Kanban – For SD


In my previous posts we have seen on the Kanban for the Inhouse, External procurement, interestingly we do have kanbans for the Customers also.
In the Current manufacturing world the kanban is involved in the full production to sales of a Product.
There are many articles / Case studies / White papers that flows when you google for this topic.


The manufacture produces the material and supplies to the customer in a Kanban container.
This kanban containers is in cyclic movement between the Customer and the Supplier.
Large automobile giants currently are working on this kanban with lot of automation’s.
The manufacture can use REM / Discrete Production method as per the business requirement.
I have taken the example of REM environment.
In this post i will guide you to set up this scenario.
Master Data Requirement:
1. Material Master, BOM, Routing,Workcenter,Production version – All this for the REM setup.
2. The material master should support sales functions
3. Customer Material Information.
4. Kanban Control cycle.
Configuration Pre Requisites:
1. OM11- Inhouse replenishment strategy
* Control Type – as 2-Processing with Planned orders and Cost collector.
* In this Kanban With SD needs to be selected with 1-Delivery what status Full and GI when status is in use.
2. SD- Scheduling Agreement Document type
* You can use BL, check the MRP for Dlv Schedule type to the correct one.
I have worked with A.
Process Flow:
1. Set up the Master data for the FG so that it is ready for reporting Production.
2. Now Create a Scheduling agreement for the FG material.
3. Here in the Forecast delivery Schedule you can maintain few values ( 1000 ea) for next 3 months.
4. The assumption is the Customer gives us a Forecast delivery schedule well ahead of time and periodically sends us the JIT delivery schedule.
5. Once you have set up the scheduling agreement create the control cycle for FG, in this you have to maintain the SD scheduling agreement in the In house replenishment strategy.
6. Once your Control cycle and SD scheduling agreement is ready , the kanban cycle can get started.
7. Now whenever we receive the JIT delivery schedule we wil update the quantity in the JIT delivery schedule of the SD Sched. Agreement.
8. Now let us say the Empty kanban container is received from the customer then during the receipt of this empty container the status of the container will be changed as EMPTY,
* This status change will trigger a Planned order created for the Fg.
9. As the planned order is triggered now the Manufacturing department will be producing the product and filling the container.
* Once the container is Full now the Status will be changed form EMPTY TO FULL.
* This Status change will trigger a DELIVERY to be created for the Scheduling Agreement.
* At the same time a GOODS RECEIPT /ISSUES will be posted for the PLANNED ORDER.
* STOCK Of the FG will be increasd.
10. Now as the container is full now it is ready to be transferred to the customer, so when the container is physically sent to customer place then the status of the container will be changed from FULL TO IN USE.
* This status change will do a PGI for the DELIVERY.
* The stock of FG will be reduced.
11. After this the Billing and other business process can be started.
12. This above process cycle will help you to configure the basic cycle of Kanban for the SD cycle,
13. The below Diagram is for reference.

Kindly Post your querries/ Feedback.

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