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KANBAN is a process by which material can be replenished as per the requirement. KANBAN is a Japanese technology for material replenishment. KAN- means card and BAN means signal. Hence understanding is card which will give the signal for replenishment stock.

KANBAN will have plastic bins and cards. The card will hold the material no, storage location, Bar code, material qty etc and will be kept on the bin once the bin is full. Once the bin is empty, then the card will be on the board. Like that multiple card will be there for a single material with proper serial no.

KANBAN is having two master data.

1.    Control cycle

2.    Supply area

First of all supply area will be created with storage location and responsible person.

T code PK05. Put the plant and create new entry.

Put storage location and responsible person and save the data.

Go to MMSC

Exclude the storage location from planning(as this is not required to plan through MRP). We can exclude the storage location from customizing also. In this case all the material in the storage location will be excluded for planning.

Now the control cycle has to be created.

T code PK01

Put material, plant, supply area and select classic KANBAN.

Put no of KANBAN (means no of  bins), No of KANBAN quantity and maximum empty allowed.

Select production type also (inhouse/external).

This can be done through control cycle maintenance also. T code PKMC. To create new click on 

Now check MD04 screen

Total stock is 63 and is excluded from MRP. This stock will be consumed in subsequent stage(in next stage)

Now check the status of the KANBAN bin. T code PK13N

Here three bins are full and two bins are in Wait status. Click    to see the legends.

Two important status of KANBAN is.

If Bins are made full- GR will be done

If Bins are made empty-Procurement proposal will be created (NOT GI WILL BE DONE)

GI is being done through backflush.

In actual situation bins are being scanned through RF device and scanning is being done one the Bins are empty or Full.

But here we will do through this tab.

Let’s select one bin and make it empty by

One KANBAN processed and Bin became RED. This means Bin is empty.

Now check MD04. One Production order created (as empty means one proposal will be created).

Make another Bin empty is same process and see MD04 screen.

Release both the order. The order type of KANBAN is PP05.

Double click on the Bin and you can see the details with order created.

Check the stock in MMBE

Stock is 63. Now select one empty Bin in make it Full

The Bin became green.

Check the stock

Its become 70 unrestricted. Hence 7 nos GR is happened.

Repeat the process and check the qty .More 7 no GR happened

Check MD04. No proposal exist (for all orders GR happened).

Few more useful T codes

PK11: Plant overview.

PK18: For each material production order, DOC no on which the production order got posted can be seen. Status of KANBAN container will be displays also.

PK31: Error in KANBAN can be checked. Select any error line and click on Bell. You can change the error status.

PK09: KANBAN can be locked (when the KANBAN is not is used/Bin is damaged).

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  1. Aditya S

    Hello Krishnendu,

    Thanks for the document and i had given reward points for the same.


    1)Can you please confirm do we need to make any configuration settings for the automatic creation of Production Order(Procurement Proposal) when the bin is empty.

    2) Can we use KANBAN instead of MRP. Is KANBAN an alternative to MRP. Please clarify. If no, in which instances we use KANBAN instead of MRP. thanks.

    1. Krishnendu Das Post author

      Hi Aditya,




      1. Not required. I have not created. though I will check again.

      2. For KANBAN material, MRP is not required. But there is a definition of KANBAN material. KANBAN material will be handled through BINS. Hence one big finished product can’t be handled through KANBAN.






    2. Former Member

      Hi Aditya


      To my knowledge, Kanban or MRP is your decision of planning strategy. For a product or a component which is constantly required or consumed with a very stable demand, a planner doesn’t want to spend more energy on it. So a Kanban control cycle can save a lot of time for the planner because the shopfloor guys will control the supply. In some case, if a material has a low value but meanwhile it’s continuously required, the MRP controller maybe want to use Kanban also.



    1. Krishnendu Das Post author

      Hi Raj,


      If KANBAN is there, MRP is not required. Do you have any such scenario where you have to do both.


      Let me know. Then I can have a re look.


      Thanks .




      1. Former Member

        Thanks Krishnendu for your reply,


        I think some where in SCM 350 (KANBAN) book, I have read the Kanban process using MRP,

        Can you please have a look and let us make aware by preparing the business cycle as you produced right now.


        Thanks a lot.


        Best regards

        1. Srini Ravindra Kumar

          Raj, The MRP4 view setting on MRP exclusion/inclusion indicator decides what strategy is actually proposed in the control cycle. In this demo you can see that the material is excluded and hence it has proposed non-MRP strategy 0003 (others are 0001/0002). If the MRP4 setting for this material is changed to be included for MRP, the control cycle for same material will propose the I/H strategy as 0004/0005/0006 which are ones to work with MRP. Hope it clarifies your doubt.


  2. Former Member

    Hello Krishnendu Das


    Good Explanation ,   I have One question in Kanban scheduling agreement control cycle,

    When the kanban scheduling agreement  validity expired and target quantity are met , system allowed to  add new schedule lines in agreement without any warning and error ,when kanban is processed ” to empty” and Post GR when processed  “To FULL” however In kanban contract agreement  It gives  error while  validity is expired, Please suggest .

  3. Former Member

    Hi Krishnendu,

    Hope your are doing well

    I need your support that Kanban SAP implementation possibility for below ,

    1.we have agreement with the supplier to keep stock on his site based on min/max on his warehouse

    2.we have 3 sites in different countries and we are keeping aggregating stock at supplier site

    3. once the supplier load any partially Qty we should start production to fill his stock with max

    we are using SAP so if Kanban SAP process can cover above point or there is other process on SAP




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