Advantages of Lean Manufacturing
Manufacturing industries need to strive
in market and fulfill customer demands in a consistent way. This requires them
to review their strategies from time to time and make continuous improvements
in the manufacturing processes. It is not easy to maintain efficient operations
in today’s manufacturing environment where everyone is looking for a
competitive edge.
The idea of Lean manufacturing is
to implement strategy for manufacturing and inventory management that reduce
costs, increase productivity and give advantage to the company to compete with others.
In other words reduce the operations and activities that are non-value adding
to the customer.
Organizations running lean
manufacturing implements special techniques to move materials through the
supply chain which results in significant reductions in production time and the
cost of the end product. Some of the techniques include waste elimination,
standardization, giving more visual control and continuous organization of the
work place.
Lean Manufacturing in AX 2012
Microsoft Dynamics AX 2012
provides lean manufacturing out of the box along with discrete and process
manufacturing processes. It provides an easier and more visual appealing
interface to the user to manage lean processes. In depth information of the
shop floor can be mapped into AX 2012 which results in accurate calculations.
The high level concepts which are
provided by AX 2012 to manage lean manufacturing process are as follows:
1. Value Stream:
It is the
process of producing and delivering goods to the market. In AX 2012 it is
represented by one or more production flows. It is used to create operating
units. An operating unit is an organization that represents a business process.
2. Production Flow Models:
A production flow model
defines the capacity settings that are used to schedule kanban jobs in a work
cell. The production flow model also defines how the kanban schedule for the
work cell is structured. It is assigned to the work cell.
3. Production Flows:
A production flow defines
the flow in which items are manufactured and controlled in the production
process. It is linked to the operating unit that plays the role of a value
stream. A production flow consists of activities either transfer or process which
are performed by work cells. The activities are linked with each other as
predecessor or successor to build the flow. Transfer activities are used to
move inventory and process activities contribute in the manufacturing of the
finished good and are value adding. Inventory picking and receiving is
controlled by setting up the activities correctly. A production flow must be
related to a production group in which WIP accounts are specified.
4. Work Cell:
Work cell is the
manufacturing unit where the process activities are performed. In AX 2012, a resource
group is used as a work cell where resources are grouped to execute a process
flow. The work cell defines the site, warehouse and location both input and
output. Work cell capacity is expressed in throughput. It also defines the effective
capability of all resources assigned to it. Calendars and production flow models
are also assigned to the work cell.
5. Kanban Rules:
Kanban rules
defines when kanbans are generated to signal demand and how kanbans are
fulfilled for a product (semi-finished or finished). Kanban rule is linked to production
flow through activities. Single activity or a series of activities can be
assigned to a kanban rule. The replenishment strategy determines how kanbans
are created:
- Fixed: To maintain a constant number of kanbans. When any kanban is emptied a new one is created. This is particularly used for make-to-stock scenarios.
- Scheduled: To generate kanbans based on master planning requirements.
- Event: To generate kanbans directly to fulfill a demand. This is particularly used for make-to-order scenarios, typically sales line, BOM line etc.
6. Kanbans:
Kanban is a pull
signal representing demand and triggers process and transfer activities for a
unit of specific product or product family. It can be seen as an order which is
processed to satisfy the demands for which it was created. Kanbans are managed from
kanban boards in AX 2012. There is a kanban scheduling board to plan un-planned
kanbans. There are separate kanban boards each for process and transfer jobs.
7. Work in Progress (WIP):
Material or
products that are picked from inventory for an activity of a production flow
are added to the WIP account of the production flow at its standard cost. This
requires the activity to be configured as 'Update on hand on pick = Yes'.
Products that are received from the production flow to inventory are deducted
from WIP at their standard cost. This requires that the activity be configured
as Update on hand on receipt = Yes. This behavior is similar to
the behavior of production orders, except that the production flow builds WIP
and variances for all products and materials consumed in or received from the
production flow, whereas a production order tracks WIP and cost for a single
product. It is mandatory that all items which need to be entered in WIP should
be maintained at standard cost in AX.
8. Backflush Costing:
Backflush
costing is a cost accumulation method where the application of cost is based on
the output of a process. It is run periodically to value the WIP and to produce
period end status. It is for all production flows of a legal entity by
specifying a period end date. No transactions can be made on date or before it
on which backflush calculation has been run.
