## Understanding Kanban Management

This chapter discusses:

- Kanban Management and kanbans.

- Kanban Management terms and concepts.

- Kanban Management tables.

### Kanban Management and Kanbans

JD Edwards EnterpriseOne Kanban Management enables you to streamline the day-to-day functions of the shop floor and associated departments. Kanbans are execution tools that you use when the production and inventory control systems are based on a pull system, rather than a push system.

Kanbans represent predetermined quantities of components at specified locations on the production line. They are designed to minimize work-in-process inventories.

Kanbans are visual cues that authorize the replenishment of inventory at a specified consuming location in a pull environment. When kanban inventory is consumed, a replenishment action is triggered when the holding bin is emptied.

A kanban can include, but is not limited to, bins used to physically transport material from work center to work center on the production floor. Kanbans can also represent pallets of raw material.

You can replenish inventory by manufacturing activity, procurement, or simply the movement of the required goods. The size attribute of a kanban determines the replenishment quantity. The size of the kanban affects the effectiveness of the kanban system significantly; when the kanban size is too high, the system contains more inventory than necessary, which is unacceptable. When the kanban size is too low, the system eventually runs out of inventory.

Kanbans support just-in-time manufacturing, but are not used exclusively with repetitive or lean manufacturing. You can also use them effectively in a discrete manufacturing environment.

Kanbans enable you to pull material from five sources:

- Work center

  When a work center kanban is checked out, the system finds an open work order or rate schedule. When no work order or rate schedule exists, the system creates a work order or rate schedule to fulfill the kanban demand. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master.

- Inventory

  When an inventory kanban is checked out and checked in at its consuming location, the system creates an inventory transfer to move the material from its supplying location to the consuming location. For example, you can move required materials from raw materials inventory to a work center location on the shop floor.

- Supplier

  When you check out a supplier kanban, the system creates a purchase order or initiates a blanket purchase order release, depending on how you set up the system. Additionally, depending upon setup criteria, you can also enable the check in of the kanban to perform the purchase order receipt for goods received. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master.

- Branch/plant

  When you check out this kanban, the system creates a sales order and purchase order for the kanban item. When the last card is checked in, the system receives the purchase order that was created at check out. This kanban type is particularly useful for companies that prefer to utilize the formal sales and procurement transactions (transfer orders) between facilities instead of managing inventory replenishment using inventory transfers.

- Outside assembly

  When you check out an outside assembly kanban, the system creates a sales order for a list of components that is required to make a product. When you check in the kanban, the system creates a purchase order for the finished product. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master. This kanban is particularly useful for companies that use outsourcing to provide additional value to their products and want a more robust record of inventory balances. Special setup is required to use this kanban type.

Kanbans provide automated background transactions that eliminate much of the required paperwork and data entry.

### Kanban Management Terms and Concepts

This section discusses terms that apply to JD Edwards EnterpriseOne Kanban Management:

Kanban | Method of just-in-time production that uses standard containers or lot sizes. It is a pull system in which work center or locations signal that they need to withdraw parts from feeding work centers, inventory locations, or suppliers. This signal alerts manufacturing to build, suppliers to furnish, or other branch/plants to provide the required part in the standard lot size that is defined in the Kanban Master table (F3016).
Kanban card | Can be represented by a card, bin, or shelf location. Kanban cards can be system-generated.
Kanban ID | Unique identifier for a kanban master record, which can represent one or more physical containers. The Kanban ID is generated from next numbering.
Pull system | Manufacturing environment in which material is pulled through the system by actual system requirements, usually by the use of kanbans.
Push system | Manufacturing environment in which parts are pushed through the system, generally by the use of work orders that the materials planning systems generate.
Ad hoc kanban card | A kanban card that is inserted into a single cycle to cover an abnormal spike in demand.
Calculation method | A business function and defined set of parameters that determines kanban size, the number of kanban cards, and the quantity per card.
Supplying location | The location (defined at the item-branch level) that supplies the kanban item to the consuming location. Kanban processing sends completions of work orders and receipts of purchase orders to this location.
Consuming location | The location (defined at the item branch level) that uses the kanban item. Kanban processing moves replenishment materials from the supplying location to the consuming location.
Source | The type of process that supplies the kanban item, such as a work order or a purchase order.
Phase | A condition that enables you to state that the completion and transfer to the consuming location will be completed at the same time or that another step is involved prior to the transfer.
Check out | A condition that indicates that, when the kanban quantity is depleted at the consuming location, a replenishment action might be required. The actual replenishment transaction, such as the creation of a work order, does not take place until the last card has been checked out.
Check in | A condition that indicates that, when the replenishment action has been completed, the kanban item is available for use by the consuming location.
Kanban flag | An option, called Kanban Item, that indicates that an item is a kanban-controlled item. This option appears on the Additional System Information form of the Item Master (P4101) or the Item Branch program (P41026) program. The system updates these tables for kanban-controlled items: Item Master SRM Tag File (F4101SRM) Item Branch SRM Tag File (F4102SRM) The Kanban Item option is used by the JD Edwards EnterpriseOne Requirements Planning system to indicate that generated action messages cannot be processed.

### Kanban Management Tables

These tables are used throughout JD Edwards EnterpriseOne Kanban Management:

Table | Description
Bill of Material Master (F3002) | Stores information at the branch/plant level about bills of materials, such as quantities of components, features, options, and levels of detail for each bill.
Routing Master (F3003) | Stores information about routing instructions, including operation sequences; work centers; and run, setup, and machine time. The system uses this information to calculate labor, machine, and overhead costs.
Job Shop Manufacturing Constants (F3009) | Stores general branch/plant information, such as bill of material and routing instruction validation, commitment control, work hours per day, and cost calculation methods.
Kanban Master (F3016) | Stores the set of kanban cards that are associated with an item. Each kanban defines the supplying location, consuming location, quantity, and unit of measure. The system uses next numbers to control the kanban identification number. If the system obtains the item from an external source, the supplier's address book number is included.
Kanban Master Tag (F3016T) | Stores information about the calculation method that is used by the kanban and the related kanban in the case of tiered kanbans.
Kanban Size Calculation Definition (F3017) | Stores information that relates to the calculation method, such as calculation identifier, business function, and whether a parameter is kanban-specific, calculation-specific, or not used.
Kanban Size Calculation Parameters (F3018) | Stores the specific value of kanban-specific and calculation-specific parameters.
Kanban Replenishment Capacity (F3019) | Stores kanban capacity and demand over a user- specified period of time.
Kanban Card Detail (F30161) | Stores information that relates to the kanban, such as status, transaction quantity, and date updated.
Line/Item Relationship Master (F3109) | Stores the relationships between items and production lines. The default production line for an item is the line on which production is scheduled at rate schedule creation for that item.
Work Order Parts List (F3111) | Stores the components that are required by a work order.
Work Order Routing (F3112) | Stores the routing steps that are attached to a work order or rate schedule. It contains one record for each operation sequence number and work center.
Item Master (F4101) | Stores basic information about each defined inventory item, such as item number, description, category codes, and units of measure.
Item Branch (F4102) | Stores the warehouse or plant-level information for an item, such as costs, quantities, category codes, and physical locations.
Item Location (F41021) | Stores all inventory locations for an item.

Note. JD Edwards EnterpriseOne Kanban Management has no table conversions.