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Material Replenishment with Kanban – External Procurement

The Kanban method for controlling production and material flow is based on the actual stock quantity in production. Material that is required on a regular basis is continually provided in small quantities into production. With Kanban, instead of being pushed through production by higher-level planning, materials are called from the supply source by production at the manufacturing level where they are needed (pull principle). Replenishment or production of a material is only triggered when a higher production level requires the material. This replenishment is triggered directly in production using previously maintained master data.

Kanban replenishment is commonly used in – but not restricted to – repetitive manufacturing environments, when a production process requires that the same or similar products are produced over a certain period at a certain rate per period. The products produced always follow the same sequence through the machines and work centers in production. Routings tend to be simple and do not vary much.

Key Process Steps Covered

  • Create and maintain Kanban control cycles
  • Maintain output control for Kanban summarized JIT call
  • Create independent planning and material requirements at plant level
  • Replenish Kanban container with Kanban just-in-time calls and event-driven Kanban

Benefits

  • Reduce work in progress
  • Increase supply chain visibility
  • Reduce manufacturing supply chain costs
  • Reduce inventory and assets
  • Improve flexibility and visibility of manufacturing and supply chain processes


Where is Material Replenishment with Kanban – External Procurement(1E3) being used?

This Scope item is used in the following way:

  • As a core function of Production Operations within Manufacturing Scope Item Group

Process flow of Material Replenishment with Kanban – External Procurement (1E3)

Find below the process flow of the scope item Material Replenishment with Kanban – External Procurement as it is defined for release S4H-OP-2009.

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Ref: Manufacturing of S4H-OP-2009


Best Practices related to S/4HANA

*1) Yearly Updates are released per September of each year
*2) The Quarterly updates are released per Februari, May, August and November
Details of future releases can be found in the SAP Roadmap section of each product. Go to SAP Roadmap Product Finder.


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