unit 4 Solution 19

Solution 19: Check a Kanban Material.

3. Is the same material T-T7## also excluded from MRP at storage location 0001 in plant 1200? Hint: Select Organizational Levels, then enter 0001 in the Storage Location field and choose ENTER.________________________________________________________________________________________________________a) No. Material T-T7## is not excluded from MRP at storage location 0001.

4. Which MRP indicator is set for this material at storage location 0001?________________________________________________________________________________________________________a) The MRP indicator for material T-T7## at storage location 0001 is set to blank,

which means that at storage location 0001, the material is planned using MRP.5. Review the stock/requirements list for material T-T7## in plant 1200.

Write down the available quantities (stocks):____________________________________________________

TSCM42_2 Unit 4 Solution 19

Solution 19: Check a Kanban Material.

a) SAP ECC menu path: Logistics Production MRP Evaluations Stock/reqmts list (MD04)

b) Enter material T-T7##, plant 1200 and select Continue.6. How does the system display materials that are excluded from MRP at a storage

location in the stock/requirements list?________________________________________________________________________________________________________a) Materials that are excluded from MRP at a storage location are displayed in an

individual planning segment in the stock/requirements list.7. Supply area T-P3## has been set up to stage materials at the production line.

Display the supply area T-P3## in plant 1200 by going to the control cycle.To which storage location and person responsible is the supply area assigned?

TSCM42_2 Unit 4 Solution 19

Solution 19: Check a Kanban Material.

a) SAP ECC menu path: Logistics Production KANBAN Supply Area Display (PK06)

b) Enter plant 1200, and select Continue.c) Scroll to find your supply area T-P3## and select Details.d) The supply area is assigned to storage location PL03 and the person

responsible is L3.e) Select Back twice.

TSCM42_2 Unit 4 Solution 19

Exercise 20: Check the Kanban Control Cycle.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line.Verify the Kanban Control Cycle SettingsIn plant 1200, component T-T7## (BIOS) in supply area T-P3## is to be staged directly at the production line.

1. Review the control cycle to see which replenishment strategy is used to stage material at the production line.

2. Since we are dealing with a control cycle for external procurement, the supply source in this case is a vendor. Which supply source has been entered in the control cycle for replenishment of component T-T7##?

TSCM42_2 Unit 4 Exercise 20

Exercise 20: Check the Kanban Control Cycle.

________________________________________________________________________________________________________

3. What method of external procurement is being used? Finally, leave the transaction.________________________________________________________________________________________________________

TSCM42_2 Unit 4 Exercise 20

Solution 20: Check the Kanban Control Cycle.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line.Verify the Kanban Control Cycle SettingsIn plant 1200, component T-T7## (BIOS) in supply area T-P3## is to be staged directly at the production line.

1. Review the control cycle to see which replenishment strategy is used to stage material at the production line.a) SAP ECC menu path:Logistics Production KANBAN Control

Cycle Control Cycle Maintenance (PKMC)

TSCM42_2 Unit 4 Solution 20

Solution 20: Check the Kanban Control Cycle.

b) Use the extended selection and enter material T-T7##, plant 1200, supply area T-P3## and select Execute.

2. Since we are dealing with a control cycle for external procurement, the supply source in this case is a vendor. Which supply source has been entered in the control cycle for replenishment of component T-T7##?________________________________________________________________________________________________________a) The supply source is vendor 2 (Electronic Components Distributor).

3. What method of external procurement is being used? Finally, leave the transaction.________________________________________________________________________________________________________a) Purchase orders are used, as you can see from the external procurement

replenishment strategy.

TSCM42_2 Unit 4 Solution 20

Exercise 21: Proceed Kanban Execution.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line.Determine the current Kanban situation in the system. If your stock situation requires it, replenish the BIOS chip T-T7##, with the Kanban technique.Carry out the Kanban Process

1. Access the demand source view of the Kanban board for supply area T-P3## in plant 1200.

2. How many containers are there in the SAP ECC system for replenishment of material T-T7##?____________________________________________________

TSCM42_2 Unit 4 Exercise 21

Exercise 21: Proceed Kanban Execution.

3. Let us assume that you, as the demand source, have just taken the last component out of a Kanban container. From the Kanban board, select one of the Kanban bins for material T-T7## and set it to empty.

4. In order to check the result of your action, go directly from the Kanban board into the stock/requirements list.

5. For what quantity has a purchase order been created?____________________________________________________

6. What is the current available quantity of material T-T7## at storage location PL03?____________________________________________________

7. Let us assume that you have just received a full container from the supply source. In the Kanban board, set the Kanban for material T-T7## to full.

TSCM42_2 Unit 4 Exercise 21

Exercise 21: Proceed Kanban Execution.

8. What is the result in the stock/requirements list? Hint: Select the row in the Kanban board for material T-T7## and choose from this transaction menu path Goto->Current stock/reqmts list. ________________________________________________________________________________________________________

TSCM42_2 Unit 4 Exercise 21

Solution 21: Proceed Kanban Execution.Business ExampleIn plant 1200, you use repetitive manufacturing to produce the mother board assembly T-B10##. In order to produce the assembly, the component T-T7## (BIOS) must be staged directly at the production line. Stocks of this component are replenished via external procurement from vendor 2 (Electronic Components Distributor) using Kanban. The components are delivered directly to a supply area, which is directly at the production line.Determine the current Kanban situation in the system. If your stock situation requires it, replenish the BIOS chip T-T7##, with the Kanban technique.Carry out the Kanban Process

1. Access the demand source view of the Kanban board for supply area T-P3## in plant 1200.a) SAP ECC menu path: Logistics Production KANBAN Control KANBAN

Board Demand Source View (PK13N)

TSCM42_2 Unit 4 Solution 21

Solution 21: Proceed Kanban Execution.

b) Set selection to supply area, enter supply area T-P3## enter plant 1200.c) Select Continue.

2. How many containers are there in the SAP ECC system for replenishment of material T-T7##?____________________________________________________a) Five containers are available for replenishment of material T-T7##.

3. Let us assume that you, as the demand source, have just taken the last component out of a Kanban container. From the Kanban board, select one of the Kanban bins for material T-T7## and set it to empty.a) Select one of the purple containers and select To Empty (Set Kanban Status

to Empty).Wait until you see the status change (color change of the container).

TSCM42_2 Unit 4 Solution 21

Solution 21: Proceed Kanban Execution.

4. In order to check the result of your action, go directly from the Kanban board into the stock/requirements list.a) Select the row in the Kanban board for material T-T7## and choose from this

transaction menu path: Goto Current stock/reqmts list.5. For what quantity has a purchase order been created?

____________________________________________________a) A purchase order has been created for a quantity equal to the Kanban

container quantity (20 pieces).6. What is the current available quantity of material T-T7## at storage location

PL03?____________________________________________________a) This varies. Write down the number belonging to PL03 that can be seen in the

stock-/requirements list. Choose the Back button.

TSCM42_2 Unit 4 Solution 21

Solution 21: Proceed Kanban Execution.

7. Let us assume that you have just received a full container from the supply source. In the Kanban board, set the Kanban for material T-T7## to full.a) Select the empty Kanban bin and select To Full (Set Kanban Status to Full).

Wait until you see the status change (color change of the container).8. What is the result in the stock/requirements list? Hint: Select the row in the

Kanban board for material T-T7## and choose from this transaction menu path Goto->Current stock/reqmts list. ________________________________________________________________________________________________________a) Because a goods receipt has been posted for the Kanban container quantity

(20 pieces), the available quantity for material T-T7## at storage location PL03 has increased by 20 pieces as you can see from the quantities you noted before. The purchase order is no longer displayed.

TSCM42_2 Unit 4 Solution 21

SummaryYou should now be able to:

Describe the main steps of the Kanban procedure

TSCM42_2

What are the objectives of the Kanban procedure?

TSCM42_2 Open Question Unit 4

What are the objectives of the Kanban procedure?.The following objectives can be achieved in many cases by controlling the production process in production itself and by reducing the manual posting effort required: shortening the lead times and reducing the stock

TSCM42_2 Open Question Unit 4

How is replenishment initiated in the Kanban procedure?

TSCM42_2 Open Question Unit 4

How is replenishment initiated in the Kanban procedure?.In the Kanban procedure, replenishment is initiated when the demand source sets the container in the system to empty.

TSCM42_2 Open Question Unit 4

Name the basic master data of Kanban.

TSCM42_2 Open Question Unit 4

Name the basic master data of Kanban..Supply areas, Control cycles

TSCM42_2 Open Question Unit 4

When is the goods issue typically posted in Kanban?

TSCM42_2 Open Question Unit 4

When is the goods issue typically posted in Kanban?.In Kanban, goods issues are typically backflushed when an order is confirmed (or when a goods issue is posted manually for an order). Emptying a Kanban does not result in a goods issue posting.

TSCM42_2 Open Question Unit 4

When is the goods receipt typically posted in Kanban?

TSCM42_2 Open Question Unit 4

When is the goods receipt typically posted in Kanban?.If the demand source sets the status to Full, the system automatically posts the goods receipt for the material with reference to the procurement element.

TSCM42_2 Open Question Unit 4

Course OverviewUnit 1: Introduction to Production ExecutionLesson 1: Distinguishing Production TypesFigure 1: SAP ERP Application OverviewFigure 2: SAP SCM Application OverviewFigure 3: SAP Components for Supply Chain ManagementFigure 4: Production Types for ProductionFigure 5: Production Type for Material FlowSummary

Open Question

Unit 2: Production with Process OrdersLesson 1: Drafting Process OrdersFigure 6: Application Areas of Process OrdersFigure 7: Process Order-Controlled Production: CharacteristicsFigure 8: Process Order-Controlled Production: Basic FunctionsFigure 9: Process Order-Controlled Production: Connection to Process Control LevelFigure 10: Cross-Application Functional ProcessProcedure: To Work with Process OrdersFigure 11: Master Data for Process OrdersFigure 12: Material and BatchFigure 13: Batch Management in Supply Chain ManagementFigure 14: Demo Scenario: Ice Cream Production in Plant 1100Exercise 1: Analyze Master Data of Process OrdersSummary

Lesson 2: Creating and Interpreting Process OrdersFigure 15: Processing a Process OrderFigure 16: Structure of the Process OrderFigure 17: Elements of the Process OrderFigure 18: Order Creation OptionsFigure 19: Integration with Planning (SAP ECC or SAP SCM-APO)Figure 20: Order Creation with Planned OrdersFigure 21: Batch DeterminationExercise 2: Process Planning for Process OrdersExercise 3: Evaluate the Results of MRPExercise 4: Create Process Orders by Conversion of Planned OrdersExercise 5: Evaluate Details of the Process OrderSummary

Lesson 3: Executing Process OrdersFigure 22: Order Release FunctionsFigure 23: Detailed Planning on Work CentersFigure 24: Example: Graphical Planning TableFigure 25: Availability Checks (Material, Capacity)Figure 26: Process ManagementExercise 6: Release a Process OrderFigure 27: HTML-based PI Sheet IFigure 28: HTML-based PI Sheet IIFigure 29: The Material Staging ProcessFigure 30: Standard Postings for Process OrdersFigure 31: Process Order: Goods Issue PostingFigure 32: Confirmations OverviewFigure 33: Types of ConfirmationsFigure 34: Flexible Data Entry with Process MessagesFigure 35: Functions for production in compliance with GMPFigure 36: Production in Compliance with GMPExercise 7: Execute a Process Order Using the PI SheetExercise 8: Review the Results of Execution on Production PlanningSummary

Lesson 4: Using Additional Functions with Process OrdersFigure 37: Enhanced Functions for Process OrderFigure 38: Material Quantity CalculationFigure 39: Resource Network and Resource SelectionFigure 40: Batch DerivationFigure 41: Process Manufacturing: Information SystemsFigure 42: Batch Where-Used ListSummary

Open QuestionOpen QuestionOpen QuestionOpen QuestionOpen Question

Unit 3: Repetitive ManufacturingLesson 1: Drafting Repetitive ManufacturingFigure 43: Application AreasFigure 44: Repetitive Manufacturing: CharacteristicsFigure 45: Repetitive Manufacturing: Basic FunctionsFigure 46: Cross-Application Functional ProcessFigure 47: Master Data for Repetitive ManufacturingFigure 48: Demo Scenario: PC Production in Dresden PlantExercise 9: Check the Material Master of Repetitive ManufacturingExercise 10: Check the Bill of Material of Repetitive ManufacturingExercise 11: Check the Routing of Repetitive ManufacturingExercise 12: Check the Product Cost Collector of Repetitive ManufacturingSummary

Lesson 2: Preparing Repetitive ManufacturingFigure 49: Repetitive Manufacturing: Process FlowFigure 50: Planning in Repetitive ManufacturingFigure 51: Basic Planning Strategies for Repetitive ManufacturingExercise 13: Verify Material Master Settings for Repetitive ManufacturingExercise 14: Create a Production Program for Repetitive ManufacturingExercise 15: MRP in Repetitive ManufacturingSummary

Lesson 3: Planning Line Loading in Repetitive ManufacturingFigure 52: Overview: Planning Line LoadingFigure 53: Actions for Manual Line Loading Planning (Example: ECC)Exercise 16: Perform Line Loading in Repetitive ManufacturingSummary

Lesson 4: Using Material Staging and ConfirmationFigure 54: Material Staging OptionsFigure 55: Backflush and Goods ReceiptFigure 56: Backflush: Reporting Point BackflushExercise 17: Perform Material Staging for Repetitive ManufacturingExercise 18: Confirm Production Quantities in Repetitive ManufacturingSummary

Lesson 5: Integrating Costing, Controlling, and ReportingFigure 57: Cost Debit/Credit (Product-Related Cost Object Controlling)Figure 58: Integration with ControllingFigure 59: Repetitive Manufacturing: Information SystemsFigure 60: Period-Based Repetitive Manufacturing: Additional FunctionsSummary

Open QuestionOpen Question

Unit 4: The Kanban PrincipleLesson 1: Drafting KanbanFigure 61: Application AreasFigure 62: Kanban PrincipleFigure 63: Kanban: CharacteristicsSummary

Lesson 2: Using Kanban in ProductionFigure 64: Using Kanban in ProductionFigure 65: Master Data: Production Supply AreaFigure 66: Master Data: Kanban Control CycleFigure 67: Production Supply Using Control CyclesFigure 68: Setting the Kanban to Empty = Triggering ReplenishmentFigure 69: Setting Kanban to Full = Posting Goods ReceiptFigure 70: Plan-Controlled Production versus KanbanExercise 19: Check a Kanban MaterialExercise 20: Check the Kanban Control CycleExercise 21: Proceed Kanban ExecutionSummary

Open QuestionOpen QuestionOpen QuestionOpen QuestionOpen Question

Unit 5: Capacity Requirements Planning (ERP)Lesson 1: Introducing Capacity Requirements PlanningFigure 71: Capacity Planning EnvironmentFigure 72: Capacity Planning and ElementsFigure 73: Display TypesSummary

Lesson 2: Evaluating CapacityFigure 74: Capacity EvaluationFigure 75: Overall ProfileFigure 76: Standard OverviewFigure 77: Selection and Display ParametersFigure 78: Detailed Capacity List and Its FunctionsFigure 79: Capacity Planning EnvironmentFigure 80: Capacity Requirements CalculationFigure 81: Setting Up a FormulaFigure 82: Capacity Load ReductionFigure 83: Methods of Capacity ReductionExercise 22: Use the Standard OverviewSummary

Lesson 3: Leveling Capacity in the Tabular Planning TableFigure 84: Capacity Leveling MethodsFigure 85: Mass ProcessingFigure 86: Tabular Capacity Planning TableFigure 87: Dispatching ProcedureFigure 88: Finite SchedulingFigure 89: Time ProfileFigure 90: Dispatching Variants (Tabular)Exercise 23: Use the Tabular Capacity Planning TableSummary

Lesson 4: Maintaining Available CapacityFigure 91: Work Center DataFigure 92: Available Capacity at a Work CenterFigure 93: Using Key Shift Sequences to Maintain Available CapacitySummary

Lesson 5: Leveling Capacity in the Graphical Planning TableFigure 94: Graphical Capacity Planning TableFigure 95: Capacity Leveling Overall ProfileFigure 96: Structure of a Profile (Leveling)You carry out the following steps when dispatching operations:Figure 97: Strategy profileFigure 98: Midpoint Scheduling Dispatched OperationFigure 99: Midpoint Scheduling Scheduling a Second OperationExercise 24: Apply Planning Strategies in the Graphical Planning TableSummary

Lesson 6: Evaluating Capacity Using Business IntelligenceFigure 100: Overview of Business IntelligenceFigure 101: 0PP_C13 Capacity Utilization Data FlowThe delivered queries come with the following master data (characteristics) for reporting:You can also take advantage of other fields, such as the following fields, for reporting purposes:Delivered queries can be distributed over the following time periods:Delivered queries present the following data:The Capacity Load Utilization InfoCube has several standard queries, such as the following queries:Figure 102: 0PP_13_Q001 Capacity Load Utilization (Distributed Requirements)Figure 103: 0PP_C13 Capacity Utilization QueryExercise 25: Use BI to Perform Capacity EvaluationSummary

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