Example of 'Finite capacity' on Resources in AX 2012

In this post the we will look at behavior of 'Finite capacity' check box on 'Resources' form. We will create two new resources one with finite capacity and another without it. We will then assign these resources to the route operations one for each resource, and assign run time to them. We will create production orders and schedule them to see the effect on the resources' capacity reservations.

1. Create two new resources.

1. Resource: #0001, Finite capacity: Unchecked

2. Resource: #0002, Finite capacity: Checked

2. Create a route with two operations assigning run time of 8 hours and 4 hours respectively.

3. Assign first resource to first operation and second resource to the second operation in the resource requirements section.

4. Assign the route to a production item.

5. Now create two production orders, run 'Estimate' and then run 'Schedule jobs' for each of them. Make sure it is run on same date (E.g. today's date)

6. For both resources click 'Capacity load' button.

For first resource having finite capacity unchecked note that the scheduling engine has reserved the 8 hours run time  for both the production orders (operation 10) on the same date and hence overbooked the 8 hour capacity of one day which is defined in the standard calendar assigned to the resources.

For the second resource having finite capacity checked note that the scheduling engine hasn't overbooked the capacity, rather it has reserved the next available 8 hours (next day in this case) because of the finite capacity.

Capable to Promise (CTP) in AX 2012

Capable-to-promise (CTP) logic generally applies to make-to-order items, and automatically results in the assignment of a delivery date to a sales order line item. CTP logic considers components’ on-hand inventories and their lead times to suggest a promised delivery date. For example, when no component inventory exists, the promised delivery date reflects the item’s cumulative manufacturing lead time.

The CTP logic is conceptually similar to the explosion logic for a sales line. The Explosion logic must be manually invoked for a line item, and involves several steps to correctly calculate and update the promised delivery date on a sales line.

In this post we will look what is behind the CTP calculation and how it shows the calculated date on sales order at the time of order entry. We will use a production item having route and BOM associated with it.

Prerequisites and Setup:

First of all the Master planning should be enabled in AX.

A dynamic master plan must be setup.

A coverage group with must be setup with future messages enabled and should be assigned to item or master planning parameters.

The dynamics master plan must be selected in the master planning parameters.

Create new item with 'BOM' production type.

Select 'Production' in 'Default order type' on 'Default order settings' form.

Select 'CTP' in 'Delivery date control' on 'Sales order' tab of 'Default order settings' form.

Make sure the 'Sales lead time' is 0 days.

Create new resource and assign Standard (8 hour) calendar to it.

Create new route for the item.

Add one operation having 48 hours 'Run time'.

Select the newly created resource in the resource requirement for the operation, and check only 'Operation scheduling'.

Approve and activate the route.

Create new BOM for the item.

Add one item in the BOM lines.

Approve and activate the BOM.

CTP Calculation:

Create new sales order and select the newly created item (#Item-CTP) in the line.

Press 'Ctrl+S', this will open the 'Available ship and receipt dates' form

Note that the system provides a message that the requested ship date 8/13/2013 (today's date)cannot be promised and asks to select one of the alternative dates listed. System shows warning signs on 6 days. This is due to the 48 hours of process time for the operation set on the route for this item and since standard (8 hour working day) calendar was set on the resource associated with the operation, this makes 6 working days.

Select any date after the warning days and click 'Update confirmed ship date' button. This will populate the confirmed dates on the sales order line.

The 'Available ship and receipt dates' form can also be opened from line details.

Example of 'Dimension-based configuration' item in AX 2012

We'll take a look on one of the configuration technologies; 'Dimension-based configuration' which can be selected while creating products in Dynamics AX 2012.

Dimension-based configuration:

Dimension-based configuration is used when it is not necessary to define all combinations of item dimensions. Items  can be configured (e.g. on Sales order) using the configuration rules and configuration routes which are set up on the BOM. Flexibility is provided to the user to select a configuration based on the BOM items selection. To use this configuration technology, it is necessary that 'Configuration' dimension is enabled for the item.

The benefit of using Dimension-based configuration includes the possibility of avoiding multiple BOM creations for one item. Rather than that only one BOM can be created and configuration rules can be defined to select or deselect particular items in the BOM, and based on this selection a configuration can be created for the item.

To demonstrate this example we will proceed in the following sequence:

1. Create products (item and its components)

2. Create bill of materials

3. Configure item

4. Use the item in Sales order and verify the correct components selection

    1. Create products:

We are going to create one main item and its four component items which will be used in the BOM. We will create them in the Released products form at Product information and management > Common > Released products.

Main Item:

Following are the important fields to be considered

• Product type = Item
• Product subtype = Product master
• Item number = FG_ITEM
• Product dimension group = Con-Dim (Configuration enabled group)
• Configuration technology = Dimension-based configuration

Component items:

The component items can be simple products without configurations. Create four component items 'ITEM_1', 'ITEM_2', 'ITEM_3' and 'ITEM_4' considering the following fields.

• Product type = Item
• Product subtype = Product

• Item number = ITEM_1

    2. Create Bill of materials:

We are going to create a bill of material for the 'FG_ITEM'. We want either 'ITEM_1' & 'ITEM_3' OR 'ITEM_2' & 'ITEM_4' to be selected as components for 'FG_ITEM'. For this purpose we will define configuration route and configuration rules for component selection.

1. Open 'Bill of materials' form from Inventory and warehouse management > Common > Bill of materials

2. Create new BOM for 'BOM for FG_ITEM'

3. Add  'ITEM_1', 'ITEM_2' assigning  'Group_1' as Configuration group, and 'ITEM_3' and 'ITEM_4' assigning  'Group_2' as Configuration group in BOM lines.

4. Click 'Configuration route' tab and add 'Group_1' and 'Group_2'.

5. Select 'Group_1' and click 'Configuration rules'

6. In the 'Configuration rules' define the following:

7. Add 'FG_ITEM' in the BOM version then approve and activate the BOM.

    3. Configure item:

We will now configure the item from the Release products form. Item can also be configured on the  order at run time.

1. Open the 'Released products' list page from Product information and management > Common > Released products and select 'FG_ITEM'

2. On the 'Engineer' tab click 'Maintain configurations' button.

3. Click 'Configure' button on the 'Maintain configurations' form.

4. On the 'Configure item' form, select 'ITEM_1' for 'Group_1'. Note that 'ITEM_3' will be auto selected for 'Group_2'. This is due to the rules defined on the BOM.

5. 'Configuration creation' form will be opened on which we will provide the new configuration for the combination of selected components. Enter 'Con-1' in the 'Configuration' field.

6. Click 'OK' and new configuration will be created. Similarly create 'Con-2' for the combination of 'ITEM_2' & 'ITEM_4'.

7. These configuration will now appear in the 'Product dimensions' and 'Released product variants' forms, and are ready to be used.

    4. Use and verify item on Sales order:

We will now create a sales order for 'FG_ITEM' and verify that correct combination of components is selected for its configuration.

1. Create new sales order at Sales and marketing > Common > Sales orders > All sales orders

2. On sales order lines select 'FG_ITEM' and open the 'Configuration' lookup. This will open the 'Configure item' form.

3. Select 'Con-1'.

4. Now to verify the component selection, click 'Product and supply > Composed of - tree' on sales order line.

Note that only 'ITEM_1' & 'ITEM_3' appear in the BOM designer which concludes our demonstration.

Lean Manufacturing in AX 2012 - An Overview

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.