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New Kanban replenishment strategy in embedded Extended warehouse management of S/4HANA 1909 release to improve production and warehouse efficiency

SAP has introduced several new features and enhancements with Extended warehouse management (EWM) in S/4HANA 1909 Release. SAP’s Joerg Michaelis (Product Owner of EWM) has described very well on business benefits on the enhanced integrations with manufacturing / production in his blog as in below link.

https://blogs.sap.com/2019/10/09/sap-extended-warehouse-management-1909-development-updates-part-2-enhanced-integration/

My present blog is to describe to new Kanban replenishment strategy introduced in S/4HANA 1909 release and highlight the differences in process flows, transactions (documents) and the required configurations. I will also write blogs on other ‘Enhanced integrations’ like ‘ Synchronous goods receipt posting’ , ‘Synchronous backflush posting’ for repetitive manufacturing etc as described in above link.

Toyota (Japan) introduced ‘KANBAN’ for  ’Just-in-time’ manufacturing for their production. KANBAN is now a generic word to procure or produce or replenish a material only when it is required. Below image (copied from SAP Document LO225) depicts the process very well.  Components are kept in ‘Production supply area’ for their consumption in production. When the container (containing the components) are emptied , replenishment is triggered from the Supply source (In-house production , procurement or stock transfer).

Process flow for KANBAN in embedded EWM prior to 1909 release is described below for ‘single step ‘ stock transfer in which both source and destination storage locations are managed with EWM. When the container (or the Kanban board) is set to ‘Empty’, an outbound delivery is triggered in S/4HANA which creates a ‘Posting change’ document in embedded EWM. A warehouse task is subsequently created to move the goods from source location to destination production supply area (or Demand source) and the task is confirmed when the container (or KANBAN) is replenished to ‘Full’.

The above process has been simplified with fewer process steps in 1909 release as depicted in below image. Compare the two process flow diagrams and notice that Outbound delivery and Posting change documents have been eliminated. Warehouse task can be confirmed by setting the ‘KANBAN’ as ‘Full’ when the container (or KANBAN) has been replenished.

Refer the below images to correlate the process steps (1), (2), (3), (4) and (5) in above image with (1), (2), (3), (4) and (5) with SAP transaction steps with relevant documents in below image. Note that there is preceding documents for the warehouse task for stock removal from source bin to destination bin.Warehouse task is created directly when the KANBAN’ is set to ‘Empty’.

The required configuration for the new  Replenishment strategy 0008 is to be assigned with the corresponding plant at SAP IMG->Production->KANBAN->Replenishment strategies->Define stock transfer strategies and set at the relevant control cycle as shown in below image.

Elimination of the redundant process steps with its simplifications are supposed to efficiency in both production and warehouse operations.Note that this simplified KANBAN process is only for embedded EWM i.e not for Decentralized EWM.

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