Microsoft Dynamics AX 2012 Manufacturing – Traditional Primer

Microsoft Dynamics AX 2012

Manufacturing – Traditional Primer
 

Purpose: The purpose of this document is to illustrate traditional manufacturing approach in Microsoft Dynamics AX 2012 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 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. 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 approach 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 will be dealing 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 traditional 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 team will be responsible for Car assembly and another team will be responsible for Car frame welding
 

Bill of materials	Route

 

One of the important 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 released products 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 dimensions, default Site and Warehouse settings will be defined for released products and finally cost price will also be defined for all released products (not using BOM calculation for BOMs)
 

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

Released product: Car (AlexCar)

Car (AlexCar) released product will be created using decentralized approach
 

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
 

Please also note that Default order type = Production

Car (AlexCar) will be manufactured that's why Production type = "BOM"

Released product: Engine

Engine released product will be created using decentralized approach

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 Sales

Released product: Transmission

Transmission released product will be created using decentralized approach

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

Car frame (AlexFrame) will be welded from Floor, Roof and 2 Sides

Released product: AlexFrame

Car frame (AlexFrame) released product will be created using decentralized approach

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

Please also note that Default order type = Production

Car frame (AlexFrame) will be manufactured that's why Production type = "BOM"

Released product: Floor

Floor released product will be created using decentralized approach

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

Released product: Side

Side released product will be created using decentralized approach

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

Released product: Roof

Roof released product will be created using decentralized approach

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

Released products

When all released products are created you can see them on Released products 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

Resource group: AlexCar

Car (AlexCar) will be manufactured by Alex Car Team 1

Resource group: AlexFrame

Car frame (AlexFrame) will be manufactured by Alex Frame Team 1

Resource: AlexCar1

Alex Car Team 1 will consists of 1 worker: Arnie Mondloch

Please note that Alex Car Team 1 will be responsible for Car (AlexCar) manufacturing

Resource: AlexFrame1

Alex Frame Team 1 will consists of 1 worker: Ahmed Barnett

Please note that Alex Frame Team 1 will be responsible for Car frame (AlexFrame) manufacturing

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

Cost category: Setup

Cost price for Setup labor will be 18$

Cost category: Run time

Cost price for Process labor will be 15$

Cost category: Quantity

Cost price per Quantity manufactured will be 2$

Costing sheet

The structure of manufacturing costs will be defined in Costing sheet

Please note that Costing sheet is also used to define and calculate different types of overheads such as material overhead, labor overhead and plant overhead

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

Bill of materials: AlexCar – Designer view

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

Bill of materials: AlexCar – Lines view

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

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

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

Bill of materials: AlexFrame – Designer view

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

Bill of materials: AlexFrame – Lines view

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

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)

 

Please note that Resource requirements are specified for all route operations

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

Please note that Resource requirements are specified for all route operations

Section B: Creation

 

In Make to Stock scenario we will create Production order for Car (AlexCar) manually

Production order: AlexCar

Production order is a document which in traditional scenario controls manufacturing process of certain quantity of goods within defined timeframe

Production orders

When production order is created you can see it on Production orders list page

When production order is created the system will copy product's active BOM and active route in order to create production BOM and production route

Production order: AlexCar – Production BOM

Production BOM is a list of components to be used for this particular Production order

Please note that you can change Production BOM to meet specific requirements for particular Production order without affecting product's active BOM

Production order: AlexCar – Production Route

Production Route is a list of operations to be used for this particular Production order

Please note that you can change Production Route to meet specific requirements for particular Production order without affecting product's active Route

At this moment we only have 1 inventory transaction representing production order receipt for Car (AlexCar)

Inventory transactions

Section C: Estimation

 

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

Production order: AlexCar – Estimate

It's important to mention that during estimation the system will create inventory issue transactions for BOM components, calculate estimated cost of manufactured product and create related Production orders for manufactured sub-assemblies if needed

Once estimation is finished you can see the list of production orders on Production orders list page

Production orders

Please note that while estimating production order for Car (AlexCar) the system also created and estimated production order for Car frame (AlexFrame) sub-assembly. This is because we intended to produce the sub-assembly in-house and specified BOM line type = Pegged supply for Car frame (AlexFrame) in Car (AlexCar) bill of materials

After the system created production order for sub-assembly you can also review Car frame (AlexFrame) production BOM and production route

Production order: AlexFrame – Production BOM

Production order: AlexFrame – Production Route

From costing perspective after estimation the system calculated estimated cost of production order based on production BOM and production route

Production order: AlexCar – Price calculation

Please note that the system segregates consumption of materials from consumption of labor on Overview estimation tab. Also different types of overhead costs were added based on Costing sheet setup

However on Costing sheet tab you can also see an aggregated Total as well as breakdown based on Cost groups defined in Costing sheet

As soon as Car frame (AlexFrame) Production order was also estimated you can now review the estimation details for it as well

Production order: AlexFrame – Price calculation

Please note that the system provides costing breakdown per Cost group as it was defined in Costing sheet

After estimation the system created receipt inventory transaction for Car frame (AlexFrame) and all necessary issue inventory transactions for BOM components for Car (AlexCar) and Car frame (AlexFrame) 

Inventory transactions

Please note that the reservation exists between Car (AlexCar) receipt inventory transaction and Car frame (AlexFrame) issue inventory transaction. This is because we intend to produce Car frame (AlexFrame) sub-assembly in-house and then use it in order to produce Car (AlexCar)

Section D: Scheduling

 

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

In this particular scenario I'll execute Job scheduling which will generate number of jobs and provide exact dates and times for them

Production order: AlexCar – Job Scheduling

Please note that in order to schedule both production orders at once I marked "Schedule references" checkbox. This makes perfect sense because Car frame (AlexFrame) will be required for Car (AlexCar) production

Production orders

Once Job scheduling is finished you can see the list of production orders and their statuses on Production orders list page

Please note that the system scheduled both production orders and generated number of jobs based on times defined on route operations

Production order: AlexCar – Jobs

As the result of Job scheduling based on Production Route the system generated a number of jobs 

Production order: AlexCar – Gantt chart

Gantt chart provides visual representation of production schedule, ability to reschedule for the user by dragging and dropping bars and much more

Please note that Gantt chart provides 2 views: Order view and Resource view

Production order: AlexFrame – Jobs

As the result of Job scheduling based on Production Route the system generated a number of jobs

Production order: AlexFrame – Gantt chart

Please note that Car frame (AlexFrame) sub-assembly logically is scheduled to be produced before Car (AlexCar) production is scheduled to start

At this moment no changes happened to inventory transactions, however by the result of scheduling the system did appropriate capacity reservation for resources involved

Inventory transactions

Section E: Execution

 

The next step in Car (AlexCar) production order life cycle is to release production order which releases production order from top floor to shop floor and indicates that production order can be started

Production order: AlexCar – Release

Please note that I want to release both production orders at once by marking "References" checkbox

Production orders

Once release is finished you can see the list of production orders and their statuses on Production orders list page

At this moment no changes happened to inventory transactions

Inventory transactions

The next step in Car frame (AlexFrame) production order life cycle is to start production order

Production order: AlexFrame – Start

Please note that I'm starting production order for Car frame (AlexFrame) only now. This is because Car frame (AlexFrame) will have to be produced before it can be used in Car (AlexCar) production.

In this case I'll pre-flush materials and labor consumption which means that material and labor consumption will be posted up-front. Please notice "Post picking list now" and "Post route cad now" checkboxes which are marked. I assume that there's enough on-hand for the components to be consumed.

Please note that you can also back-flush materials and labor consumption which means that material and labor consumption may be posted at the time when you report your production order as finished 

Infolog

As the result the following message will be displayed informing that Picking list journal and Route card journal have been posted for the consumption of material and labor 

Production orders

At this moment Production order for Car frame (AlexFrame) has already been started and Production order for Car (AlexCar) is still in Released status

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

Production order: AlexFrame – Jobs

Please note that Job status for Welding (Process) job changed to Waiting

At this moment the system physically updated issue inventory transactions for Car frame (AlexFrame) BOM components. By other words components for Car frame (AlexFrame) have been used in production process

Inventory transactions

Please note that issue inventory transactions for Car frame (AlexFrame) BOM components changed their statuses to Deducted

Production order: AlexFrame – Production posting

The result of material and labor consumption for Car frame (AlexFrame) production order is reflected in Production posting details

Please note that the system also calculated Indirect costs based on Costing sheet setup

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, packing slip", which account was debited for "Production offset picking list" as well as on additional postings happened because of material overhead applied      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", which account was debited for "Production - WIP" as well as on additional postings happened because of labor overhead applied     *Route transactions   Route transactions show the details of labor consumption postings for Process job (15$) and per Quantity (2$) which rolls up to 17$     Indirect cost   Indirect cost 2.09$ represents labor overhead applied to labor consumption based on Costing sheet setup. Please note that plant overhead is calculated based on labor overhead and contributes to the sum   *Inventory transactions   Inventory receipt transactions for Car frame (AlexFrame) will be displayed on Voucher transactions screen for indirect cost     *Voucher transactions   Ledger voucher provides details on which account was credited for "Estimated indirect absorption", which account was debited for "Estimated indirect absorption offset" in regards with labor overhead applied     *Indirect cost transactions   Indirect cost transactions provide information regarding the breakdown of indirect costs incurred which are related to labor consumption according to cost groups set up in Costing sheet      Indirect cost   Indirect cost 7$ represents material overhead applied to material consumption based on Costing sheet setup. Please note that plant overhead is calculated based on material overhead and contributes to the sum   *Inventory transactions   Inventory receipt transactions for Car frame (AlexFrame) will be displayed on Voucher transactions screen for indirect cost     *Voucher transactions   Ledger voucher provides details on which account was credited for "Estimated indirect absorption", which account was debited for "Estimated indirect absorption offset" in regards with material overhead applied     *Indirect cost transactions   Indirect cost transactions provide information regarding the breakdown of indirect costs incurred which are related to material consumption according to cost groups set up in Costing sheet

 

The next step in Car frame (AlexFrame) production order life cycle is to report production order as finished
 

Production order: AlexFrame – Report as finished

Please note that I report only Car frame (AlexFrame) production order as finished because we need to produce sub-assembly before we can consume it in production of Car (AlexCar)

Please note that "End job" checkbox is marked which means that while reporting production order as finished I intend to mark all production order jobs as completed

Infolog

As the result the following message will be displayed informing that Report as finished journal has been posted for the receipt of finished goods into inventory 

Once you reported production order as finished you can see the list of Production orders on Production orders list page

Production orders

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)

Production order: AlexFrame – Jobs

Please note that Job status for Welding (Process) job changed to Ended

Inventory transactions

At this moment the system physically updated receipt inventory transaction for Car frame (AlexFrame). By other words Car frame (AlexFrame) sub-assembly has been produced and is available now

Please note that the system updated the status of Car frame (AlexFrame) inventory issue transaction which represents Car (AlexCar) BOM components from "Reserved ordered" to "Reserved physical" because Car frame (AlexFrame) is now available for consumption 

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
 

Report as finished   Report as finished amount is 250$ based on standard cost of Car frame (AlexFrame)   *Inventory transactions   Inventory receipt transactions 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)

 

Now once we have all components for Car (AlexCar) production we can finally start production of main assembly
 

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

Production order: AlexCar – Start

In this case I'll pre-flush materials and labor which means that material and labor consumption will be posted up-front. Please notice "Post picking list now" and "Post route cad now" checkboxes which are marked. I assume that there's enough on-hand for the components to be consumed. Car frame (AlexFrame) BOM component we have recently produced in-house.

Infolog

As the result the following message will be displayed informing that Picking list journal and Route card journal have been posted for the consumption of material and labor  

Production orders

At this moment Production order for Car frame (AlexFrame) has already been reported as finished and Production order for Car (AlexCar) is Started status now

Picking list journal is used to post material consumption

Production order: AlexCar – 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: AlexCar – 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

Production order: AlexCar – Jobs

Please note that Job status for Assembly and Painting jobs changed to Waiting

Inventory transactions

At this moment the system physically updated issue inventory transactions for Car (AlexCar) BOM components. By other words components for Car (AlexCar) have been used in production process

Please note that issue inventory transactions for Car (AlexCar) BOM components changed their statuses to Deducted

Production order: AlexCar – Production postings

The result of material and labor consumption for Car (AlexCar) production order is reflected in Production posting details

Please note that the system also calculated Indirect costs based on Costing sheet setup

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, packing slip", which account was debited for "Production offset picking list" as well as on additional postings happened because of material overhead applied      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", which account was debited for "Production - WIP" as well as on additional postings happened because of labor overhead applied     *Route transactions   Route transactions show the details of labor consumption postings for Process jobs (7.50$ + 15.00$ = 22.50$) and per Quantity (2$ + 2$ = 4$) which rolls up to 26.50$     Indirect cost   Indirect cost 3.14$ represents labor overhead applied to labor consumption based on Costing sheet setup. Please note that plant overhead is calculated based on labor overhead and contributes to the sum   *Inventory transactions   Inventory receipt transaction for Car (AlexCar) will be displayed on Voucher transactions screen for indirect cost     *Voucher transactions   Ledger voucher provides details on which account was credited for "Estimated indirect absorption", which account was debited for "Estimated indirect absorption offset" in regards with labor overhead applied     *Indirect cost transactions   Indirect cost transactions provide information regarding the breakdown of indirect costs incurred which are related to labor consumption according to cost groups set up in Costing sheet      Indirect cost                 Indirect cost 35$ represents material overhead applied to material consumption based on Costing sheet setup. Please note that plant overhead is calculated based on material overhead and contributes to the sum   *Inventory transactions   Inventory receipt transaction for Car (AlexCar) will be displayed on Voucher transactions screen for indirect cost     *Voucher transactions   Ledger voucher provides details on which account was credited for "Estimated indirect absorption", which account was debited for "Estimated indirect absorption offset" in regards with material overhead applied     *Indirect cost transactions   Indirect cost transactions provide information regarding the breakdown of indirect costs incurred which are related to material consumption according to cost groups set up in Costing sheet

 

The next step in Car (AlexCar) production order life cycle is to report production order as finished

Production order: AlexCar – Report as finished

Please note that "End job" checkbox is marked which means that while reporting production order as finished I intend to mark all production order jobs as completed

Infolog

As the result the following message will be displayed informing that Report as finished journal has been posted for the receipt of finished goods into inventory

Once you reported production order as finished you can see the list of Production orders on Production orders list page

Production orders

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

Production order: AlexCar – 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)

Production order: AlexCar – Jobs

Please note that Job status for Assembly and Painting jobs changed to Ended

Inventory transactions

At this moment the system physically updated receipt inventory transaction for Car (AlexCar). By other words Car (AlexCar) assembly has been produced and is available now

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
 

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)

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. Also different types of overhead costs are represented based on Costing sheet setup

However on Costing sheet tab you can also see an aggregated Total as well as breakdown based on Cost groups defined in Costing sheet

Also you can review production variances on Production variances screen

You can also perform high level 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 1814.63$ 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 offset account issue". Similarly which account was credited for "Production offset account receipt" and which account was debited for "Production receipt".  Cost adjustment is reflected in "Production substitution variance" posting.     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 376.09$ 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 offset account issue". Similarly which account was credited for "Production offset account receipt" and which account was debited for "Production receipt".  Cost adjustment is reflected in "Production substitution variance" posting.     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 traditional manufacturing approach to Car production in Microsoft Dynamics AX 2012. The scenario operates with 2-level BOM with manufactured sub-assembly. Production order is a main document in traditional approach which controls manufacturing process and provides a context for cost accounting. In this scenario I highlighted all aspects of manufacturing process including setup, creation, estimation, scheduling, execution and costing. Most importantly I'm giving a detailed practical example of how to implement typical manufacturing scenario using traditional approach in Microsoft Dynamics AX 2012. This provides a foundation for comparison between traditional approach and lean approach in Microsoft Dynamics AX 2012. Please review other documents in the series to compare traditional manufacturing approach to lean manufacturing approach in Microsoft Dynamics AX 2012.

Version: Microsoft Dynamics AX 2012 FPK (CEU)

Author: Alex Anikiev, PhD, MCP

Tags: Microsoft Dynamics ERP, Microsoft Dynamics AX 2012, Manufacturing, Production,
Discrete Manufacturing, Traditional Approach, Lean Manufacturing, Lean Approach, Production Order, Setup, Creation, Estimation, Scheduling, 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.