Microsoft Dynamics AX 2009 Manufacturing – Old Lean Primer

Microsoft Dynamics AX 2009

Manufacturing – Old Lean Primer

 

Purpose: The purpose of this document is to illustrate lean manufacturing approach in Microsoft Dynamics AX 2009 on simplified example of discrete manufacturing of cars. This document will outline end-to-end functional flow for the scenario which includes setup (Section A), creation (Section B), estimation (Section C), scheduling (Section D), execution (Section E) and costing (Section F) aspects. Please review other documents in the series to compare traditional manufacturing approach to lean manufacturing approach in Microsoft Dynamics AX 2009/2012.

 

Challenge: Microsoft Dynamics AX 2012 out-of-the-box enables mixed mode manufacturing including traditional approach and lean approach. Lean manufacturing in Microsoft Dynamics AX 2012 has significantly evolved since Microsoft Dynamics AX 2009 release. The challenge is to understand how lean manufacturing in Microsoft Dynamics AX 2012 is different from lean manufacturing in Microsoft Dynamics AX 2009 and how lean manufacturing approach is different from traditional manufacturing approach in general. The idea is that the reader with understanding of traditional manufacturing will be able to apply and "translate" this knowledge in order to implement lean manufacturing scenarios in Microsoft Dynamics AX 2012.

 

Solution: The simple but at the same time descriptive real-world example of discrete manufacturing of cars provides context for better understanding of manufacturing processes and their implementation in Microsoft Dynamics AX. In particular we deal with 2 level bill of materials (assembly and sub-assembly) and straightforward sequential routes in order to implement Make to Stock scenario. Make to Stock scenario was implemented for the sake of simplicity, however we can also apply this knowledge to implement Make to Order scenario if needed.

 

Scenario

 

In this scenario Car will be manufactured using lean approach. Car components will be assembled together and then assembled car will be painted. But before this happens one of components will have to be manufactured on its own and this is Car frame which is welded from parts. One work cell will be responsible for Car assembly and another work cell will be responsible for Car frame welding

 

Bill of materials	Route

 

One of the requirements defined in this scenario is that all products are Standard cost controlled

Section A: Setup

 

Let's review the setup which is required to implement this scenario

 

Number of items will be created in Microsoft Dynamics AX 2012 which will have similar characteristics for the sake of simplicity. All of them will be Standard cost controlled, Site and Warehouse will be used as Storage inventory dimensions, Default Site and Warehouse settings will be defined on item level and finally cost price will also be defined for all items (not using BOM calculation for BOMs)

 

One of the requirements defined in this scenario is that all items are Standard cost controlled and in order to satisfy this requirement Multisite functionality will have to be activated in Microsoft Dynamics AX 2009.

 

Multisite activation

 

 

Sites "1" and "2" were created in advance

 

 

Multisite activation screen shows that multisite functionality is not currently activated 

 

 

In order to activate multisite functionality Multisite Activation Wizard can be used

 

*Welcome

 

 

*Step 2: Select default site/warehouse

 

 

Infolog

 

To overcome the following message within Site "1" I created Warehouse "11" which never existed before

 

 

*Step 3: Select activation method

 

 

*Step 4: Analyze multisite configuration

 

 

*Step 4: Analyze multisite configuration

 

 

*Activate multisite

 

 

Infolog

 

 

Now Multisite activation screen shows that multisite functionality has been activated

 

 

Car (AlexCar) will be assembled from Car frame (AlexFrame), Engine and Transmission

 

Item: AlexCar

 

 

Please note that Item type = BOM for Car (AlexCar) item

 

Cost price for Car (AlexCar) is 2500$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Item: Engine

 

 

Cost price for Engine is 1000$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and

 

 

Item: Transmission

 

 

Cost price for Transmission is 500$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Item: AlexFrame

 

 

Please note that Item type = BOM for Car frame (AlexFrame) item

 

Cost price for Car frame (AlexFrame) is 250$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Item: Floor

 

 

Cost price for Floor is 150$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Item: Side

 

 

Cost price for Side is 50$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Item: Roof

 

 

Cost price for Engine is 100$

 

 

Site "1" will be used as default Site for Purchase, Inventory and Sales

 

 

Within Site "1" Warehouse "11" will be used as default Warehouse for Purchase, Inventory and Sales

 

 

Items

 

When all items are created you can see them on Items list page

 

 

Please note that Car (AlexCar) and Car frame (AlexFrame) have Production type = BOM

 

Car (AlexCar) and Car frame (AlexFrame) will be manufactured using 2 operations and 1 operation routes correspondingly. Before we can define routings we will need to define the list of operations in the system

 

Operations

 

 

Car (AlexCar) and Car frame (AlexFrame) will be manufactured by different teams

 

Work cell: AlexC (AlexCar)

 

Alex Car work cell work cell will be responsible for Car (AlexCar) manufacturing

 

 

Work cell: AlexF (AlexFrame)

 

Alex Frame work cell will be responsible for Car frame (AlexFrame) manufacturing

 

 

Work cells

 

 

Please note that LOS book to order cell and Manual kanban release checkboxes are marked. This is important setup in order to use scheduling functionality in lean scenario. 

 

Work center group: AlexCar

 

Car (AlexCar) will be manufactured by AlexCar work center group

 

 

Cost categories for AlexCar work center group will be defined as following

 

 

Work center group: AlexFrame

 

Car frame (AlexFrame) will be manufactured by AlexFrame work center group

 

 

Cost categories for AlexFrame work center group will be defined as following

 

 

Work center groups

 

 

Work center: AlexCar1

 

AlexCar work center group will consists of AlexCar1 work center

 

 

Work center: AlexFrame1

 

AlexFrame work center group will consists of AlexFrame1 work center

 

 

From costing perspective the cost prices for different types of labor will be defined through Cost categories

 

Cost categories

 

Cost price for Setup labor will be 18$, cost price per Quantity will be 2$ and cost price for Process (Run time) will be 15$   

 

 

Costing sheet (Not defined)

 

For the sake of simplicity Costing sheet is not defined in this scenario

Car frame (AlexFrame) bill of materials will consist of Floor, Roof and 2 Sides

 

Bill of materials: AlexFrame – Lines view

 

Designer view provides a grid representation of Car frame (AlexFrame) sub-assembly

 

 

Bill of materials: AlexFrame – Designer view

 

Designer view provides a visual representation of Car frame (AlexFrame) sub-assembly

 

 

Car (AlexCar) bill of materials will consist of Car frame (AlexFrame) sub-assembly, Engine and Transmission components

 

Bill of materials: AlexCar – Lines view

 

Lines view provides a grid representation of Car (AlexCar) assembly

 

 

Please note that Car frame (AlexFrame) BOM Line type = Production. This is because we want to trigger automatic Kanban creation in order to produce Car frame (AlexFrame) sub-assembly

 

 

Bill of materials: AlexCar – Designer view

 

Designer view provides a visual representation of Car (AlexCar) assembly

 

 

Car frame (AlexFrame) route will consist of Welding operation only

 

Route: AlexFrame         

 

 

Please note that different Cost categories are specified for Setup, Run time and Quantity for all route operations

 

 

Car (AlexCar) route will consist of Assembly and Painting operations which will be executed sequentially

 

Route: AlexCar

 

 

Please note that different Cost categories are specified for Setup, Run time and Quantity for all route operations

 

 

Please note that Painting operation requires Queue time before (0.25 hours) and Queue time after (0.25 hours) as well as Run time (1 hour)

 

 

To be able to use Heijunka board II scheduling functionality for this lean scenario we have to implement Lean ordering (Book to order) functionality. Otherwise kanbans would simply be loaded into Manufactured kanbans screen. Kanbans that are loaded by way of the Lean sales process will appear in the Lean Booked to Sales Schedule forms. This is actually the production schedule for the cell. Sales demand can arrive at the cell/schedule via either a discrete order (Lean sales Ordering) or via a sales Schedule when the post to lean ordering/Load Lean Schedule by call off has been ticked.

 

Kanban parameters

 

Production order status = Finished means that when LOS line is received the corresponding production order will be updated to Report as finished status  

 

 

Create PTO from sales orders checkbox will generate a PTO kanban to pull inventory from a warehouse to a shipping warehouse based on the kanban parameter setup (including template). If Pull PTO kanban directly from source checkbox is selected, the PTO sales kanban will pull directly from a manufacturing cell if there is insufficient inventory in any intermediate warehouse. These parameters are required to trigger automatic creation of kanban for Car frame (AlexFrame) sub-assembly which has to be manufactured on its own 

 

 

Lean order parameters

 

If kanbans are managed within a BTO schedule that is represented on an LOS. The customer code held here is used to raise the dummy sales orders which are created to represent the kanban demand. It should be noted that dummy orders of this type are visible to all planning functions.

 

 

Selecting Create preproduction order checkbox will allow production orders to be created at the point the LOS is released rather than at the receive step

 

 

Lean order schedules

 

In book to order scenario I will create 2 Lean order schedules for AlexCar and AlexFrame work cells

 

 

Please note that Book to sales order checkbox is marked for Lean order schedules. If marked, this parameter will create the schedule as a Book-to-Order schedule.

 

Lean order schedule: AlexCar

 

 

Lean order schedule: AlexFrame

 

 

Family groupings

 

The family group structure set up in Lean sales ordering is used to firstly decide if the sales line/item is under the control on lean ordering and secondly which schedule to load. 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.

 

 

Item groupings

 

The items within the family are then defined.

 

 

Kanban template: AlexFrame

 

Kanban defaults remove the requirement to create manually kanban records for PTO items and, therefore, allow the system to generate the appropriate records automatically. In this particular case Car frame (AlexFrame) kanban template will be used to automatically generate kanban for Car frame (AlexFrame) sub-assembly

 

 

Please note that Pull-to-order kanban checkbox is marked for Car frame (AlexFrame) kanban template

 

 

After you define kanban template you can link it to the item. In this particular case Kanban template group = AlexFrame for Car frame (AlexFrame) item 

 

Section B: Creation

 

In Make to Stock scenario we will create Manufacturing Kanban for Car (AlexCar) manually

 

Kanban: AlexCar

 

Kanban is a document which in lean scenario controls manufacturing process of certain quantity of goods within defined timeframe. However in Microsoft Dynamics AX 2012 kanbans are complemented by Production orders, that's why upon completion of kanban Production order is created and [reported as finished]/ended. As the result production order provides a context for cost accounting.

 

 

Please note that Item origin = Manufactured which means that this is Manufactured kanban

 

 

Filter

 

Once you create Manufactured kanban for Car (AlexCar) production in order to see both kanbans on the same screen (Manufactured kanban for Car (AlexCar) and kanban template for Car frame (AlexFrame)) you will have to modify filter query by removing Kanban template = No condition  

 

 

Kanbans

 

As the result you will see Manufactured kanban for Car (AlexCar) and kanban template for Car frame (AlexFrame) on Kanbans screen

 

 

Kanban tickets: AlexCar

 

In order for kanban tickets to be created I'll execute Create kanbans function for Car (AlexCar) kanban

 

 

As the result 1 kanban ticket will be created for Car (AlexCar) kanban

In book to order scenario created kanban ticket will be loaded into LOS (Lean Order Schedule)

 

 

Please note that Replenishment order status = Booked to order LOS loaded for C_00000001 kanban order for Car (AlexCar) production

Section C: Estimation

 

In lean scenario there's no direct comparison to traditional estimation stage. However please note that upon completion of Manufactured kanban Production order will be created and [reported as finished]/ended. This means that traditional estimation will happen against Production order as a part of Production order life cycle but post-factum 

Section D: Planning (Scheduling) and Section E: Execution

 

Heijunka board II: AlexC

 

After kanban ticket for Car (AlexCar) production was loaded into LOS (Lean Order Schedule) you can proceed with its planning by using Heijunka board II.

 

 

Kanban schedule board provides visual representation of production queue and ability to plan kanban tickets by dragging and dropping bars into appropriate work cells for desired date

 

Please note that bar color indicates urgency

 

Once kanban ticket is planned you will see the following infolog

 

 

Sales orders

 

Please note that after you plan kanban ticket the system automatically created “demand” sales order for default BTO customer behind the scenes 

 

 

At this moment the only inventory transaction is the one that represents demand for Car (AlexCar) production

 

Inventory transactions

 

 

Kanban tickets: AlexCar

 

After kanban ticket for Car (AlexCar) production was planned on Heijunka board II the system changed its Replenishment order status to Booked to order LOS generated

 

 

Lean order schedules

 

 

Kanban tickets: AlexCar

 

After kanban ticket for Car (AlexCar) production was planned on Heijunka board II the system changed its Replenishment order status to Booked to order LOS generated

 

 

Lean order schedule lines: AlexCar – Release

 

The next step in Car (AlexCar) LOS line processing is to release LOS line

 

 

Please note that Marking checkbox is used to highlight a line when releasing the line

 

Once you release LOS line its Booked status changes to Released

 

 

Infolog

 

As the result of Car (AlexCar) LOS line release you will see the following message

 

 

This means that kanbans are not used to supply Engine and Transmission because I assume that we have enough of them in stock, and also currently there’s no Car frame (AlexFrame) available in stock for Car (AlexCar) production

 

Production order: AlexFrame

 

Because of Create preproduction order checkbox marked in Lean order parameters the system also created production order for Car (AlexCar) right away

 

 

Now you can see the list of production orders and their statuses on Production orders list page

 

Production orders

 

 

Kanban tickets: AlexFrame

 

During release of Car (AlexCar) LOS line the system automatically created kanban ticket for Car frame (AlexFrame) sub-assembly. In book to order scenario created kanban ticket will be loaded into LOS (Lean Order Schedule)

 

 

Please note that Replenishment order status = Booked to order LOS loaded for F_00000001 kanban order for Car frame (AlexFrame) production

 

Heijunka board II: AlexF

 

After kanban ticket for Car frame (AlexFrame) production was loaded into LOS (Lean Order Schedule) you can proceed with its planning by using Heijunka board II.

 

 

Kanban schedule board provides visual representation of production queue and ability to plan kanban tickets by dragging and dropping bars into appropriate work cells for desired date

 

Please note that bar color indicates urgency. In this particular case Car frame (AlexFrame) is required for production of Car (AlexCar)

 

Once kanban ticket is planned you will see the following infolog

 

 

Sales orders

 

Please note that after you plan kanban ticket the system automatically created “demand” sales order for default BTO customer behind the scenes 

 

 

Please note that now we have 2 Sales orders representing “demand” for Car frame (AlexFrame) and Car (AlexCar)

 

At this moment we only have 2 inventory transaction representing demand for Car frame (AlexFrame) and Car (AlexCar)

 

Inventory transactions

 

 

Kanban tickets: AlexFrame

 

After kanban ticket for Car frame (AlexFrame) production was planned on Heijunka board II the system changed its Replenishment order status to Booked to order LOS generated

 

 

Lean order schedule lines: AlexFrame – Release

 

The next step in Car frame (AlexFrame) LOS line processing is to release LOS line

 

 

Please note that Marking checkbox is used to highlight a line when releasing the line

 

Once you release LOS line its Booked status changes to Released

 

 

Infolog

 

As the result of Car frame (AlexFrame) LOS line release you will see the following message

 

 

This means that kanbans are not used to supply Floor, Roof and Sides because I assume that we have enough of them in stock

 

Production order: AlexFrame

 

Because of Create preproduction order checkbox marked in Lean order parameters the system also created production order for Car frame (AlexFrame) right away

 

 

Now you can see the list of production orders and their statuses on Production orders list page

 

Production orders

 

 

Lean order schedule lines: AlexFrame – Start

 

The next step in Car frame (AlexFrame) LOS line processing is to start LOS line

 

 

Please note that Marking checkbox is used to highlight a line when starting the line

 

Once you release LOS line its Booked status changes to Started

 

 

Lean order schedule lines: AlexFrame - Receive

 

The next step in Car frame (AlexFrame) LOS line processing is to receive LOS line

 

 

Please note that line is not marked when receiving against the line. It is necessary only to highlight the line at this point

 

In Update LOS line dialog I’ll specify Completed = 1

 

 

Infolog

 

As the result of LOS line receiving the system will post material and labor consumption, and report production order for Car frame (AlexFrame) as finished 

 

 

Now Car frame (AlexFrame) sub-assembly is available in inventory

 

Production order: AlexFrame

 

Car frame (AlexFrame) production order status will be changed to Reported as finished  

 

 

Now you can see the list of production orders and their statuses on Production orders list page

 

Production orders

 

 

Sales orders

 

Please note that after receiving Car frame (AlexFrame) LOS line the corresponding Sales order has been automatically deleted

 

 

Picking list journal is used to post material consumption

 

Production order: AlexFrame – Picking list journal

 

Picking list journal header references Production order for Car frame (AlexFrame)

 

 

Picking list journal lines have details of what components have been picked for Car frame (AlexFrame) production

 

 

Route card journal is used to post labor consumption

 

Production order: AlexFrame – Route card journal

 

Route card journal header references Production order for Car frame (AlexFrame)

 

 

Route card journal lines have details of what operations have been performed for Car frame (AlexFrame) production

 

 

Report as finished journal is used to record finished good receipt into inventory

 

Production order: AlexFrame – Report as finished journal

 

Report as finished journal header references Production order for Car frame (AlexFrame)

 

 

Report as finished journal lines have details of what finished goods have been received into inventory. In this case it is Car frame (AlexFrame)

 

 

Kanban tickets: AlexFrame

 

After receiving kanban ticket Replenishment order status will be changed to Received

 

 

Inventory transactions

 

At this moment the system first estimated Car frame (AlexFrame) production order and created issue inventory transactions for Car frame (AlexFrame) BOM components. Then the system immediately physically updated issue inventory transactions for Car frame (AlexFrame) BOM components and physically updated receipt inventory transaction for Car frame (AlexFrame). By other words Car frame (AlexFrame) BOM components have been consumed and Car frame (AlexFrame) has been produced and is available now

 

 

Please note that the system back-flushed consumption of materials at report production order as finished step

 

Production order: AlexFrame – Production posting

 

The result of reporting Car frame (AlexFrame) production order as finished is reflected in Production posting details

 

 

Please see details of Production posting for Car frame (AlexFrame) production order in the table below

 

Material consumption   Material consumption is 350$ based on cost of Car frame (AlexFrame) BOM components   *Inventory transactions   Inventory issue transactions for Car frame (AlexFrame) BOM components will be displayed on Voucher transactions screen for material consumption     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production, picking list” and which account was debited for “Production offset picking list”     Route consumption   Route consumption is 17$ based on cost of operations for Process and per Quantity for Car frame (AlexFrame)   *Inventory transactions   Inventory receipt transaction for Car frame (AlexFrame) will be displayed on Voucher transactions screen for route consumption     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production WIP issue” and which account was debited for “Production - WIP”     *Route transactions   Route transactions show the details of labor consumption postings for Process job (15$) and per Quantity (2$) which rolls up to 17$     Report as finished   Report as finished amount is 250$ based on standard cost of Car frame (AlexFrame)   *Inventory transactions   Inventory receipt transaction for Car frame (AlexFrame) will be displayed on Voucher transactions screen for report as finished     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production offset account, report as finished” and which account was debited for “Production, report as finished”     Please note that 250$ is standard cost of Car frame (AlexFrame)

 

After estimation performed automatically during report as finished process the system calculated estimated cost of production order based on production BOM and production route

 

Production order: AlexFrame – Price calculation

 

 

Lean order schedule: AlexCar – Start

 

The next step in Car (AlexCar) LOS line processing is to start LOS line

 

 

Please note that Marking checkbox is used to highlight a line when starting the line

 

Once you release LOS line its Booked status changes to Started

 

 

Lean order schedule: AlexCar – Receive

 

The next step in Car (AlexCar) LOS line processing is to receive LOS line

 

 

Please note that line is not marked when receiving against the line. It is necessary only to highlight the line at this point

 

In Update LOS line dialog I’ll specify Completed = 1

 

 

Infolog

 

As the result of LOS line receiving the system will post material and labor consumption, and report production order for Car (AlexCar) as finished 

 

 

Now Car (AlexCar) is available in inventory

 

Production order: AlexCar

 

Car (AlexCar) production order status will be changed to Reported as finished  

 

 

Production orders

 

Now you can see the list of production orders and their statuses on Production orders list page

 

 

Sales orders (No Sales orders)

 

Please note that after receiving Car (AlexCar) LOS line the corresponding Sales order has been automatically deleted. As the result there’s no Sales orders left 

 

Production order: AlexFrame – Picking list journal

 

Picking list journal header references Production order for Car (AlexCar)

 

 

Picking list journal lines have details of what components have been picked for Car (AlexCar) production

 

 

Route card journal is used to post labor consumption

 

Production order: AlexFrame – Route card journal

 

Route card journal header references Production order for Car (AlexCar)

 

 

Route card journal lines have details of what operations have been performed for Car (AlexCar) production

 

 

Report as finished journal is used to record finished good receipt into inventory

 

Production order: AlexFrame – Report as finished journal

 

Report as finished journal header references Production order for Car (AlexCar)

 

 

Report as finished journal lines have details of what finished goods have been received into inventory. In this case it is Car (AlexCar)

 

 

Kanban tickets: AlexCar

 

After receiving kanban ticket Replenishment order status will be changed to Received

 

 

Inventory transactions

 

At this moment the system first estimated Car (AlexCar) production order and created issue inventory transactions for Car (AlexCar) BOM components. Then the system immediately physically updated issue inventory transactions for Car (AlexCar) BOM components and physically updated receipt inventory transaction for Car (AlexCar). By other words Car (AlexCar) BOM components have been consumed and Car (AlexCar) has been produced and is available now

 

 

Please note that the system back-flushed consumption of materials at report production order as finished step

 

Production order: AlexCar – Production posting

 

The result of reporting Car (AlexCar) production order as finished is reflected in Production posting details

 

 

Please see details of Production posting for Car (AlexCar) production order in the table below

 

Material consumption   Material consumption is 1750$ based on cost of Car (AlexCar) BOM components   *Inventory transactions   Inventory issue transactions for Car (AlexCar) BOM components will be displayed on Voucher transactions screen for material consumption     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production, picking list” and which account was debited for “Production offset picking list”     Route consumption   Route consumption is 26.50$ based on cost of operations for Process and per Quantity for Car (AlexCar)   *Inventory transactions   Inventory receipt transaction for Car (AlexCar) will be displayed on Voucher transactions screen for route consumption     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production WIP issue” and which account was debited for “Production - WIP”     *Route transactions   Route transactions show the details of labor consumption postings for Process jobs (15$ + 7.50$ = 22.50$) and per Quantity (2$ + 2$ = 4$) which rolls up to 26.50$     Report as finished   Report as finished amount is 2500$ based on standard cost of Car (AlexCar)   *Inventory transactions   Inventory receipt transaction for Car (AlexCar) will be displayed on Voucher transactions screen for report as finished     *Voucher transactions   Ledger voucher provides details on which account was credited for “Production offset account, report as finished” and which account was debited for “Production, report as finished”     Please note that 2500$ is standard cost of Car (AlexCar)

 

After estimation performed automatically during report as finished process the system calculated estimated cost of production order based on production BOM and production route

 

Production order: AlexCar – Price calculation

 

 

Section F: Costing

The next step in Car (AlexCar) production order life cycle is to end production order

 

Production order: AlexCar – End

 

 

Please note that by using "Select" button I intentionally selected both production orders to be ended at the same time, that's why they both are displayed on the screen

Once you ended production orders you can see the list of production orders on Production orders list page

 

Production orders

 

 

From costing perspective after ending production order the system calculated actual cost of production order based on actual material and labor consumption

 

Production order: AlexCar – Price calculation

 

 

Please note that the system segregates consumption of materials from consumption of labor on Overview costing tab

 

You can also perform costing analysis for Car frame (AlexFrame) production order

 

Production order: AlexFrame – Price calculation

 

 

Inventory transactions

 

At this moment the system financially updated all receipt and issue inventory transactions related to Car frame (AlexFrame) and Car (AlexCar) production

 

 

Please note that the system recorded financial costs for inventory transactions according to posted material and labor consumption as well as all applied overheads, and also it calculated adjustments to predefined standard costs. Adjustments to standard cost were needed because initially I didn't use BOM calculation to calculate cost price of manufactured products and specified their cost prices manually

 

Production order: AlexCar – Production posting

 

The result of ending Car (AlexCar) production order is reflected in Production posting details

 

 

Please see details of Production posting for Car (AlexCar) production order in the table below

 

Costing   Costing amount 1776.50$ reflects the actual cost of production order which includes material consumption, labor consumption and various overheads applied   *Inventory transactions   All inventory transactions related to Car (AlexCar) production order will be displayed on Voucher transactions screen for costing     *Voucher transactions   Ledger voucher provides details on which account was credited for "Production issue" and which account was debited for "Production receipt".  Cost adjustment 723.50$ is also reflected in ledger postings.     Please note that when production order was ended the system reversed all previous postings for WIP (Work in process) including material consumption, labor consumption and all applied overheads

 

Production order: AlexFrame – Production posting

 

The result of ending Car frame (AlexFrame) production order is reflected in Production posting details

 

 

Please see details of Production posting for Car frame (AlexFrame) production order in the table below

 

Costing   Costing amount 367$ reflects the actual cost of production order which includes material consumption, labor consumption and various overheads applied   *Inventory transactions   All inventory transactions related to Car frame (AlexFrame) production order will be displayed on Voucher transactions screen for costing     *Voucher transactions   Ledger voucher provides details on which account was credited for "Production issue" and which account was debited for "Production receipt".  Cost adjustment 367$ is also reflected in ledger postings.     Please note that when production order was ended the system reversed all previous postings for WIP (Work in process) including material consumption, labor consumption and all applied overheads

 

Summary: This document describes a primer of lean manufacturing approach to Car production in Microsoft Dynamics AX 2009. The scenario operates with 2-level BOM with manufactured sub-assembly. Kanban is a main document in lean approach which controls manufacturing process. However upon completion of kanban the system creates and [reports as finished]/ends Production order. As the result Production order provides costing context. In this scenario I highlighted all aspects of manufacturing process including setup, creation, planning (scheduling), execution and costing. Most importantly I'm giving a detailed practical example of how to implement typical manufacturing scenario using lean approach in Microsoft Dynamics AX 2009. This provides a foundation for comparison between traditional approach and lean approach in Microsoft Dynamics AX 2009/2012. Please review other documents in the series to compare traditional manufacturing approach to lean manufacturing approach in Microsoft Dynamics AX 2009/2012.

 

Version: Microsoft Dynamics AX 2009 Demo VM Refresh 4 (LEAN)

 

Author: Alex Anikiev, PhD, MCP

 

Tags: Microsoft Dynamics ERP, Microsoft Dynamics AX 2012, Manufacturing, Production, Discrete Manufacturing, Traditional Approach, Lean Manufacturing, Lean Approach, Kanban, Production Order,  Setup, Creation, Planning, Execution, Costing.

 

Note: This document is intended for information purposes only, presented as it is with no warranties from the author. This document may be updated with more content to better outline the concepts and describe the examples.