Lesson Overview
In this lesson, an automatism is available with the kanban calculation for
dimensioning the number of kanban containers of a control cycle or their contents.
Lesson Objectives
After completing this lesson, you will be able to:
• Calculate the number of kanbans and the quantity per kanban on the basis of the requirements situation
Business Example
You discover that the requirements situations of some of your kanban materials are subject to significant variations. Kanban calculation enables you to achieve your goal of retaining the minimum amount of stock while still ensuring production supply.
Figure 69: Kanban Calculation
Usage: To guarantee low stocks of material with sufficient security of supply, the number of kanbans and the quantity per kanban must be chosen carefully. As the inventory situation in many branches of industry fluctuates considerably, it is necessary to check and adjust these parameters on a regular basis.
SCM350 Lesson: Calculating the Kanban Statistics
Features: If you use the automatic kanban calculation, the system can create proposals for the number of kanbans and the quantity for each kanban. The proposals are created on the basis of the dependent requirements, that can come either from MRP or from long-term planning.
Activities: Kanban calculation can be triggered for each control cycle (Kanban calculation button in the control cycle). In addition, you can use the transactions Create proposal/Check proposal for a mass calculation for several control cycles.
The kanban calculation process can be divided into the following steps:
• Long-term planning/MRP: Implementation of MRP or long-term planning for creating planned orders and dependent requirements
• Transaction Create Proposal: Determine dependent requirements per control cycle Smoothing dependent requirements per control cycle Conversion of the dependent requirements to the time unit of the replenishment time Calculation of the number of kanbans /quantity per kanban Saving the change proposal
• Transaction Check proposal: Display the change proposal Additional evaluations (optional) Change the control cycle
If the number of kanbans is to be reduced, the corresponding kanbans are locked according to the lock logic (in Customizing for KANBAN under Kanban calculation).
Figure 70: Dependent Requirements as a Basis for Kanban Calculation
The automatic kanban calculation is created on the basis of dependent requirements. There are three different cases:
• Above the kanban material for whose control cycle you are carrying out the kanban calculation, replenishment takes place via MRP. In this case there are dependent requirements for the kanban material, which come from planned independent requirements or sales orders of the finished product. In this case you can carry out the kanban calculation on the basis of dependent requirements from MRP.
• Above the kanban material for whose control cycle you are carrying out the kanban calculation, replenishment also takes place via KANBAN (with replenishment strategy 'KANBAN without MRP'). Since MRP terminates with kanban materials, there are, in this case, no dependent requirements for the kanban material, which come from planned independent requirements or sales orders of the finished product. Therefore, you must plan the finished product with long-term planning. Long-term planning is simulative requirements planning. You can use it to create simulative dependent requirements and simulative planned orders for the complete BOM also for KANBAN materials. These simulative dependent requirements and planned orders are not visible in operative planning, they simply exist in a simulative long-term planning scenario. In this case you can carry out the kanban calculation on the basis of simulative dependent requirements of a long-term planning scenario.
• If you perform MRP in APO, the dependent requirements are taken into account in the kanban calculation.
• You can also use long-term planning if replenishment takes place via MRP above the kanban material. This is used if you want to carry out the kanban calculation on the basis of a simulation planning. For more information on long-term planning, see the ECC online help.
SCM350 Lesson: Calculating the Kanban Statistics
Figure 71: Smoothing Dependent Requirements for Kanban Calculation The automatic kanban calculation is created on the basis of the dependent requirements, that can come either from MRP or from long-term planning.
The dependent requirements dates are scheduled in MRP/long-term planning at the order start date based on the assumption that all components have to be at the beginning of the order. That is, the components and their requirements date are on a specific day, although the requirements source is produced over a period (often several days).
In KANBAN, you can usually take for granted that not all components have to be provided at the same time for the start date of the order. Therefore, it may be necessary to smooth the dependent requirements before calculating the control cycles.
For smoothing the dependent requirements your can choose between two smoothing types (definition in Customizing for KABNAN and assignment in the control cycle):
1/3/4.: Dependent requirements are evenly distributed over the week/the month/the quarter. Therefore, it is not necessary to perform kanban calculation every day but for each relevant period. This type of smoothing is particularly useful if you plan using longer time intervals. 2.: Dependent requirements are distributed between the dependent requirements date (corresponds to the start date of the requirements source) and the latest dependent requirements date (corresponds to the end date of the requirements source) using a distribution key.
This process is more performance intensive than the weekly distribution. In this procedure, the system finds the distribution key either from the BOM item of
the individual dependent requirements or if it has been defined centrally for the kanban calculation in Customizing for Kanban (calculation profile) and assigned to the control cycle. Here, equal distribution usually makes most sense.
Figure 72: Supply Area Determination Procedure
Usage: In the BOM explosion, the system's first priority is to post the components from the issue storage location, which is maintained in the BOM item of
the component (field Production storage location). If no storage location is maintained in the BOM item, the MRP group of the assembly determines whether the issue storage location from the material master of the component or from the production version of the assembly is to be used (strategy for production storage
SCM350 Lesson: Calculating the Kanban Statistics
location selection). This strategy is defined for each MRP group in Customizing for Repetitive Manufacturing in the work step Define Storage Location and Supply Area Determination in BOM Explosion.
• Storage location selection = 1: The system adopts the production storage location in the components' material master as the issue storage location.
This procedure is used if there is a specific storage location for each component in the plant.
• Storage location selection = 2: The system uses the proposed issue storage location in the production version (of the finished assembly or product) as the issue storage location for all components. If the proposal withdrawal location has been maintained in the production version, the system uses the assembly's receiving storage location as the withdrawal storage location for all components. You can define the receiving storage location in the production version of the assembly in field GI proposed stor. loc. or in the material master record of the assembly in field Issue stor.location. If neither of these entries has been maintained, you can enter the receiving storage location in the backflush transaction in Repetitive Manufacturing which is then used as the withdrawal storage location for the components. You should use indicator 2 when all components lie together in one storage location close to the production line where they are required.
• Storage location selection = 3: Initially as for indicator 1. If the system finds no storage location here, it proceeds as described under indicator 2.
• Storage location selection = 4: As indicator 3 but with reversed sequence.
• If an MRP group has not been maintained for the assembly/finished product, the entry in the field Production storage location from the material master of the component is read as the issue storage location for all components.
Figure 73: Formula for the Automatic Kanban Calculation
Calculation type “No. of kanbans”: If the material of the first kanban has been consumed, then the remaining material quantity [(number of kanbans - 1) x quantity per kanban] has to be sufficient to cover the material requirement, until the material has been replenished for this kanban. Therefore this remaining material quantity must equal the consumption in the replenishment lead time of a kanban [AC x RT].
In addition, fluctuations in the replenishment lead time and in the consumption must be considered in the Safety factor. The safety factor is specified in the control cycle (default value 1).
Depending on how KANBAN is used in production, you set the constant in the following way:
• If a kanban is reported EMPTY when the kanban is completely empty, the constant is set to '1'.
• If the kanban is set to EMPTY when the first part is withdrawn, then the constant is 0. The constant is specified in the control cycle (default value 1).
If the number of kanbans is constant (2, for example), then the quantity per kanban can also be calculated (calculation type “quantity per kanban”).
To calculate control cycles you need to know about material requirements at control cycle level.
SCM350 Lesson: Calculating the Kanban Statistics
Figure 74: Automatic kanban calculation
If you use the automatic kanban calculation, the system can create proposals for the number of kanbans and the quantity for each kanban. Note: The system always rounds up to the whole container quantities, so that it is a good idea to make a plausibility check using this graphic.
As in the analysis period a different number of kanbans can be necessary every day, the system saves the following three values:
• The next change, which is required for data
• The maximal number of kanbans, which is required in the analysis period, as well as
• The minimum number of kanbans, which is required in the analysis period As it is not always of use to simply copy these values “blindly”, you can display the requirements run in a graphic.
Prerequisites for the automatic kanban calculation:
You must maintain the default values for the automatic kanban calculation in the control cycle.
• If necessary, you must maintain the authorization profiles in Customizing for KANBAN (if the dependent requirements are to be smoothed or if you want to maintain work time).
• You must assign the supply areas to the BOM items (either via the production version or by entering the supply area in the material master) as the system only includes dependent requirements that refer to a supply area.
• If necessary, you must maintain the detailed dependent requirements selection in the control cycle.
Figure 75: Example: Quantity per Kanban / Number of Kanbans The quantity per kanban is the lot size, in which the material is replenished (produced, transported).
The example above shows how the system calculates the number of kanbans in the replenishment lead time for a specified rate of consumption using different quantities per kanban. In the first example, a maximum stock level of 200 pieces is calculated (2 kanbans each containing 100 pieces). The transport or setup effort is minimal. In the second example, a maximum stock level of 110 pieces is calculated (11 kanbans each containing 10 pieces). The transport or setup effort is higher, however.
Smaller quantities per kanban reduce the average stock in circulation but increase setup, transport, and monitoring effort. If the replenishment lead time per kanban is shorter when using smaller lots, the number of kanbans can be reduced further.
Larger quantities per kanban increase the average stock in circulation but decrease setup, transport, and monitoring effort.
SCM350 Lesson: Calculating the Kanban Statistics
Exercise 10: Kanban Calculation
Exercise Objectives
After completing this exercise, you will be able to:
• Calculate the number and quantity per kanban on the basis of the requirements situation
• Adjust the number of kanbans and quantity per kanban to an irregular requirements situation
Business Example
The PC component T-T7## (BIOS) is staged with KANBAN on production line T-L3##.
To guarantee low stocks of material you want to check and adjust the number of kanbans and the quantity per kanban of a regular basis.
Task 1:
Now carry out the kanban calculation in the control cycle for PC component T-T7## (BIOS).
1. Menu path:
Logistics → Production → KANBAN → Control Cycle → Control Cycle Maintenance
Call the transaction in change mode Material: T-T7##
Plant: 1200
Supply Area: T-P3##
Maintain the parameters for kanban calculation (see tab page):
Calculation type: 1 (Calculation of the number of kanbans)
Calcul. profile: 1000
Choose Enter.
Choose "Display Graphic" to perform the kanban calculation on the basis of the dependent requirements for the component T-T7##.
Continued on next page
Evaluation from: Next Monday
Evaluation to: Today + 6 weeks
Choose Enter and the system graphically displays the number of required kanbans.
To which number of kanbans should the control cycle be corrected in a few weeks?
____________________________________________________________
However, do not change the number of kanbans yet.
Save the control cycle, which now contains parameters for the kanban calculation (calculation type, calculation profile).
Task 2:
Optional exercise (if sufficient time)
Change the planned independent requirements for assembly T-B10##
(Motherboard) to observe the effect of kanban calculation for component T-T7##
(BIOS):
1. Menu path:
Logistics → Production → Production Planning → Demand Management
→ Planned Independent Requirements → Change Material: T-B10## (not T-T7##!!!)
Plant: 1200
Choose Enter.
In the next screen, choose the Sched. Lines tab page.
Change the planned independent requirements as follows: Choose Enter to confirm any warning messages:
D Requirement date Planned Quantity W This week + 1 week 100 pieces (no change) W This week + 2 weeks 130 pieces (no change) W This week + 3 weeks 130 pieces (no change)
SCM350 Lesson: Calculating the Kanban Statistics
W This week + 4 weeks 205 pieces W This week + 5 weeks 190 pieces W This week + 6 weeks 195 pieces
Save the planned independent requirements. Choose Enter to confirm any warning messages.
Task 3:
Now, carry out the planning run for the PC assembly T-B10## (motherboard).
1. The planning run creates a new dependent requirements situation for the KANBAN component T-T7##.
Menu path:
Logistics → Production → MRP → Planning → Multilevel Single-Item Planning
Material: T-B10## (not T-T7##!!!)
Plant: 1200
Choose Enter twice.
Task 4:
Carry out the kanban calculation again for PC component T-T7## (BIOS). This time use the mass kanban calculation in the KANBAN menu:
1. Menu path:
Logistics → Production → KANBAN → Control Cycle → Kanban Calculation → Create Proposal
Plant: 1200
Date from: Next Monday
To: Today + 6 weeks
Material: T-T7##
Choose Execute and confirm the following dialog box with Enter.
2. Return to the kanban menu and choose
Control Cycle → Kanban Calculation → Check Proposal
Continued on next page
Plant: 1200 Material: T-T7##
Choose Enter. This brings you to the results of the kanban calculation.
On which date will the previous number of kanbans no longer be sufficient?
According to the calculation, how many kanbans are required in the control cycle at the next change?
______________________________________________________
As it does not always make sense to “blindly” accept these values, you can display the requirements run in a graphic. Decide in the graphic whether the proposed number of kanbans is acceptable for the next change.
To do this, choose Graphic.
Evaluation from: Next Monday Evaluation to: Today + 6 weeks Choose Enter.
After checking the graphic, how many kanbans are required in the control cycle at the next change?
______________________________________________________
Enter this number of kanbans in the table, in the field New kanban number.
When you choose Save, the system automatically changes the control cycle.
To avoid changing the control cycle too early, choose Control Cycle → Kanban Calculation → Check Proposal to enter time limits for change requirements.
SCM350 Lesson: Calculating the Kanban Statistics
Solution 10: Kanban Calculation
Task 1:
Now carry out the kanban calculation in the control cycle for PC component T-T7## (BIOS).
1. Menu path:
Logistics → Production → KANBAN → Control Cycle → Control Cycle Maintenance
Call the transaction in change mode Material: T-T7##
Plant: 1200
Supply Area: T-P3##
Maintain the parameters for kanban calculation (see tab page):
Calculation type: 1 (Calculation of the number of kanbans)
Calcul. profile: 1000
Choose Enter.
Choose "Display Graphic" to perform the kanban calculation on the basis of the dependent requirements for the component T-T7##.
Evaluation from: Next Monday
Evaluation to: Today + 6 weeks
Choose Enter and the system graphically displays the number of required kanbans.
To which number of kanbans should the control cycle be corrected in a few weeks?
____________________________________________________________
However, do not change the number of kanbans yet.
Save the control cycle, which now contains parameters for the kanban calculation (calculation type, calculation profile).
a) The number of kanbans should be increased to 6 kanbans in a few weeks time.
Continued on next page
Task 2:
Optional exercise (if sufficient time)
Change the planned independent requirements for assembly T-B10##
(Motherboard) to observe the effect of kanban calculation for component T-T7##
(BIOS):
1. Menu path:
Logistics → Production → Production Planning → Demand Management
→ Planned Independent Requirements → Change Material: T-B10## (not T-T7##!!!)
Plant: 1200
Choose Enter.
In the next screen, choose the Sched. Lines tab page.
Change the planned independent requirements as follows: Choose Enter to confirm any warning messages:
D Requirement date Planned Quantity W This week + 1 week 100 pieces (no change) W This week + 2 weeks 130 pieces (no change) W This week + 3 weeks 130 pieces (no change) W This week + 4 weeks 205 pieces
W This week + 5 weeks 190 pieces W This week + 6 weeks 195 pieces
Save the planned independent requirements. Choose Enter to confirm any warning messages.
a) (no solution required)
Task 3:
Now, carry out the planning run for the PC assembly T-B10## (motherboard).
1. The planning run creates a new dependent requirements situation for the KANBAN component T-T7##.
Menu path:
Logistics → Production → MRP → Planning → Multilevel Single-Item Planning
SCM350 Lesson: Calculating the Kanban Statistics
Carry out the kanban calculation again for PC component T-T7## (BIOS). This time use the mass kanban calculation in the KANBAN menu:
1. Menu path:
Logistics → Production → KANBAN → Control Cycle → Kanban Calculation → Create Proposal
Plant: 1200
Date from: Next Monday
To: Today + 6 weeks
Material: T-T7##
Choose Execute and confirm the following dialog box with Enter.
a) (no solution required)
2. Return to the kanban menu and choose
Control Cycle → Kanban Calculation → Check Proposal
Plant: 1200
Material: T-T7##
Choose Enter. This brings you to the results of the kanban calculation.
On which date will the previous number of kanbans no longer be sufficient?
According to the calculation, how many kanbans are required in the control cycle at the next change?
______________________________________________________
As it does not always make sense to “blindly” accept these values, you can display the requirements run in a graphic. Decide in the graphic whether the proposed number of kanbans is acceptable for the next change.
To do this, choose Graphic.
Evaluation from: Next Monday
Continued on next page
Evaluation to: Today + 6 weeks Choose Enter.
After checking the graphic, how many kanbans are required in the control cycle at the next change?
______________________________________________________
Enter this number of kanbans in the table, in the field New kanban number.
When you choose Save, the system automatically changes the control cycle.
To avoid changing the control cycle too early, choose Control Cycle → Kanban Calculation → Check Proposal to enter time limits for change requirements.
a) On which date will the previous number of kanbans no longer be sufficient? According to the calculation, how many kanbans are required in the control cycle at the next change?
You can see the date of the next necessary change to the control cycle in the field Date of next change of a kanban control cycle.
At the next change the control cycle should be corrected to 8 kanbans.
After checking the graphic, how many kanbans are required in the
After checking the graphic, how many kanbans are required in the