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Author's profile photo Mrinal Kanti Roy

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.

My present blog is to describe 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 no 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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      Author's profile photo Caio Castro
      Caio Castro

      Hi Mrinal Kanti Roy ,

      How are you?

      I am trying to reproduce this scenario using a IM Storage Location as destination and using event driven kanban.

      After MF60 the warehouse task is created but when I confirm it in EWM there is a message saying that another task was created (similar to ADGI) but then a inbox error is triggered and the process fails.

      I have activated synchronous movement posting in EWM already but still the same error remains.

      Are you aware about any additional config that would be required to make it work when the destination supply area is IM Storage Location?


      Author's profile photo Gunnar Humpert
      Gunnar Humpert

      Hi Mrinal Kanti Roy,

      first I thought it was great, because the Kanban stock transfer strategy 0008 is similar to the Kanban stock transfer strategy 0006. However, there is a limitation, which from my point of view is a show stopper.

      In my company, we are using Kanban quiet a lot, and many sites are running 1-card Kanban, where the Kanban signal is triggered at a trigger quantity. Example: in your control cycle, you have defined a container quantity of 100 pieces, and the trigger quantity has been set to 30. You set a Kanban to EMPTY, and this triggers the creation of 1 warehouse task for 100 pieces. However, you don't have a bin with 100 pieces. In this example, you only have 20 pieces in multiple bins, so you would need 5 warehouse task for picking. THIS IS NOT SUPPORTED BY THE STOCK TRANSFER STRATEGY 0008!. You have a requirement for 100 pieces, but EWM can only create 1 warehouse task for 1 bin, so the warehouse would deliver 20 and not 100 pieces to the production. Since this quantity is already below the trigger quantity, then the next Kanban signal will not be triggered, and your production will run out of components.

      I see a similar issue for Classic Kanban. The Kanban cards work as a buffer, but if the delivered quantity is only e.g. 50% of the requested quantity, then it might happen that your buffer is not big enough, and you will run out of components. You could compensate for it by creating more Kanbans, but then you might have a space issue, when the warehouse is able to pick the full, requested quantity.

      This was reported to SAP as an error, but we were told that it works as designed....We were told that the bin quantity should be the same like in the container quantity in the control cycle. This is not the case in the real world. We have e.g. heavy components, so you can't just pick the requested qty. In this case, the whole pallet is moved into the production. After the completion of the production order, the remaining quantity is returned to the warehouse. There are many other reasons, why you don't have fixed quantities for materials in your warehouse...

      Best regards,