Understanding Kanban Size Calculations
The Kanban Size Calculation Definition program (P3017) defines a kanban size calculation, also called a calculation method. You can enter a kanban size manually, or you can define a calculation method to be used by the Kanban Size Calculation program (R30450).
The calculation method that determines kanban size, the number of kanban cards, and the quantity per card depends upon these attributes:
The methodologies that the inventory manager wants to adopt in reducing the work-in-process inventory levels (such as discrete versus rate-based, safety stock, multi-tier).
The physical dimensions of the product and the holding bin.
The demand profile of the product.
The lead time and shipment pattern of the product.
The cost of the product.
The goal of sizing an ideal kanban is to ensure that the system never runs out of inventory while the inventory level remains as low as possible.
Generally, you perform kanban calculations during periodic item planning cycles when the time periods are long. You should run the Kanban Size Calculation program after you run material requirements planning (MRP), which is generally once per month. When demand fluctuations are high, kanban calculations, particularly the number of kanban cards in process, should be calculated more frequently (for instance, on a weekly basis). You might also need to insert an ad hoc card to cover a short-term spike.
The Kanban Size Calculation Definition program enables you to use one of the default calculation methods that are provided by the system or to define a calculation method. A calculation identifier uniquely identifies each calculation method.
A calculation method consists of a description, business function, and defined set of parameters. The system provides four standard business functions. Each business function contains an equation that calculates the kanban size, and either the number of kanban cards or the quantity per card. The standard calculations that are provided by the system can be found in source module B3003960.
The system enables you to use custom programming to create custom equations, as well as the business functions that are required to implement the calculations. Some restrictions apply.
After you identify the business function for a specific calculation method, you must define which parameters to use. You can define 16 parameters; 13 are standard and three are custom. When you use a parameter in a calculation, you designate the parameter as either kanban-specific (specific to a kanban ID) or calculation-specific. The Kanban Parameter Usage UDC (30/KP) is hard-coded and designates how the system uses a parameter in the kanban size calculation:
0 - Parameter not used
1 - Kanban-specific parameter
2 - Calculation-specific parameter
If you want a kanban to use a specific calculation method, you must link that kanban master record to the calculation method using the Calculation Method field in Kanban Master Revisions program (P3016). It is recommended that you use the same calculation method to set up each kanban ID for the same kanban-controlled item, which eliminates any variance in kanban size.