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

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 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
Manufacturing
Supplier

Supplier Lead Time Process Lead Time

8 Weeks Strategic 2 Weeks
Buffer Customer Expectation
3 Weeks

• Part shortages are reduced and/or eliminated (reducing expediting)

• Total inventory is reduced through better mix (right sizing)

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 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
2. Stabilize 3. Reduce
inventory control
process inventory
(Kanban sizing)

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Effectiveness, then efficiency
Kanban

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 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

Additional Data
Push Pull
Required

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 CoV Example
Weeks Demand
A B C
• Parts A and B
1 25 30 0 meet the rule of
2
3
25
25
40
40
0
0
thumb COV<=1
4 25 30 0 • Part C has same
5 25 30 0
6 25 70 150 average
7 25 0 0 demand, but
8 25 0 0
9 25 0 0
high variability
10 25 0 0
11 25 60 0
12 25 0 150
Mean (Average) 25 25 25
Standard Deviation
0.0 25.0 58.4
(Variation)
CoV 0.0 1.0 2.3

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CoV alone does not always
indicate a good candidate for
pull

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 The Run Ratio
Weeks Demand

1 25
A B
30 0
C
• The Proportion of Time a
2
3
25
25
40
40
0
0
Part is Used or Sold
4 25 30 0 – A: 12/12=100%
5 25 30 0
6 25 70 150 – B: 7/12=58%
7 25 0 0
– C: 2/12=17%
8 25 0 0
9 25 0 0
10 25 0 0
11 25 60 0
12 25 0 150
Mean (Average) 25 25 25
Standard
Deviation 0.0 25.0 58.4
(Variation)
CoV 0.0 1.0 2.3
Run Ratio 100% 58% 17%
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Frequency of Demand
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

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 Calculator Transactions
ZMMR is the first transaction that is
ZMMR run. This transaction gives us the
Usage data for the materials.
ZMEV is the second transaction that
is run. This transaction gives us the
ZMEV
master data for the materials.
ZPIRN is the third transaction that is
run. This transaction gives us the
ZPIRN Supplier for the materials.

MC.1 and MC.1 is the fourth transaction that is

MCBZ 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
PK18 run. This gives us the current Bin
sizes for any materials currently on
Kanban
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Calculator Demo

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 Kanban
Kanban

Internal External
Works with Production Orders
Works with purchased parts,
for internally procured material
auto-generating PO’s,
between workcenters at a plant.
and vendor replenishment.

Regular Consignment
Inventory Inventory

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 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

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 SAP eKanban External Procurement

• Step 1: Create Supply Area PK05

• Step 2: Alter Material Master MM02
• Step 3: Enter Materials into PK01
• Step 4: Managing the eKanban board

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 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

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 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
controller
20 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

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 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

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 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.

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 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

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 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

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 EP Step 3: Enter Materials PK01

Enter transaction PK01 to

create Kanban control
cycle

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 EP Step 3: Enter Materials PK01

Enter Material Number

Enter Plant Number
Enter Supply Area

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 EP Step 3: Enter Materials PK01

Enter Number of Kanbans

Enter Kanban Quantity

Enter “001” to issue PO’s

and press “Enter”

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 EP Step 3: Enter Materials PK01

Enter Purchasing Org

Enter Vendor #
Leave Agreement field
blank unless using
Scheduling Agreement,
29 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

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 EP Step 4: Managing the eKanban board

Enter transaction to
view kanban Bin status
and to process Kanban
order.

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 EP Step 4: Managing the eKanban board

Enter Plant Number and

Supply Area

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 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
both
33 bins and click the “To Empty” button. Multiple Bins can be emptied at the

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.

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 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
36 qty. Once complete, select the “Status/qty” button.
 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

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 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

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 Kanban RF Process
1. When a Kanban Bin is Empty, 2. Flip the Status Card to “On
Scan the Barcode Card for the Empty Order”
Bin

BIN 1 BIN 2
BIN EMPTY

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 SAP RF Menu
Using the RF Tablet, Select 6  3  1

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 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).

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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
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Settings
Fixed Order Quantity
• 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 Forward Looking: includes

demand spikes

Operator triggers orders System-driven (MRP) orders

Provides good visual control BOMs MUST be accurate

Shop Floor Ownership Purchasing Ownership

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Questions

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