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Microsoft Dynamics AX
Synchronizing Real-Time Product
Movement to Improve
Distribution Operation
Productivity
White Paper
Date: March, 2006
www.microsoft.com/dynamics/ax
STREAMLINE
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Table of Contents
Introduction ................................................................................................. 3
Overview: A Solution for Supply Chain Challenges .................................. 3
Key Solution Benefits...................................................................................................................................................................... 4
Specific Benefits................................................................................................................................................................................ 4
How Solution Functionality Drives Business Benefits .............................. 6
Streamlined Receiving ................................................................................................................................................................... 6
Built-in RF/RFID Technology ....................................................................................................................................................... 6
Quick Insight through the Warehouse Control Center ..................................................................................................... 6
Strategic Slotting and Putaway .................................................................................................................................................. 7
Enhanced Inventory Control ........................................................................................................................................................ 7
Flexible Cycle Counting ................................................................................................................................................................. 8
Effective Wave Planning ................................................................................................................................................................ 8
Configurable Picking Guidance .................................................................................................................................................. 8
Efficient Packing and Compliant Labeling ............................................................................................................................. 9
Integrated Load and Transportation Management ........................................................................................................... 9
Comply with Vendor Guidelines ................................................................................................................................................ 9
Improved Asset Management ................................................................................................................................................. 10
User-Defined Document Types ............................................................................................................................................... 10
Solution Map .............................................................................................. 11
Supply Chain Execution for Microsoft Dynamics AX Solution Map ...................................................................... 11
Demonstrated ROI and Quick Payback .................................................... 12
Deployment Considerations ..................................................................... 12
Client and Database Server Requirements ......................................................................................................................... 12
Conclusion .................................................................................................. 13
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Introduction Wholesale distribution operations are becoming more complex, with ever-changing customer
requirements, global and electronic marketplaces, multiple distribution channels, and compliance
initiatives adding to the perennial challenges of delivering accurately and on time. Successfully meeting
these challenges in ways that provide competitive advantage requires tight synchronization of business
processes throughout the supply chain and across the entire enterprise. Traditional warehouse
management or enterprise resource planning (ERP) solutions are not enough.
True distribution effectiveness means streamlined processes and timely access to the information
necessary for moving goods at maximum speeds. Tracking technologies such as radio frequency (RF) and
radio frequency identification (RFID) eliminate manual labor but by themselves cannot make up for
awkward workflows, redundant handling, or errors. Operational efficiency is the key to increasing
inventory turns, improving order fulfillment rates, reducing cycle time, and eliminating chargebacks.
This white paper addresses business and technical decision-makers facing these issues for ambitious
companies in which product distribution and transportation play key roles in daily operations and
profitability. It describes how the comprehensive, integrated management solution represented by Supply
Chain Execution for Microsoft Dynamics AX, formerly Microsoft® Business Solutions Axapta®, can help
build an integrated logistics solution.
Overview: A Solution for Supply Chain Challenges Supply Chain Execution for Microsoft Dynamics AX integrates information from your business and the
entire supply chain to help synchronize real-time product movement and improve productivity within
distribution operations. This comprehensive, fully integrated business solution helps companies to
balance the demands of extended supply chains and move product more efficiently to increase sales,
improve fill rates, and decrease costs.
Building on the multilanguage, multicurrency functionality provided by Microsoft Dynamics, Supply Chain
Execution for Microsoft Dynamics AX offers a powerful competitive advantage for companies distributing
across a global marketplace. The supply chain solution can be most beneficial to organizations that seek
to improve current distribution operations or to manage new initiatives for the following:
Distribution capacity
Transportation optimization
Delivery service improvement
Retail compliance
International expansion
Implementation of barcode and RF data collection
Global supply chain visibility
Trading partner collaboration
With the ability to handle single-byte and double-byte languages, international currency exchange,
various warehouses, and multiple companies, Supply Chain Execution for Microsoft Dynamics AX can
manage entire supply networks. As organizational needs change, the Microsoft Dynamics AX three-tiered,
scalable system architecture make it easy to tailor the s
future growth of the business.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Key Solution Benefits
Improve order fulfillment and accuracy
Eliminate inefficient processes and excess inventory
Enhance workload balancing and planning
Enable compliance with industry standards
Reduce transportation costs
Supply Chain Execution for Microsoft Dynamics AX delivers a flexible, modular approach, which offers
cost-effective options for taking advantage of the functionality that can best enhance your operations.
Extended Warehouse Management options streamline receiving, slotting, picking, and order fulfillment.
RFID-enabled technology helps ensure Electronic Product Code (EPC) compliance with customer
requirements and increases product visibility to facilitate tracking and inventory management while
improving cross docking and expedition of back orders. Strategies and tools for selecting optimal product
placement enable you to increase efficiency, shorten order fulfillment cycles, and eliminate user error. By
balancing workloads, setting performance targets, and deploying resources, companies can achieve
maximum work force productivity. Tracking all warehouse activities, sharing key performance indicators,
and measuring against baseline standards help ensure a compa
potential.
With integrated Transportation Execution options, companies can simplify and speed transportation
management tasks. Efficient load building, automated carrier assignments, and quick generation of
compliant documentation boost efficiency, eliminate errors, and reduce costs. Shipments can be
confirmed and tracked as needed to maintain visibility throughout distribution and help ensure timely
delivery and customer satisfaction.
Specific Benefits
Extended Warehouse Management and Transportation Execution together can provide these specific
benefits:
Increased warehouse productivity
Reduced labor, transportation, and administrative costs
Improved space utilization
More accurate inventory
Higher fill and throughput rates
Enhanced utilization of assets (such as forklifts or pallet jacks)
Optimal transportation service levels
Stronger distribution capacity
Enhanced customer service through improvements to: Order fill rates Order accuracy On-time delivery rates
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Value-added services Customer compliance
Support for international expansion
Smooth implementation of barcode and RF data collection, such as through RFID
Global supply chain visibility
Facilitation for trading partner collaboration
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
How Solution Functionality Drives Business Benefits Supply Chain Execution for Microsoft Dynamics AX enables more efficient flow of goods throughout the
supply chain, from inbound receiving through outbound shipment confirmations and tracking.
Streamlined Receiving
Companies can save time and labor with more efficient receiving processes, including the flexibility to
handle cross docking or other immediate needs. Inbound goods can be identified through a variety of
receiving touch points, including purchase orders, advanced shipping notices (ASNs) with container-level
information, and return merchandise authorizations (RMAs). Explorers, quick-find options, and folder-
oriented information groupings can speed receiving and help boost user productivity. These tools make it
easy to find and sort information by using the view that makes sense for each task, whether searching for
a single receipt or viewing inbound shipments by receipt date, source, priority, or another data field. The
top of the explorer window provides at-a-glance visibility of summary data such as total number of
receipts, containers, lines, units, and volume. Users can quickly drill down to details as needed.
When an inbound receipt is processed, Supply Chain Execution for Microsoft Dynamics AX can alert users
to route items directly to shipping dock locations for immediate-need or cross-dock handling. This logic
maximizes order fill rates and improves overall productivity by expediting product movement where
appropriate. For example, when a shipment arrives containing items required to satisfy outbound orders,
visual cues such as color-coded icons call attention to immediate needs. Receiving operators are
directed to bypass the standard putaway logic and route the item(s) to a cross-dock consolidation
location. This flexible functionality can be turned on or off by configurable system triggers.
Built-in RF/RFID Technology
While paper-based inventory tracking is fully supported, built-in RF wireless and RFID technology
increases the speed and accuracy of product identification and handling while helping ensure compliance
-time tracking and control
in all warehouse management systems. Users can scan license plates or easily generated barcoded labels
to speed putaway, picking, and cycle-counting activities. Additionally, warehouse processes can be set up
to require scanning of license plate IDs, items, locations, or location check digits to verify putaway
accuracy and increase inventory accuracy.
Companies can start quickly with paper-based inventory tracking and move to RF later with Supply Chain
Execution for Microsoft Dynamics AX.
Quick Insight through the Warehouse Control Center
Extended Warehouse Management and Transportation Execution solutions include an executive desktop
visibility tool called the Warehouse Control Center (WCC). The WCC offers real-time insight into the entire
distribution operation so managers can measure performance and manage improvement. A variety of
data views provide graphical, color-coded representations of key warehouse activities, status, and
progress. Users simply click to change the metrics or view for the information needed to balance
workloads, identify bottlenecks, reallocate resources, and help ensure operations run at full potential.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Managers can use the Warehouse Control Center to view activity summaries that support management decision-making and
planning and to see quick snapshots of conditions such as the status of inbound goods.
Strategic Slotting and Putaway
To make the putaway process a natural extension of the receiving process, companies can tailor a flexible
set of locating rules specific to their products and environment. Built-in best practice strategies can be
modified or replaced with the specific criteria and rules. The result is a highly adaptable, systemwide
storage configuration philosophy in which operational information, rather than rigid hard coding, drives
decisions.
As goods are received, the system directs putaway in the most efficient location given the strategies you
have selected. Optimal product placement based on order demand eliminates human error, increases
space utilization, minimizes unnecessary handling, and shortens fulfillment cycles by helping ensure more
efficient picking.
Slotting new products becomes easier. Companies can set slotting criteria in advance to obtain the most
efficient placement for each item in the warehouse.
Enhanced Inventory Control
Companies can maximize space utilization with a fast and efficient process for defining and managing
storage locations. Fixed locations and random locations can be configured according to different sizes,
cubes, weight capacities, and other characteristics. The Extended Warehouse Management solution tracks
all inventory down to the detailed location level. Item records can include multiple cross-references such
as Uniform Product Code (UPC) numbers to aid in product identification. Unlimited options for units of
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
measure (for example, each case, pallet, inner pack, bag, and box) and automated conversions provide
total flexibility and quick user familiarity during setup.
Inventory records are maintained in real time through status changes, transfers from one location to
another, and adjustments. Users can complete these activities by using RF devices or full-screen
workstations. Either way, increased inventory accuracy helps ensure appropriate and timely replenishment
while balancing inventory costs against service requirements.
To help ensure smooth order processing and timely product flow, a replenishment module makes
inventory movement possible within the distribution center as part of order handling or as an
independent request. As with locating rules, replenishment takes advantage of predefined strategies and
rules to control product movement. Demand-based criteria and minimum/maximum target levels are
evaluated as part of the replenishment process. When using RF product identification, replenishment tasks
can be interleaved with others to maximize user productivity and efficiency.
Flexible Cycle Counting
Comprehensive cycle counting increases inventory accuracy and relieves the need for onerous physical
inventory counting activities. Companies can create user-defined cycle count plans in addition to activity-
driven counts based on warehouse activities such as short picks at a location. Cycle counting can occur in
RF, on paper, or in mixed modes depending on warehouse requirements. As cycle counts proceed, the
system captures detailed statistics, providing quick access to count progress, open counts, percent
complete, error rates, and similar information.
Effective Wave Planning
Wave planning is the critical process of analyzing and grouping outbound orders into batches for release
to the warehouse floor. Efficient batches speed order processing and boost labor productivity.
The wave explorer enables users to view orders that are eligible for processing. The orders included might
have been downloaded from the business enterprise system, entered through the Internet, or created
internally. Grouping orders, either in the default view or user-
Waves can be executed manually, automatically, or as part of a predefined release schedule for total
control over how and when orders are processed.
Configurable Picking Guidance
You can maximize the efficiency of picking layouts and workflows. As waves are executed, how much
product to pick and from where is determined based on configurable rules that consider allocation
strategies such as first in/first out (FIFO), last in/first out (LIFO), minimum location visits, maximum
location space, location search hierarchies, and units of measure. The resulting pick decisions are
translated into work tasks for order fulfillment.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Support for both RF and paper-based picking provides maximum flexibility and faster implementations.
As with the putaway process, pick tasks are executed based on logical rules. A virtually unlimited number
of execution strategies from discrete order picking to batch picking to bulk picking can be easily
configured and implemented.
The explorers, quick-find tools, and reports provide insight into outstanding tasks and task details, which
enables you to change priorities, hold tasks, and make other informed decisions to achieve an efficient yet
flexible picking process.
Efficient Packing and Compliant Labeling
You can manage packing processes with flexibility and efficiency. Containers may be identified during
wave planning or specified by users when packing into final shipping containers at a packing station. The
two concepts can also be combined, for example, to generate full case labels during a wave and
loose/mixed carton labels at a packing station. If desired, the hierarchy of packing data can include carton
detail for generating ASN data that is passed to other parts of the enterprise.
In addition to vendor-compliant labels, the Transportation Execution solution enables users to easily
generate labels that meet the requirements of all major parcel carriers. Built-in support includes rating,
manifesting, and electronic manifest transmission as well as less than truckload (LTL) rating with Voluntary
Interindustry Commerce Standards (VICS) compliant bills of lading.
Integrated Load and Transportation Management
Companies can build shipping loads and generate load documentation that meets customer and carrier
requirements. Multiple order confirmations are provided with one click. Carrier assignments can be
automated based on routing guide information and preconfigured customer, least-cost, or best-way
guidelines. Full parcel manifesting support means that companies can eliminate standalone parcel
manifesting systems.
Visibility into shipping activities in real time enables companies to optimize day-to-day efficiency. Carrier
routing and rating tools help reduce transportation costs and increase customer service.
Incoming and outgoing shipments can be planned, tracked, and audited. Carrier communication options
include bills of lading and manifest information that can be accessed online as needed. Tracking and
tracing tools help ensure full product visibility throughout the distribution process. Managers can quickly
identify delays or changes in shipment due dates or carrier changes and make proactive responses to
avert potential delivery problems. This can help identify and expedite critical shipments, such as those at
risk of detention.
Comply with Vendor Guidelines
Supply Chain Execution for Microsoft Dynamics AX can meet the vendor compliance guidelines of the top 100
retailers listed in STORES Magazine. Built-in RFID technology can help improve shipment planning and
accuracy, help ensure EPC compliance with customer requirements, optimize order fulfillment processes,
and enhance in-stock positions.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Improved Asset Management
As daily tasks proceed, Extended Warehouse Management captures data for analyzing and optimizing
warehouse operations. From the time needed to complete a certain task to the actual cost of completing
it, all activities performed on the system are tracked and cataloged for improved asset management.
Summarized displays of productivity data appear in an Asset Management Explorer. Yearly, monthly, or
daily information can be accessed through the explorer or in Warehouse Control Center views. This
functionality provides executive users with the detailed information needed to effectively manage the
work force and drive improvement.
User-Defined Document Types
Standard document types are included for all areas of warehouse operations, and these standards can be
easily configured by users to eliminate unnecessary programming and ease implementation. Document
types include shipping labels, vendor labels, container putaway lists, shipment pick lists, bills of lading,
packing lists, parcel manifests, truck manifests, and cycle count sheets. New document types can be
introduced through pre-existing standard document configurations. Many document types are built in
Microsoft Office Word 2003, so new fields can be added to document templates the same way new text is
added to any standard Word document. Document additions and changes are straightforward and driven
by business need rather than requiring costly or time-consuming code changes.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Solution Map Supply Chain Execution for Microsoft Dynamics AX is a multilanguage, multicurrency business
management solution that supports high transaction rates and users across multiple sites. Employees,
customers, and vendors can work using their own language and currency, while smooth conversion and
reporting functions help ensure full insight and visibility at the highest levels of the organization.
Flexible modules permit business managers to tailor the solution, paying only for what is currently
needed. Since all functionality is installed initially, additional capabilities can be easily unlocked as the
needs change and multiply.
Supply Chain Execution for Microsoft Dynamics AX Solution Map
The following diagram shows the industry-specific capabilities provided by Supply Chain Execution for
Microsoft Dynamics AX as they integrate with core Microsoft Dynamics functionality.
Supply Chain Execution for Microsoft Dynamics AX
Microsoft Dynamics AX Core Functionality
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Demonstrated ROI and Quick Payback Experience shows that Microsoft Dynamics AX solutions can provide a rapid return on investment (ROI).
Payback is also achieved quickly. An independent study by Nucleus Research, Inc.1 in 2004 found that 75
percent of participating Microsoft Dynamics AX customers achieved a positive ROI within an average of
only 23 months. The remainder had used Microsoft Dynamics AX for periods of less than two years and
were expected to achieve a payback within months. More than half of respondents reduced staffing costs
as a direct result of their Microsoft Dynamics AX deployments, while 44 percent reduced IT costs in
moving from their legacy systems. The positive returns cited in the study ranged from more inventory
turns and improved delivery times to productivity gains and changes in working capital.
Deployment Considerations The reliability, connectivity, and performance of Supply Chain Execution for Microsoft Dynamics AX are
backed by Microsoft quality assurance. In addition, ongoing service and support are provided by
Microsoft Support Services that means one convenient, familiar contact for all help, maintenance, and
upgrade support.
Client and Database Server Requirements
One or more of the following:
Client computers Microsoft Windows® 2000
Microsoft Windows XP
Server platforms
Microsoft Windows 2000 Server
Microsoft Windows 2000 Advanced Server
Microsoft Windows Server 2003, Standard Edition
Microsoft Windows Server 2003, Enterprise Edition
Web servers
Microsoft Internet Information Services 5.x
Microsoft Internet Information Services 6.0 (from Microsoft
Axapta 3.0 SP2)
Databases Microsoft SQL Server 2000
Oracle 9i
Microsoft Office (only if
needed)
Microsoft Office 2000
Microsoft Office XP
Microsoft Office 2003 Editions
1 Nucleus Research, Inc. The Real ROI from Axapta. Research Note E116, October 2004.
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SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY
Conclusion Supply Chain Execution for Microsoft Dynamics AX helps empower distribution operations with speed,
efficiency, and comprehensive control. The solution integrates smoothly with your enterprise
management applications to help you orchestrate product movement and optimize complex processes in
real time.
With Supply Chain Execution for Microsoft Dynamics AX, companies have the tools they need to face the
challenges of increasing customer requirements, globalization, multiple distribution channels, and
compliance with government and trading partner initiatives while continuing to grow their business.
For more information, visit www.microsoft.com/dynamics/ax
The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication.
Because Microsoft must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of
Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication.
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