SOLUTIONS

Microsoft Dynamics AX
®

Lean ordering: Cumulative
User Guide

Date: August 2009 http://www.microsoft.com/dynamics/ax

Table of Contents
Introduction ................................................................................................ 3
Assumptions ........................................................................................................................ 3 Purpose of the Lean ordering (Cumulative) feature ................................................................... 3 Process overview .................................................................................................................. 5 Prerequisites ........................................................................................................................ 5

Functionality description ............................................................................. 5
Overview ............................................................................................................................. 5 Lean order setup .................................................................................................................. 6 Overview tab ..................................................................................................................... 7 Setup tab ......................................................................................................................... 8 Operational parameters ..................................................................................................... 10 Book to order tab.............................................................................................................. 10 Info tab ........................................................................................................................... 11 Structure setup ...................................................................................................................11 Family groups .................................................................................................................. 11 Items within a family group ............................................................................................... 12 How items get onto the schedule ...........................................................................................12 Lean sales orders .............................................................................................................. 12 Capacity slotting and splitting............................................................................................. 13 Input through sales schedules ............................................................................................ 14 Scheduling and execution .....................................................................................................14

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Introduction
This white paper describes the principles of the Lean ordering feature and introduces the initial configuration methods of managing the process. The Lean ordering Cumulative feature is designed for operations where a close link between the sales order and the assembly cell (which may be the only cell that is required to produce the item) is required. The quantities for all orders (from all customers) are accumulated for the day and presented as one line. Sales orders that are entered are loaded immediately on the final assembly cell and presented to the cell supervisor in a scheduled form. Sales orders can either be entered without any feedback about the cell capability to supply or with a schedule feedback based on drumbeat capacity. The process can be broken down into the following stages:

 Sales order entry.  Production schedule operation – the produce and spider phase. From the point that production is recorded (and booked into a warehouse), Microsoft Dynamics AX processing, such as pick and dispatch, is applied.

Assumptions
It is assumed that the user has knowledge and experience in the following areas in Microsoft Dynamics AX:      Lean kanbans Accounts receivable Production Inventory management Accounts payable

Purpose of the Lean ordering (Cumulative) feature
Orders that are loaded through the Lean Sales process will appear in the lean cumulative schedule forms. This is actually the production schedule for the cell. This enables the manufacture of the product after ensuring that material is available. When the product is produced (completed), it is removed from the production view. The following diagram illustrates the process:

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As the sales orders are loaded, the item is checked to see if it is under the control of Lean. If so, the family group association is used to determine which schedule (and by implication, which cell) controls the product’s manufacture. The sales order line is loaded on the schedule on the delivery date minus any transit time that is associated with this customer/dispatch point. The spider (the person who is responsible for determining what jobs can start) is provided with tools to determine inventory positions. When product has been produced, it is received into the warehouse that is associated with the item from where it can be picked by using Microsoft. Dynamics AX distribution processes.

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Process overview

Prerequisites
Apart from the requirement to have items registered within lean ordering, the only prerequisite is that the warehouse on the item corresponds with the warehouse that the final assembly schedule will book production into.

Functionality description
Overview
The key elements of the feature are: Lean ordering setup – This is where the structure of product groupings (families) and the associated items are established together with the various parameters that are required by Lean ordering and the resulting schedule.

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Lean sales order entry – Sales orders as entered will be automatically scheduled on the final assembly cell. Depending on the parameter setup, there may be interaction with the entry process. Lean schedules by date/item – The schedules can be viewed and managed in date/item sequence if the final assembly schedule is not producing directly to order. The products are produced and placed/taken to a warehouse where they are to be picked and shipped/dispatched from. The pick/pack process is standard Microsoft Dynamics AX and has no relationship to lean. Lean schedules by date/order/item – Where the final assembly cell is producing directly to the sales order, the schedule is presented and managed in this way. When using the method, the order moves from production into shipping and then to dispatch. This is not discussed here because build to order and cumulative scheduling are alternatives to each other.

Lean order setup
Parameters for the setup of Lean ordering are as follows:

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Overview tab

Lean order schedule – This is the schedule identity number that is used to pull together all of the entries on the schedule. Work cell – This is the work cell identity for the final assembly area. When the schedule is linked to a product family (and therefore all the items within the family), this is the cell that will undertake the final assembly process. Value stream – Used by Lean Accounting to associate a schedule with a value stream. The value stream is a Microsoft Dynamics AX finance dimension. For additional information, see the Lean Accounting user guide.

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Setup tab

The Setup tab incorporates a large number of fields that are used only by Book-to-order schedules. The following fields are those that are used by cumulative schedules. Sales order (Status) – This is not used in Lean ordering Cumulative. Lean order method – This parameter is only used for cumulative schedules (and is set to None for Book to order). It controls how lean ordering interacts with scheduling the final assembly schedule. Depending upon this parameter setting, the system may attempt to find production capacity for a new order line automatically, provide the user with the option to find a production slot manually or inhibit checking (ignoring capacity constraints) at the point of order entry. If checking is inhibited at order entry, production leveling can be performed later by use of the Heijunka process. If a production slot is selected at order entry, Heijunka is not used. The values and outcomes are defined below    None – The schedule is assumed to be flexible, and the rate of output can increase or decrease, for example, bringing workers to the cell. Heijunka scheduling will be permitted. Always slot – When sales orders are entered, they will automatically find a slot for the whole order. Always Split – When sales orders are entered, they will be split (backward and forward) in time consuming the drumbeat of the cell. o o o o Period start day – This is the start day of the week for the periods over which the schedule will be viewed. Schedule period – Determines whether the schedule will contain periods (buckets) of one day or one week duration. Schedule duration – Determines whether the schedule will be displayed in weeks or months. Schedule duration length – Determines the schedule display period in terms of the schedule duration.

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Example – Selecting the Schedule period as Day, Schedule duration as Weeks and a Schedule duration length of 1 will result in the schedule that comprises daily buckets, grouped in weeks, with one week visible at a time. Man-hours – This is not used by cumulative schedules. Drumbeat per day – This is used by BTO schedules and is not used by cumulatives. Calendar - This is the calendar that will be used to present the schedule, that is, the working days. By default, the schedule starts on a Monday, but this can be changed by setting the Period start day parameter. Shift start – Shift end – Times of the shift. Use on hold ATP processing – A standard Microsoft Dynamics AX explosion will be performed, and provide a date compared with the current date plus the lead time for the item. If the ATP date is beyond the cell’s response time (as entered in the ATP check period field on the Info tab) and this parameter is set, then the ATP order on hold processing will be invoked. Check ATP – The standard ATP check will be performed. Warehouse – The warehouse to be included in calculations if Heijunka leveling is to be used. Using no warehouse will ignore any stock from the process. Level production by quantity – Heijunka leveling by production quantity will seek to provide a leveled schedule that does not exceed the stated weekly capacity of the cell by seeking to increase production ahead of any spike in demand and, if required, use inventory (Heijunka inventory) to prime the process. Heijunka scheduling will operate unless the order entry process has identified a slot for production of the order line being entered. Example Assume orders are routinely received for around 500 per week, but with a significant variation by day: Monday Tuesday Wednesday Thursday Friday Total 50 50 200 50 100 450

To level production, the user may decide to hold a small buffer near shipping or just at the cell to respond to variation in the early part of the period, say 100. (The buffer is held within the Heijunka warehouse.) The leveling would produce: Monday Tuesday Wednesday Thursday Friday Total 100 100 100 75 75 450

The process identifies the first peak in demand and seeks to fill production beforehand to meet the peak. If available or appropriate, Heijunka inventory is used to reduce the quantity to be made. The schedule will seek to replenish the Heijunka inventory at the end of the schedule period.

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After the first peak has been satisfied, the process will seek to level the second and then subsequent peaks. Reservation – This field will override the default settings for item reservation held in the Inventory Management parameters. If inventory is reserved, the quantity that is reserved will be excluded from the production schedule. The options are:    Automatic – no user choice – If inventory is available, it will be reserved automatically. Automatic – user choice – The user can choose to reserve inventory if it is available. No automatic reservation – Inventory will never be reserved.

Operational parameters
The following operational parameters apply to cumulatives. Use lean warehousing – While the warehouse can be controlled by Lean warehousing and the Lean warehousing dispatch forms used, it is assumed that standard Microsoft Dynamics AX will manage the dispatch process. Setting this parameter populates the Warehouse field in the sales order line based on Lean warehousing logic. Use sales order BOM – The ability to read the BOM that is associated with the sales order is standard functionality in Lean manufacturing. When selected, this parameter will cause the BOM on the sales order to be used in the pull/assembly structure process.

Book to order tab

Book to sales order – This check box will determine whether items on the schedule are pegged directly to the originating sales order or allowed to be mixed within the schedule. Do not select this check box when the Lean schedule is cumulative. BOM version – If a specific BOM code is always used by the schedule and shared by members of a product family, it can be selected here. It will be overridden by the Sales line BOM parameter on the Setup tab.
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Route version – If a specific route code is always used by the schedule and shared by members of a product family, it can be selected here. Print job cards – When releasing a schedule, this check box can be selected to initiate the printing of job documentation. Automatically print job cards – This is not used by cumulative schedules. Use alerts – This is not used by cumulative schedules. Two-level replenishment – This is not used by cumulative schedules. Kit separate to release – This is not used by cumulative schedules. Print job receipts – This is not used by cumulative schedules.

Info tab
This tab is not used by cumulative schedules.

Structure setup
Family groups and the items within the family groups are loaded against a cell. It is assumed that only one type of product will be loaded on a final assembly cell. The structure to establish this is defined as follows:

Family groups

Lean manufacturing > Setup > Lean ordering > Lean ordering > Family grouping The family group is defined and linked to the schedule that will be loaded on the final assembly cell. It is possible to limit families to a proportion of the drumbeat capacity. Family group – Use a code to define the group. Description – A brief title for the group. Lean order schedule – This field created the link between the family group and the schedule. Maximum quantity – Where more than one family is associated with a schedule, a maximum quantity, related to the capacity that is recorded against the Drumbeat per day field on the Setup tab for the schedule, can be entered. It is important to ensure that the sum of these maximum values does not exceed the overall capacity per day.

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Items within a family group

Lean manufacturing > Setup > Lean ordering > Lean ordering > Item grouping The parts within the family are then defined: Family group – The code that is used to define the group. Group member item – The item code for the family group members. BOM – If a specific bill of materials is to be used, it can be defined here. Route number – If a specific routing is to be used, it can be defined here. Ratio – This is not used by cumulative schedules. Mandatory – This is not used by cumulative schedules. Sales schedule – Used to link the item to both the cumulative schedule and, where applicable, a sales schedule.

How items get onto the schedule
A line on a lean order schedule (cumulative) is the collection of either a number of sales order lines (from Lean sales order entry) or from sales schedules where the post to lean orders parameters have been set. The basic objective is to get to a line that represents the quantity that must be produced that day for the sales orders that must be dispatched. The setup information for item groups defines items within family groups and is used to determine which items are loaded on which schedule.

Lean sales orders
Sales orders are entered into Microsoft Dynamics AX through the Sales order form.

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Capacity slotting and splitting
If insufficient capacity is available for the delivery date, the parameter Lean order method will determine how the order will be managed. If the parameter is set to None, the user will be warned that there is insufficient capacity, but the order will continue to be loaded for the day selected. If the parameter is set to Always slot, the order will be loaded as one quantity onto the first available day that it can be accommodated.

If the parameter is set to Always split, the available capacity will be consumed across available slots until the requirement has been satisfied.

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Input through sales schedules
If the Post to lean scheduling and Load lean schedules by call-off check boxes are selected, then the releases (within schedule analysis) or call-offs will load the schedule automatically. In this case, no allowance for splitting/slotting is provided on the control schedule, and this parameter (Lean order method) should be set to None. The lean schedule can be loaded through the use of call-off or through the actual schedule itself. We recommend that when call offs are used, then these should be loaded on the lean schedule. Note: When loading the LOS from a sales schedule, the schedule must be entered on the item grouping information. Otherwise, the LOS schedule will not be loaded.

Scheduling and execution
The following forms define how the schedule is presented to the final assembly cell.

The preceding form displays the main schedule information.
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This represents the sales orders that have been loaded through methods described in the preceding sections. The question of how the cell goes about the actual production must now be decided. After product has been produced, it is recorded by clicking the Receive button, which opens the Update lean order schedule form.

Clicking OK in the preceding form undertakes all of the necessary action to book the production into the default warehouse for the item. If serial or batch numbers are required for the product to be produced, then these should be generated by accessing the main table for the order and undertaking the required action. This is standard for Microsoft Dynamics AX.

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Leveling can be employed as discussed in the preceding section on the Lean order schedules form, Setup tab. The procedure is as follows: Click the Level button to show a level quantity in the Leveled quantity column. Preleveling

Post leveling

The results of the leveled can be viewed at this stage because they have not yet been confirmed. When you click the Confirm button, the following form is displayed.

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While the sales orders remain dated as they were entered, the system keeps track of which order is scheduled on which day to achieve the level amounts. This may mean that a sales order has been split (for the purpose of producing the leveled quantities) in a number of smaller lots. An example is displayed in the following form.

Leveling completes the process for Lean ordering where cumulatives are used. The inventory will be present in the warehouse and normal sales order dispatch processes can be undertaken.

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