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    Kanban Way in Oracle Applications

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    Amine Gallah
    This document provides an overview of inventory management using the Kanban system within Oracle Applications. It describes how Kanban is a pull-based just-in-time inventory replenishment method that aims to reduce inventory levels and associated costs by only replenishing materials as they are needed. Key aspects of implementing Kanban in Oracle like defining item attributes, pull sequences, replenishment sources and statuses, and the replenishment flow are summarized.

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    Kanban Way in Oracle Applications

    Uploaded by

    Amine Gallah
    297 views12 pages
    This document provides an overview of inventory management using the Kanban system within Oracle Applications. It describes how Kanban is a pull-based just-in-time inventory replenishment method that aims to reduce inventory levels and associated costs by only replenishing materials as they are needed. Key aspects of implementing Kanban in Oracle like defining item attributes, pull sequences, replenishment sources and statuses, and the replenishment flow are summarized.

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    This document provides an overview of inventory management using the Kanban system within Oracle Applications. It describes how Kanban is a pull-based just-in-time inventory replenishment method that aims to reduce inventory levels and associated costs by only replenishing materials as they are needed. Key aspects of implementing Kanban in Oracle like defining item attributes, pull sequences, replenishment sources and statuses, and the replenishment flow are summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    297 views12 pages

    Kanban Way in Oracle Applications

    Uploaded by

    Amine Gallah
    This document provides an overview of inventory management using the Kanban system within Oracle Applications. It describes how Kanban is a pull-based just-in-time inventory replenishment method that aims to reduce inventory levels and associated costs by only replenishing materials as they are needed. Key aspects of implementing Kanban in Oracle like defining item attributes, pull sequences, replenishment sources and statuses, and the replenishment flow are summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 12

    Oracle Applications

    Inventory Management the Kanban way

    Inventory hides problems

    Whats on mind ?
    Reduce inventory levels to increase inventory turns Inventory Costs = Raw Material + Raw material in-process + Work-inProcess + Finished goods Inventory turns = Annual Requirements / Current Inventory level When we define standard cost for items, we also define the material overheads. Hence, when we work on reducing the inventory level; the material overheads also need to be seen going down To reduce inventory levels, concepts of EOQ, MRP, JIT, Supply Chain Planning and Constraint based Planning were applied. Each method has its own set of advantages. However, except JIT to some extent a common disadvantage is found among rest, which is a communication gap between the planning (supplying) team and production (consuming) team. On the other hand, communication is in-built in the Kanban philosophy

    What is Kanban ?
    When the inventory is moved only when needed, it is referred as pull system Kanban is an Just-in-Time inventory replenishment method that was conceptualized in Japan. Kanban is a Japanese word that suggests visual sign or signal Pull based on actual usage and not forecast Can be used in both manufacturing and non-manufacturing organizations Best suited for items with frequent usage, short lead-times and willing supplying sources If a Kanban is too small, you might run out of material before it is replenished. If its too big, you carry excess inventory

    Kanban in a typical Manufacturing flow

    Work cell

    Kanba n

    Finished goods

    Customer order

    Shi p Raw Material Supplier Kanba n Kanba n Purchased Parts Supplier Kanba n Subassembly Final assembly Kanba n Kanba n

    Item setup for Kanban


    Items are marked as Kanban controlled using the item attribute Release time fence as below

    Pull sequence
    For every Kanban planned item, a pull sequence must be defined which is a series of Kanban locations that model the replenishment network. Kanban location can be a subinventory or locator

    Kanban sources types in Oracle


    Intra-Org Triggers a subinventory transfer to source material from a different subinventory within the same inventory organization Inter-Org Triggers an internal requisition to source material across inventory organizations Production Triggers a discrete job in a release status so that the material is produced Supplier Triggers a purchase requisition to source material from supplier

    Kanban Planning
    If you would enter Kanban size and number of cards, then select Do not calculate Kanban size User needs to be specify the number of cards and Planning process calculates the size Number of cards User specifies the size and planning calculates the number of Kanbans

    Check if Kanban is for planning only Quantity of units in each Kanban

    Number of Kanbans to be included in the items cycle

    System will hold Kanban cards in wait status until the minimum order quantity has been met by aggregation of cards

    * Algorithms used in Kanban planning to be discussed in a separate document

    Replenishment Flow
    New card is added based on need Empty card sends a replenishment signal to the source Wait status until minimum order quantity is reached Inprocess status indicates that a job, PO or move order is created Full status indicates that Kanban is received

    New

    Empty

    Wait

    Inproc ess

    Full

    Quick notes
    When items are needed, Kanban cards change their supply status to Empty Kanban replenishment request is generated automatically If the item is internally or supplier sourced, then requisition is created and inserted into the interface tables. Requisition Import creates the Purchase Requisition or Internal Requisition in approved status based on whether the item is internally sourced or supplier sourced If the item is supplier sourced, Purchasing creates a Blanket Release (if a blanket PO exists) or a standard PO. Kanban card status is changed to Inprocess Using the standard receipts form, the items are received for the blanket release/standard PO/ Internal Requisition (if internally sourced) and the Kanban card status is changed to Full

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    About the Author


    SAM has been working on ERP solutions such as Oracle Applications & Microsoft Dynamics in Implementation & support for past 13 years. Worked with clients in various industry verticals such as manufacturing, distribution, education, construction, professional services, hospitality and aviation across geographies

    If you would like to join our panel of authors to share your knowledge on areas of your expertise, please do write to us on applearn@gmail.com

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