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Pull and Kanban in SAP. Topics 3  What is Pull and when do I use it  Procurement Decision Tree  Kanban Calculator  SAP reports  Fields  eKanban/Reorder.

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Presentation on theme: "Pull and Kanban in SAP. Topics 3  What is Pull and when do I use it  Procurement Decision Tree  Kanban Calculator  SAP reports  Fields  eKanban/Reorder."— Presentation transcript:

1 Pull and Kanban in SAP

2

3 Topics 3  What is Pull and when do I use it  Procurement Decision Tree  Kanban Calculator  SAP reports  Fields  eKanban/Reorder Point Setup

4 Purchase Pull System Part shortages are reduced and/or eliminated (reducing expediting) Total inventory is reduced through better mix (right sizing) 4 Manufacturing Strategic Buffer Supplier Lead Time 8 Weeks Process Lead Time 2 Weeks Customer Expectation 3 Weeks Replenishment Signal (Purchase Order) Consumption Supplier 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.

5 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 5 Effectiveness, then efficiency Goal

6 Kanban 6

7 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 7 CoV>=1.5 Push Additional Data Required CoV<=1.0 Pull

8 CoV Example 8 Weeks Demand ABC Mean (Average) 25 Standard Deviation (Variation) CoV Parts A and B meet the rule of thumb COV<=1 Part C has same average demand, but high variability

9 9 CoV alone does not always indicate a good candidate for pull

10 The Run Ratio The Proportion of Time a Part is Used or Sold – A: 12/12=100% – B: 7/12=58% – C: 2/12=17% 10 Frequency of Demand Weeks Demand ABC Mean (Average) 25 Standard Deviation (Variation) CoV Run Ratio 100%58%17%

11 Kanban Calculator 11

12 12  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 Kanban Calculator

13 13 ZMMR is the first transaction that is run. This transaction gives us the Usage data for the materials. MC.1 and MCBZ ZMMR ZMEV ZPIRN 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 PK18 is the last transaction that is run. This gives us the current Bin sizes for any materials currently on Kanban Calculator Transactions

14 Calculator Demo 14

15 Kanban 15 Kanban Internal Works with Production Orders for internally procured material between workcenters at a plant. External Works with purchased parts, auto-generating PO’s, and vendor replenishment. Regular Inventory Consignment Inventory

16 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

17 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 17

18 Step 1: Create Supply Area PK05 18 First Transaction PK05 The supply area

19 Step 1: Create Supply Area PK05 19 Click New Entries to Setup Supply Area Information

20 Step 1: Create Supply Area PK05 20 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 code of the area

21 EP Step 2: Alter Material Master 21 Enter “MM02” to alter the Material Master. Enter the desired Part Number and Plant Number on the following screens

22 EP Step 2: Alter Material Master 22 Select “MRP1” tab You may want to create a special MRP controller for eKanban Items Change MRP Type to “ND”

23 EP Step 2: Alter Material Master 23 Enter desired backflush location that items will be received into. Select “MRP 2” tab Enter Lead Time vendor has committed to.

24 EP Step 2: Alter Material Master 24 In the “MRP 4” tab click “Organizational Levels” Key in the IM storage location you wish the items to drop into once received

25 EP Step 2: Alter Material Master 25 Change this Field to 1 (must be excluded from MRP) and save. This is also accessible through the transaction MMSC

26 EP Step 3: Enter Materials PK01 26 Enter transaction PK01 to create Kanban control cycle

27 EP Step 3: Enter Materials PK01 27 Enter Material Number Enter Plant Number Enter Supply Area

28 EP Step 3: Enter Materials PK01 28 Enter “001” to issue PO’s and press “Enter” Enter Number of Kanbans Enter Kanban Quantity

29 EP Step 3: Enter Materials PK01 29 Enter Purchasing Org Enter Vendor # Leave Agreement field blank unless using Scheduling Agreement, then fill in Agreement # and Line #

30 EP Step 3: Enter Materials PK01 30 Kanban Indicator must be marked “X” for Sch. Agreements at the Line Item level

31 EP Step 4: Managing the eKanban board 31 Enter transaction to view kanban Bin status and to process Kanban order.

32 EP Step 4: Managing the eKanban board 32 Enter Plant Number and Supply Area

33 EP Step 4: Managing the eKanban board 33 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 bins and click the “To Empty” button. Multiple Bins can be emptied at the same time.

34 EP Step 4: Managing the eKanban board 34 When a Kanban Bin is emptied the Bin icon will turn red. A Purchase order will automatically be released.

35 EP Step 4: Managing the eKanban board 35 To change a Bin status to anything other than empty or full, Right click on a Bin and select “Kanban correction.”

36 EP Step 6: Managing the eKanban board 36 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.

37 EP Step 6: Managing the eKanban board 37 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 Full once any partial/full Migo_GR has been posted against the PO.

38 EP Step 4: Managing the eKanban board 38 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. The time the Bin status was changed is displayed in EST.

39 39 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

40 SAP Kanban - Demand View 40 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

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

42 SAP RF Menu 42 Using the RF Tablet, Select 6  3  1

43 43 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).

44 Settings 44 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 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. Fixed Order Quantity Maximum Stock Level

45 Kanban vs. Reorder Point 45 Does not include future demand Operator triggers ordersProvides good visual controlShop Floor Ownership Forward Looking: includes spikes System-driven (MRP) ordersBOMs MUST be accuratePurchasing Ownership Kanban Reorder Point

46 46 Questions


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