Forecast Reduction in Microsoft Dynamics AX

By Donald Clark, Fullscope,  Functional Architect, CFPIM, CSCP

If your manufacturing company uses a forecast, one of the decisions you must make is how to handle that forecast when you run MRP, called Master Scheduling in Microsoft Dynamics AX.

For example, two key questions are: 1) how much of the forecast should you consider valid and 2) how should you consume the forecast with actual orders. Many take the approach that in nearer periods of time, you should consider less of the forecast when planning and in further out periods you should consider more of the forecast.

This is a fundamental concept that is generically referred to as “replacing forecast with knowledge” and Dynamics AX provides the tools to do just that.

Basic Setup

The first thing you need to do is to visit the Master Plan and look at the setup – specifically in the Forecast group where the Reduction Principle resides.

Path = Master planning > Setup  > Plans  > Master plans

forecast1

The Reduction Principle determines how AX will reduce the forecast requirements when you run the Master Scheduling Process. The four choices, along with what each does, are:

  • None: No reduction occurs during master scheduling.
  • Percent – reduction key: The reduction key drives how AX reduces the forecast during Master Scheduling.
  • Transactions – reduction key: Transactions drive how AX reduces the forecast during Master Scheduling.
  • Transactions – dynamic period: Actual order transactions that occur during the dynamic period drive how AX reduces the forecast during Master Scheduling. The dynamic period covers the current forecast dates and ends with the start of the next forecast.

This example uses Percent – reduction key as the Reduction Principle. Now look at the Reduction key itself.

Path = Master planning  >  Setup  > Coverage > Reduction keys

forecast2

As mentioned earlier, many people take the approach that in periods closer to the present, actual orders should have replaced the forecasted demand. Any remaining forecast should be reduced so that the organization does not over-produce. Those same folks also assume that the further out into the future you look, the more of the forecast you should take into account.

Again, this is just one approach to managing forecast reduction and is an approach the Reduction Key allows you to take.

This Reduction Key reduces the forecast 95% in the first month, 90% in the second month, etc. If you had a forecast quantity of 1,000 in July, AX would only calculate demand for 950 because the Reduction Key took it down by 95% assuming also that actual orders had consumed most or all the original forecast.

Here is a recap of the forecast reduction principles. The three basic choices are:

  • None – No consumption occurs

forecast3

In this graph, the Master Plan is a combination of the Gross Requirements and Sales Orders. Sales Orders in AX do not consume the forecast.

  • Open Orders — Open orders consume the forecast

forecast4

In the first period in this example, the Sales Orders of 30 consume all but 10 of the forecast quantity of 40.

  • Percent – reduction keys and orders consume the forecast

In this example, in the second period, Sales Orders = 20, Forecast = 40 (which will be reduced by 75%) so the total required quantity is 30.

Coverage Groups

Here’s one more setup to consider …the Coverage Group.

(Detailed discussion about the Coverage Group and its inner workings are beyond the scope of this post. This is a high level example.) You need to select the Reduction Key here. Remember the Coverage Group settings override the Master Plan settings.

Path = Master planning > Setup > Coverage > Coverage groups

forecast6

Into Action

Now you can see how the settings play together in Master Scheduling. As an example, there is a Product FG-2112 that has a demand forecast of 500 each every 14 days as shown below.

There is also various sales order demand for this product.

forecast7

When you run Master Scheduling, you get the following planned orders for the product.

forecast8

Now you can look at planned order number 807311 in detail by double-clicking on it in the grid.

forecast9

The Pegging tells the source of demand story for the planned order that has a total quantity of 169. You see three different sales order lines at 48 each and a demand forecast for 25. Remember the original forecast was 500, but this particular demand occurs in the first month so the Reduction Key reduces it by 95%, leaving us with 50 for the forecast.

This was a brief overview of how Dynamics AX allows you to consume forecasts, and the example here is just one of many ways to handle forecast demand in AX.

For more information on forecasting, or other topics in AX, call at 770-772-3121 or visit www.fullscope.com

Part 1: How to Control Item Availability & Access Pricing Info in Microsoft Dynamics AX

dynamics-ax-technical-tip

By Glen Kiessling, Fullscope Senior Business Analyst

Item Lists is a new feature in Microsoft Dynamics AX 2012 R3, and it can be found in the Sales and Marketing module in the Setup section. This feature is designed to give you more options when creating a sales order and adding lines to the order. Item Lists gives you the option to have customer specific lists and to have Item Lists that are accessible to all customers at sales order creation.

Sales Order “Copy From All” Command

Prior to this new option, the only method to hasten the addition of sales order lines to a new or existing sales order was the “Copy From All” or “Copy From Journal” command in the Copy section of the Sales Order tab in the Action Pane on the sales order lines view (See image 1). (For this article, I will cover only the “Copy From All” command which allows copying from sales orders, quotations, confirmations, packing slips, invoices and project invoices.) This form allows you to select a sales order in the top grid and then shows all items from that order in the bottom grid. All items in the lower grid appear selected and ready to copy to the sales order. You can de-select individual items, and then can change the quantity or unit characteristics on each line. Whatever you manipulate will be copied to the sales order line(s). There will be a line created for each item. This form does allow the copy of charges and also the recalculation of pricing but they are options that must be checked before clicking OK to create the lines. If you forget to check the recalculate prices box, then exact pricing from the copies sales order will populate the new sales order. These could easily be out of date prices which, at a minimum, would require manual correction by you, or at worst the sales order and invoicing might occur with inaccurate pricing.

Image 1 – “Copy From All” Command

Image 1 – “Copy From All” Command

Item List Requirements

There are two checkboxes that are required to activate the Item List functionality.

  1. In Accounts Receivable Parameters on the General fast tab in the section titled Item List, the Prompt for Item List checkbox must be checked (See image 2).
    – Once this box is checked the Item List form will appear during the creation of all sales orders.
  2. If you do  not want to use an Item List, then click the closed button on the form to continue to the newly created sales order in lines view.
    On the customer master record on the Sales Order Defaults fast tab in the section titled Item List, the Enable Item List checkbox must be checked (See image 3).
    – This is required so that you can setup an Item List for this specific customer.
Image 2 – Accounts Receivable Parameters Prompt for Item List Checkbox

Image 2 – Accounts Receivable Parameters Prompt for Item List Checkbox

Image 3 – Customer Master Enable Item List Checkbox

Image 3 – Customer Master Enable Item List Checkbox

A customer specific item list reflects the customer account number on the item list and will only be available for selection during sales order creation for that specific customer. It will not appear when a sales order is created for any other customer. The item list allows any number of items to be added and maintained, along with their respective Units of Measure and quantities. (See image 4)

Image 4 – Customer Specific Item List

Image 4 – Customer Specific Item List

Non-Customer Specific Item List

A non-customer specific item list has all the characteristic described above except it is available for selection during sales order creation for all customers and all sales orders. It does not reflect a specific customer account. This could be used for sales groups etc. (see image 5)

Image 5 – Non-Customer Specific Item List

Image 5 – Non-Customer Specific Item List

Set up Customer Specific Item List

To set up a customer specific item, make sure that the checkboxes mentioned in the Requirements section above are checked and then follow these steps:

  1. Access the Item List form in the Sales and Marketing module, Setup section and click Item List.
  2. Click Item List Generation in the top bar (see image 6)
  3. Select a Generation Type (see image 7):
    a – Number of Orders – uses a designated number of sales orders from the past for the customer account specified to create the Item List.
    b – Number of Days – uses all orders for the customer specified for the number of days specified to create the Item List.
  4. Set Value (see image 8) – this is the number of orders or the number of days to specify for the generation type set in item 3 above.
  5. Set Minimum Quantity (see image 8) – if you enter any number above 0 in this field then orders with that number of lines or less will be omitted from use in item list generation.
  6. Select customer account number (see image 8)
  7. Click OK (see image 8)

The items from the generation will appear in the grid with quantities and units of measure. You may adjust quantities and units of measure on each line. You may add lines with additional items that did not appear in the auto generation and you may also delete lines. Once you have the list completed as desired, you may close the form.

Image 6 – Item List Generation Button

Image 6 – Item List Generation Button

Image 7 – Generation Types

Image 7 – Generation Types

Image 8 – Define Item List Generation Parameters

Image 8 – Define Item List Generation Parameters

Set up Non-Customer Specific Item List

A non-customer specific item list does not allow auto generation of items. To set up a non-customer specific item, make sure that the checkboxes mentioned in the Requirements section above are checked and then follow these steps:

  1. Access the Item List form in the Sales and Marketing module, Setup section and click Item List.
  2. Click New in the top bar (see image 9)
  3. Enter a description(Name) for the item list in the description field (see image 9)
  4. A blank grid will appear (see image 9), on the first line select an item number in the item number field. The product name will appear once selection is made (see image 10).
  5. Enter a quantity in the quantity field (see image 10).
  6. Enter a unit of measure in the unit field (see image 10).
  7. Repeat steps 4 through 6 until all desired items have be added to the item list grid
  8. Click Close
Image 10 – Enter Items, Quantities and Units of Measure

Image 10 – Enter Items, Quantities and Units of Measure

Image 9 – Setup Non-Customer Specific List

Image 9 – Setup Non-Customer Specific List

That’s a lot to digest for this post.  Check back next week for Part 2, and meantime, shoot me any direct questions at glen.kiessling@fullscope.com

Are Smart Part Numbers Still Smart?

By Randy Goldbeck, Fullscope Director of Servicessmartparts_jpg

During a recent visit to an active Microsoft Dynamics AX ERP system implementation workshop, I got involved in a debate about part numbers and the numbering nomenclature. It is a common occurrence with ERP projects for a debate to come up about how parts (raw materials, sub-components, finished goods, etc.) should be numbered and named. At the heart of the debate are the cryptic part number identifiers created long before ERP systems became pervasive throughout Manufacturing and Distribution companies, and the fact that no one wants to change these “Smart Part Numbers.”

Usually there is logic and structure to the characters and numbers that users can’t seem to live without. Smart part numbers serve as a short hand where the legacy users know that a R600-A36-#002 means that this is a raw material for the 600 series product line that was produced in the Atlanta plant and requires inspection on receipt. Everyone who has been with the company for some time knows that the Atlanta plant (#002) produces this item. When you hire a new planner, however, he/she has no clue that any part ending in #002 means the Atlanta plant made it.

Consider Your Customer View

In this situation, especially for finished goods, think about it from the Customer’s point of view. Your customer has no idea what the complicated part numbers mean, or how you use them internally. In fact, complicated part numbers are a hindrance for the Customer who is simply trying to locate the right part in your catalog or on your website, packing list, bill of lading or invoice.

The Simple Truth

Manufacturers must reduce their reliance on Smart Part Numbers. All areas of the business should work to define a no-logic, or at least a minimal logic, part number convention. Dynamics AX provides a technology-enabled, attribute-based part number solution to deliver the same operational support.

Advantages to move from Smart Part Numbers to insignificant numbers include:

  1. Centrally accessible in Dynamics AX to materials handling, production, engineering, production control, purchasing or sales
  2. Possible reduction in training time and costs because new users will not need to learn the complicated numbering system
  3. Reduction in key punch errors
  4. Reduced chance of “running out of logic”
  5. Product changes will not impact the part number
  6. Consistent part numbers across multiple plants/sites

Start Small

With over 20 years of ERP implementation experience with manufacturing companies, our recommendation is to not undertake a massive project to revise all existing part numbers to some Insignificant number. Instead, consider a grandfather clause approach. Leave all existing part numbers in place and, as new parts, items, etc., are created, move towards an Insignificant numbering system.

What do you think about Smart Part Numbers? If you have questions or feedback, shoot me an email at randy.goldbeck@fullscope.com.

Options for Setting Up Purchase Requisitions and Workflow in Microsoft Dynamics AX

Insights from: Diane Perry, Edgewater Fullscope, Functional Architect

Companies often want to implement buying power across multiple divisions and departments, but also have a requirement to control spending and inventory levels. By introducing Purchase Requisitions, with an approval workflow hierarchy, Microsoft Dynamics AX ERP is able to support procuring of product throughout a company while providing strict controls on what can be suggested for purchasing and how much is being purchased at what price. It provides a way to keep people informed on the total spend.

Step 1: Planning out a simple approval process workflow. Sketch out the requirements for the workflow including conditions for automatic approval and rejection.  

purchase-req-graphic1

Step 2: Design the Purchase Requisition Managerial Hierarchy. Gather information to support the hierarchy including:

Employees (Name of Employee as they will be “hired” in AX)

Position and Job of Employee (these are created and assigned in AX in the Human Resources Module)

What position will each Employee/Position report to (this relationship is created in the Human Resources Module)

Does the Employee/Position have an automatic approval amount? This is used to support the Spending Limit Policy attached to the workflow.

Note: If there are two or more people with the same position but their automatic approval amounts are different, they cannot share the same position. For example, 2 Lab Techs will enter Purchase Requisition. One can spend $500 and one can spend $800. This will require 2 unique Lab Tech positions.

Ex: Lab Tech 1 = $500, Lab Tech 2 = $800

Hint: Plan the positions, amounts, reports to, in a spreadsheet before building in AX.

purchase-req-graphic2

Step 3: Build Position, Employee, Reports to

Human Resources> Common> Organization> Positions

purchase-req-graphic3

Step 4: Configure the Signing limit policy

Applying Positions and Limits: Organization administration> Setup> Signing limits> Signing limit policies

purchase-req-graphic4

Signing limit policies hold the Spending amount and Approval amount of “Jobs.” This setup holds the information to support the automatic approval workflow decision or the need to pass the spending amount through the hierarchal process for further approval (meaning the employee’s spending limit has been exceeded).

Tip: Signing limit policies are company-specific and employees assigned the same “Job” have the same spending limit.

Step 5: Configure the Purchasing Policy

Within the company-specific Purchasing Policy settings/options are found to manage access to Procurement Categories, Items, Vendors and Pricing.

Creating a Purchasing Policy: Procurement and Sourcing> Setup> Policies> Purchasing Policies

purchase-req-graphic5

  • Category access policy rule: Management of Categories available on the Purchase Requisition line. Choose categories to make available for requisitioning.

purchase-req-graphic6

  • Category policy rule: Management of the ability to add new Categories, Vendors on the Purchase Requisition line, enforcing of matching, enforcing of receiving and deduction requirements, and the option to accrue expenses upon receipts of Products/Items.

purchase-req-graphic7

  • Purchase requisition control rule: Management of the required fields on the Purchase Requisition line.

purchase-req-graphic8

  • Purchase order creation and demand consolidation rule: Manage automatic consolidation and settings to control demand consolidation vs. manual consolidation (which can be across multiple companies)

purchase-req-graphic9

Step 6: Allow a person to requisition on behalf of someone else

Configure requisitioning permissions: Procurement and sourcing> Setup> Policies> Purchase requisition permissions

purchase-req-graphic10

Assign an employee the ability to requisition for another employee.

Tip: This is helpful when one person is designated to enter Purchase Requisitions for a group of people but the workflow needs to support each individuals spending limit. This setup allows the Requisition to still flow through the approval hierarchy.

EDGE for AX Quick Results Entry

Insights from: Fullscope Product Development Team

Entering test results for all tests included on a Quality order can be a cumbersome and time-consuming task. The Quick Results Entry feature developed by the Fullscope Product Development Team has drastically enhanced the user interface to allow for entering test results for a quality order. The new Quick Results Entry option on the Quality order presents the data for all tests consolidated on one form. The default quantities are based on the Quality order quantity and informational details about minimum, maximum and target values for each test on the Quality order.

Using Quick Result Entry

The Quick Results Entry ribbon option can be selected from the quality order header.

QRE1

The standard Results form, accessible from the results ribbon option, can also be used to enter Quality order test results. The screenshots below show the difference between the two forms.

On the top is the standard Results form. It is just for one test and does not include information related to Standard, Minimum and Maximum values for the test. The Result quantity needs to be entered for every row on this form.

On the bottom is the Quick Results Entry form. It has consolidated all of the tests on one form, and it includes visibility to the Standard, Minimum and Maximum test ranges for informational purposes. The Result quantity (or the Result CW quantity if the item is a Catch Weight item) is defaulted from the quality order quantity. The test results can quickly be entered in the test result column for the entire Quality order without ever leaving the form.

QRE2

QRE15

The Quick Results Entry form supports four different ribbon actions. The New and the Delete options allow the Quality order quantity to be separated out and results entered for different quantities. For example, if the Quality order quantity is 5, using the ‘New’ action, a total of five lines can be entered for that test and a different test result can be entered for each quantity. The sum of the quantities for each test must still equal the total quantity of the quality order. The Validate ribbon action performs the required validation for the selected line and determines if the line is a pass or a fail. The Split ribbon option provides the ability to take the selected line and split it into multiple lines.

QRE3There are two Split options provided. The Single line split option will take the selected line and create two lines where the sum of the quantities matches the total quantity on the selected line. For example, if the line quantity was 8 and a Split quantity of 3 is entered, the result will be two lines, one with quantity of 3 and one with a quantity of 5. Different test results can then be entered for both lines.

QRE4The second Split option is a Multiple lines split. This can be used to quickly create rows with the same test quantity. The Result quantity per line needs to be entered. The system then will determine the Total number of results lines based on the result quantity per line. For example, if the current line has a quantity of 8 and the Result quantity per line entered is 2, the system will automatically create 4 lines instead of one, each with a quantity of 2. If the number is not even, the system will do as many rows as possible with the residual in the last row. For example, if the current line has a quantity of 8 and the Result quantity per line entered is 3, the system will create 3 result lines, two lines with the quantity of 3 and a third line with the residual quantity of 2 for a total quantity of 8. Note: If the item is a CW item, CW quantity fields open up on the split form to enter instead of the standard quantity fields.

The EDGE Quick Results Entry enhancement can be purchased as a part of the EDGE enhancement package from Fullscope. In addition to Quick Results Entry, the EDGE package contains the following enhancements:

• CAPA
• Electronic Signature Extension
• Electronic Batch Record
• Approved Customer List
• Flexible Sampling
• Instrument Calibration
• Customer-Specific COA
• Quality Associations for Transfer Orders and Return Orders
• Production Dispensing

Fullscope Speakers Ready to Participate in New AXUG-led LCS Virtual Conduit Series

Are you looking for more information on Microsoft Lifecycle Services (LCS), designed to help manufacturers improve the predictability and quality of their Microsoft Dynamics AX 2012 implementations by simplifying and standardizing the ERP implementation process to realize business value faster?

Beginning in January, AXUG is kicking off a monthly LCS Virtual Conduit webcast series to promote better communications between LCS users, Microsoft and those partners, like Fullscope, who work with the product. AXUG invited Fullscope to participate in this series because we’ve been at the forefront of LCS technology, including developing and releasing our FoodAXPress LCS product on Azure last year, and currently having other LCS industry solutions in development.

The series offers attendees the opportunity to have their LCS needs heard and addressed, gather product information, and learn how others are using it. Each Virtual Conduit webcast is limited to the first 12 registrants so each attendee has the opportunity to discuss ideas and needs. To promote interaction, attendees are asked to come prepared with questions, comments and concerns.

If you are looking for an opportunity to have a voice into LCS, then this series is for you!

For session descriptions and to register, login to AXUG.

For more information about Microsoft Lifecycle Services, visit the LCS website

Microsoft Lifecycle Services Virtual Conduit Series Featuring Fullscope Speakers

Date/Time Series Title
Wednesday, January 13, 12:00-1:00 pm ET First Steps to LCS!
Wednesday, February 10, 12:00-1:00 pm ET BPM – What can we use it for?
Wednesday, March 9, 12:00-1:00 pm ET Setting Up LCS Environments
Wednesday, April 13, 12:00-1:00 pm ET Checking the Health of your ERP through LCS
Wednesday, May 11, 12:00-1:00 pm ET Monitor your System

5 WHS Dynamics AX Tips & Tricks

August Blog Series: Tips & Tricks

Insights From: Jay Yadavalli (Fullscope Dynamics AX Consultant)

Microsoft Dynamics AX ERP offers manufacturers the Warehouse (WHS) feature, which is designed to help run more efficient operations. The module assists in improving productivity, visibility and accuracy through several features including inventory control, production processes, mobile devices and more. Maximize your Dynamics AX WHS investment with the following WHS tips & tricks:

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Seven Tips for a Successful Enterprise Software Implementation

August Blog Series: Tips & Tricks

Insights From: Seven Tips for a Successful Enterprise Software Implementation

Moving your manufacturing company forward often means implementing a new ERP software solution, like Microsoft Dynamics AX. Make sure you’re getting the most out of your investment and the user adoption your company requires by laying the groundwork first. Having a plan for before, during and after the implementation can spell the difference between success and failure. Be prepared.

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What is Lifecycle Services (LCS) for Dynamics AX?

July Blog Series: Hot Topics

Insights From: Doug Payton (Fullscope Technical Consultant) and Sharlee Cobb (Fullscope Senior Project Manager)

Lifecycle Services (LCS) for Microsoft Dynamics AX offers many features to customers and partners working within it – from evaluating code to transitioning an implementation project and much more. Take a listen to the FullFocus episode below, which is the first LCS podcast in our series.​

How Much Time (& Money) Do You Waste During an ERP Data Migration?

June Blog Series: A Case For…

Insights From: Gaja Mohandass (Fullscope Senior Consultant), Marty Bullock (Fullscope Dynamics AX Engagement Manager), Shannan Tanner (Program Manager at The Shepherd Color Company)

How much time has your manufacturing business lost to an ERP data migration? For many, the process of entering large sets of data into a new system can add months onto an implementation project. It’s tedious and comes with other challenges like manual entry errors and productivity downtime. Data migration is one of the most critical activities in an implementation, and poor data quality or missing data at system start up can cause an ineffective or failed implementation.

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