Microsoft Dynamics AX Technical ConferenceFebruary 3–5, 2014Bellevue, WA
Managing Capable-to-promise and Build-to-order scenarios in Microsoft Dynamics AX 2012
Conrad VolkmannSenior Program Management Lead
IntroductionWe are excited to share Microsoft Dynamics AX 2012 R3 with you…• This presentation contains Microsoft confidential information• Dynamics AX 2012 R3 is pre-release software and subject to change• Microsoft provides no license, express or implied, in this presentation• Please review and respect the disclaimer included in all printed
and electronically distributed materials
AgendaUsing the delivery date controlConcept and configurationSales lead time
ATP (Available to Promise)Build to stock
CTP (Capable to Promise)Build to orderPlan configuration
Planning fencesFuturesAlerts
CTP with Kanbans (Lean)Fixed quantity Kanbans vs. Safety stock
Using the delivery date control
Delivery date controlMechanism that allows the sales order operators to make accurate and precise order and delivery promises
Delivery date control
Includes Sales lead
time
Uses on-hand and planned
supply
Triggers explosion
Creates orders or kanbans
Fixed administrative
time
None
Sales lead time X
ATP X
ATP + Issue margin
X X
CTP X X X X
Configuration of Delivery Date ControlDefault setting: Accounts receivable -> Setup -> Accounts receivable parameters -> Shipments
Product specific setting: Product -> Default order settings -> Sales orderProduct -> Site specific order settings -> Sales order
Sales order specific Delivery Date ControlDuring creation of sales order
Sales order header
Sales order line
Delivery Date Control HierarchyFor itemsAccount receivable parametersDefault order settingsSite-specific order settings
On sales order header:Account receivable parameters
On sales order line:Item setting for specific dimension combinationSales order header
Delivery Date Control UsageSales order entryUses ”Sales” settings
Transfer order entryUses ”Inventory” settings for itemCTP not available
Basic scheduling of the Delivery Date ControlOrder entry deadline (Start today or tomorrow)Coverage calendar Transport time (days)Warehouse and Transport calendar for shippingCustomer receipt calendar for delivery
• Order entry deadline
Now• Coverage
calendar
Coverage lead time(+margin
)
• Warehouse calendar
• Transport calendar
• Customer calendar
Transport
time
Attributes of the sales order line impacting the ship and receipt date:Mode of Delivery This value may impact the transport times. If this value is changed, delivery date control is performed.
Dimensions These values may impact item availability as well as lead times. If any of these values are changed, delivery date control is performed.
Delivery address This value may impact the transport times. If this value is changed, delivery date control is performed.
Delivery Control This value may impact the ship and receipt dates. If changed, delivery date control according to new setting is performed.
Ship date or receipt date Delivery date control is performed immediately. If the dates are not allowed, the “Available ship and receipt dates” dialog opens with info about the problem.
Quantity This value may impact the availability. If this value is changed, delivery date control is performed.
NoneWith Delivery Date Control = None:Available dates only subject to calendarsTransport time impacts receipt date
Sales lead timeAvailable ship date = Today + sales lead time (days)Available receipt date = Available ship date + Transport days
Example:Today = Oct 10Sales lead time 7 daysTransport days: 1 dayAvailable ship date = 10+7 = Oct 17Available receipt date = 17+1 = Oct 18
Calendar impactToday Oct 10Sales lead time 8 daysTransport days: 1 day
Available ship date = 10+8 = Oct 18 (displayed as Oct 20, due to the weekend)Available receipt date = 18+1+weekend = Oct 21
Saturday and Sunday are closed in the calendar
Setup the transport calendarSales and marketing > Settings > Modes of delivery > Transport calendar
Tip: To define a default transport calendar, create an entry with Warehouse blank. This association is valid for all warehouses that do not have a specific transport calendar associated.
ATP – Available to promise / Build to stock
Build to stockPlanning principles:Forecast or minimum stock trigger planned ordersPlanned orders are firmed based on firming fencesFixed quantity kanban’s or scheduled can be used
ATP allocates sales orders againstAvailable On-handExisting planned ordersNo creation of additional planned orders
Consequence: Planned order horizon must cover the sales horizon to work effectively
ATP (Available to Promise)
Uses existing supply only – no new supply createdThe earliest possible date is defined by the earliest date when the ATP quantity >= the requirement quantityDone for the specific dimension combinationOptional to include existing planned ordersBeyond the ATP time fence, supply is considered infiniteIf there is no availability within the ATP time fence, the first (calendar) day after the time fence is the suggested day
Not looking at sales lead timePast due demand and supply handled
ATP Setup - handling delayed orders
Today
ATP time fence
ATP backward demand time fenceDe
man
d sy
stem
dat
eATP delayed demand offset time
Dem
and
cons
ider
ed d
ate
ATP backward supply time fence ATP delayed supply offset time
Supp
ly
cons
ider
ed d
ate
Supp
ly
syst
em d
ate
ATP Setup – handling delayed orders
ATP + Issue marginSame as ATP, plus issue margin is added in order to allow for ”administrative time”
The issue margin valid for the item at the actual dimension combination is usedCoverage groupMaster planMaster plan parameters
Introduced in AX2012
Setting the scene for the ATP demo • Item: D0009 using ATP• On-hand 5 pcs• Production order October 25th for 10 pcs• Issue margin 3 days• ATP time fence 30 days
ATP - ensuring proper delivery commitment
CTP – Capable to promise / Build to order
Build to OrderPlanning principlesForecast can trigger planned orders, but only for capacity and material planningCustomer order decoupling point: Level of components that can/need to be replenished by build to stock in order to accommodate the needed sales or production lead times.Firmed orders are created based on actual demand
Firming fences when using a plan that does not include any forecast demandPegged supplyEvent kanbans
CTP allocates sales orders againstAvailable On-handExisting planned ordersCreation of additional planned orders
Consequences Lead times must be accurate Bottleneck resources should be run on
finite capacity
CTPPlans the needed supply in order to meet the demandBased on Master scheduling/ExplosionUses the Dynamic planFutures dates must be configuredFences are important
Creates planned orders if necessary, based on supply policies for the item and coverage dimensionsNote: Sales lead time will still be applied to determine the default requested date.
Master plan setup for CTPDon’t use the same plan for Static and DynamicCTP will update the dynamic plan and using the same plan for static and dynamic plan can result in Actions, caused by Net change calculating a different futures date.
The dynamic plan must includeOn-hand inventoryInventory transactions
Optional to ensure available capacityFinite capacityFinite capacity time fence
Time Fences setup for CTPFutures date are the foundation for CTPFutures messages must be selectedFutures fence must be defined (CTP will end when the futures fence end)
Firming fence Should cover the lead time plus some administration or security time Should always be longer than the Freeze fenceFirming fence setup for Lean - create min two coverage rules
1) For products with Scheduled Kanbans: Firming fence must be set for the period where you want the work cell capacity to influence the CTP result
2) For products with Event and Fixed quantity Kanbans: Firming fence should be set to 0, because event handling is independent of firming fences in AX 2012 R3
Time Fences setup for CTP
Cov-erage
Ex-plo-sion
Capacity
Action
Futures
Freeze
FirmingAutomatic firming of planned orders(Create Production- and Purchase orders)
Existing planned orders are not changed when running a new master schedule - they are frozen
Futures setting for detecting and reporting delays and scheduling possible (delayed) delivery dates
Action setting to optimize inventory carrying cost by proposing changes to existing Production and Purchase orders
Capacity evaluation and planning using production route (outside the time fence Inventory lead time is used)
Explosion of BOM items to detect derived demands (both material and capacity)
Scheduling period
Demo
CTP – With production
Enters order
line for a
produced produc
t with CTP
Get CTP warning:
Requested
ship date
can not be meet
Earlist
posible ship date calculate
d based on capacity and
material
availabilit
y
Deliver after production completes
Lean scheduling basicsSchedule from date on the kanban schedule boardCapability to move planned kanban jobs to a later dateDefault will postpone the kanban if there is a capacity shortageYou can change the capacity shortage reaction
Lean scheduling basicsSchedule from date on the kanban schedule boardNote that jobs will always be added at the end of the planning periodsSchedule forward from date is not limited by the planning fence defined in the production flow model
Lean scheduling: activity constraintsConfigure an End to Start constraintDefines the time needed between the end of the predecessor and the start of the successor
CTP scenario with KanbansFebruary 1st
Susan crates a sales order for
Product A
Customer wants a receipt date of February 5th
CTP process starts by creating
the Event Kanbans
Explosion is started and creates Kanban for B and Purchase
order for C
Safety Stock vs. Fixed KanbansMake sales orders take priority over safety stockModel your safety stock with fixed quantity Kanbans instead of minimum stock
Problem:Receipts that are pegged to issues of type Security Stock in the dynamic plan are not available to cover new sales demand in CTP.Consequences:
New planned orders are created and eventually firmedActual lead times and fences are appliedConfirmed date is later than expected
Safety Stock vs. Fixed KanbansMake sales orders take priority over safety stockModel your safety stock with fixed quantity Kanbans instead of minimum stock
Solution:Fixed quantity kanbans represent the security stockMaster scheduling does not create issues to replenish security stockKanbans create receipts that can be pegged against new sales ordersUse a Freeze fence that is at least as long as the Kanban lead time for planned order creation
If demand cannot be covered by the actual onhand or the actual planned kanbans, new planned orders are created outside of the freeze fence
Use Empty Kanban scanning to report empty kanbans in security stock
Fixed quantity Kanban
Kanban for 5 pcs
Activity (Idle)
Kanban for 5 pcs
Customer8
7 pcs
Kanban for 5 pcs
Empty
Safety Stock vs. Fixed Kanbans
Inventory
Safety Stock(Minimum of 80 pcs)
Fixed Kanbans(4 Kanbans of 20 pcs each)
Don’t require MRP
Min = 80
20
40
60
80
Quantity Quantity
Time Time
Supply
Demand
Build to order with event Kanbans
Demo
CTP with Event Kanbans
Summery – CTP and KanbansCTP and event kanban can be combinedGreat for build to order
As the event kanban are instantly adjusted to the order this helps to:Deliver what the customer needs, when he needs it Minimize inventory
CTP with firming fence leads to some manually clean-up when changes and cancelations occursKeeping an eye on the actions is needed in this configuration
ResourcesMicrosoft Dynamics AX Manufacturing and Planning bloghttp://blogs.msdn.com/b/axmfg/
InformationSourcehttps://informationsource.dynamics.com
Whitepaper: "Lean manufacturing - Capable to promise and Kanban job scheduling" Customersource - Partnersource
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Microsoft Dynamics AX 2012 R3 is pre-release software under development. All dates, features, and descriptions specified are preliminary, are based on current expectations, and are subject to change at any time without notice.
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