KANBAN Process for External Procurement

KANBAN Process for External Procurement

What is KANBAN:

Kanban is a Japanese word with the meaning Signboard or Billboard and basically a card contain the details like the required material and its quantity and where the material is required. Normally during the production, if there exists a system of scheduling which takes care of immediate requirements of the Production  for the delivery as and when required say Just In Time rather when needed , would reduce the Lead Times and Inventory and provides a continuous flow for Production which does not stop the  lines of Production..

The process with this name KANBAN has been designed to take care of such requirements which will schedule the logistics chain as and when required for the Production Line. In this process the requirement for replenishment will be triggered by Production. This triggering will be in the form of a Signal (KANBAN SIGNAL ) in the place of kanban card manually which will consists of Required material and Quantity and the work area where it is required and will be sent directly to the work area ( Source vendor / Production area where its manufactured ) . Soon after the material is received the Goods Receipt can be posted automatically through the signal at the source of Demand.

KANBAN a Simplified Version:

Worthy points for KANBAN

The components which have to be consumed should be constant for a period of time which should be the longer than the replenishment lead time of the component.

The supply source should be capable of producing large quantities in small lots with in a period.

Few key words to be noted worthy.

Control Cycle: A control Cycle defines the relationship ouibetween the demand source such as a production line and the supply source such as an External Source.

Work area: Is an area at which the demand for the material exists and at which this material is utilized for the production of another component

JIT CALL: Is a Just In time call is a signal which will be generated in the system and which will contain the details like the material, required quantity, Delivery date, and the material Required Plant and the supply area which will receive the material and supply to the demand area of production, to whom the details to be send which is the vendor based upon the scheduling agreement.

Scheduling Agreement: Scheduling Agreement is an Agreement with the vendor for a supply of the required material for a JIT CALL quantity with the schedule of delivery.

Kanban Quantity: It is the quantity allotted for a KANBAN upon which needed to get filled with when emptied.

KANBAN Procedures:

There exist different procedures available for KANBAN based upon the control of Production and Operational structures.

Classic KANBAN: This procedure will be used to replenish the material for the number of Kanbans that circulates between the supply source and the demand source and the quantity per kanban.In this type of kanban the number of kanbans are fixed as per the control cycle and the quantity in the control cycle and also the signal will get triggered for the quantity per kanban defined in the control cycle.

Event Driven KANBAN: In the Event Driven kanban, the material is not made available continuously at a production supply area, but is procured when the material is requested. This does not depend upon the number of kanbans in the control cycle or the quantity in the kanban of the control cycle.

One Card KANBAN: With this approach, replenishment is always triggered when the kanban from which material is currently being withdrawn is approximately half empty. The new kanban then arrives before the current kanban has been completely emptied. This is very much useful when the material is not needed from time to time.

KANBAN with Quantity Signal: In the Classic KANBAN, the signal will be made to Empty when the operator makes it to empty when the KANBAN quantity reaches to ZERO and will not be knowing the current level of quantity prior becoming to zero. In contrast to Classic variety , in this model the operates c n enter the quantity and system can make the signal to Empty when emptied automatically as soon the kanban quantity is reached .

With the above basic introduction on the kanban and its processes, the below paragraphs will describe how a KANBAN can be dealt for external procurement.

               KANBAN CLASSIC PROCESS FOR EXTERNAL PROCUREMENT:

Step 1: Maintain Supply Area

Transaction Code: PK05

Upon Enter and with new entries:

Step 2: Create Control Cycle:

Transaction Code: PKMC

Upon you press enter along with the material entries with the plant and supply area; system will lead to a screen where in you need to maintain the number of kanbans, kanban quantity and the external procurement details.

In the External Procurement field we need to select one JIT CALL required  and soon after selecting the prifile , system will ask for a Schedule Line Aggrement with the item number of the material .

In the Flow Control Field provide the JIT CALL Profile and provide a print control detail in the tab.

Pre Requisites for Control Cycle:

1. Schedule Agreement at ME31L with a Schedule line
2. Message Output design at NACE for the JIT CALL signal Print /mail /fax etc.
3. Configuration for JIT CALL profile, JITCALL calculation profile details etc.

STEP 3: Kanban Signal Generation

Transaction code: PK21 (Manual Entry): In the KANBAN control process, signal generation place an important role. Though there exists many ways of doing the same, this write up concentrates on the Manual signal generation.

In the above screen provide the control cycle number and kanban number earlier created and press enter. System will populate the control cycle details.

Upon Press save system move the status from WAIT to EMPTY to generate a JITCALL to the vendor.

With proper settings for the output and a condition record for the output type system will send a mail or a Print to send to vendor or Fax etc.

STEP 4:  Out Put the JIT CALL

Transaction code: PJNA

The Jit call generated in the above step will be send to the vendor using the transaction code PJNA with the Output type entry and upon execute, system will lead to the send screen.

Based upon the Transmission mode and its form and configuration settings at NACE, we can either FAX/EMAIL/PRINT the JIT CALL.

Step 5: Making the Goods Receipt upon the Receipt of the Material:

Transaction Code: PJWE

Through this transaction we can automatically receipt the received materials into the supply area.

And upon enter the screen system will lead to

And upon provision of the received quantity and saving the screen system will post the GR.

Conclusion:

This is how the external procurement for KANBAN will work for the Classic KANBAN