Lean manufacturing execution 4/19/2017 12:52 PM Lean manufacturing execution Kanban and pull-based manufacturing MICROSOFT CONFIDENTIAL © 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Lean Manufacturing - Overview 4/19/2017 12:52 PM Organization Planning / scheduling Kanban and pull-based execution Costing for Lean manufacturing Production flow Period templates Manufacturing kanbans Kanban board for process Cost calculation without route Work cells / resource groups Enhanced forecast scheduling Withdrawal kanbans Bar codes Backflush costing Activities Production schedules Manufacturing without PO Kanban inventory overview Value stream operating unit Locations Scheduled kanbans Cycle time performance indicator Event kanbans Financial dimensions Lean manufacturing for Microsoft Dynamics AX is built on four pillars: Mapping the lean organization Planning and scheduling Kanban and pull-based execution Costing for lean manufacturing   The kanban framework  A kanban is an essential part of a pull system of supply, which is a critical element of Lean production/supply. Kanban rules are the supply policies for lean manufacturing. They are tied to production flows as the foundation that defines the lean manufacturing organization. Kanban rules can be set up to support a variety of make-to-stock and make-to-order scenarios. The two Kanban types within Microsoft Dynamics AX 2012 are Manufacturing and Withdrawal. They are used to manufacture and transfer materials in the production process. Manufacturing kanban A Kanban of the type “manufacturing” is assigned to a process that adds value. The Kanban is linked to a production flow activity and thus a resource group with the role of a work cell. Withdrawal kanban A Kanban with the type “withdrawal” creates a transfer job that is based on a transfer activity. Withdrawal kanbans are used to move a kanban of a specific Item between supermarkets, warehouses, and production locations. Withdrawal kanbans do not add value and do not get planned as manufacturing Kanbans do. Manufacturing without production orders Lean manufacturing in Microsoft Dynamics AX introduces a new job and transaction framework that allows manufacturing without production orders. Cycle time performance indicator Lean manufacturing in Microsoft Dynamics AX allows the calculation of required and actual cycle times for a specific activity. The cycle time performance indication visualizes the actual cycle time performance of a work cell on the kanban boards. Subcontracting Lean manufacturing for Microsoft Dynamics fully supports subcontracting of activities to vendors. Kanban quantity calculation The kanban quantity calculation is used to determine the kanban quantities for the kanban rules based on historical or actual demand. The kanban quantity calculation policy allows the configuration of the calculation formula and the periods used for the calculation. The calculation is run as a simulation that allows multiple re-calculations, the results can be manually overwritten before creating the future kanban rules. Kanban board for process jobs The kanban board for process jobs is the single manufacturing user interface to prepare, pick, start, and complete jobs for lean manufacturing: Figure: Kanban Board for Process Jobs The kanban board provides all information and overwiews related to the kanban jobs to check availability of material and priority of jobs. Feature overview    Barcodes All job status registrations can be supported by Barcode or RFID scan by setting the scanning mode of the kanban board and scanning the kanban card number in the registration field. Scanning modes are: Prepare Start Complete Empty handling unit Select job in job list Kanban quantity overview The kanban quantity overview controls give a visual indication on the On-hand, supply and demand status of the kanban rules related to the selected work cell. Event kanbans Event kanbans are only created out of the related demand, so event kanbans belong to the category “make-to-order”. The creation of event kanbans is initiated when certain events occur. In Microsoft Dynamics AX, these events occur when you create sales lines, when estimating production orders, upon creation of upper-level Kanban demand, or when reaching a certain level of on-hand inventory. Printing of kanban cards and pick lists Kanban cards can be printed manually or automatically, triggered by the kanban creation or a status change of a kanban job. Kanban cards can be printed in two different styles: With production instructions With shipment information (including batch and serial numbers) Pick lists can be printed as a separate ad-hoc document out of the production flow based on the selected jobs or as an attachment to the kanban cards. Inventory and WMS integration Lean manufacturing in Microsoft Dynamics AX fully supports tracking with batch and serial numbers for products and material. Material can be picked with output orders and shipped through shipments to remote sites or subcontractors. Kanban transfer jobs are managed by a kanban board dedicated to transfer jobs, which allows filtering on production flow activities, warehouses, and locations by source or destination—or both. Kanban scheduling board Subcontracting kanbans Printing (kanban cards, picking lists) Supply schedule form Kanban quantity calculation Kanban inventory integration Capable to promise (CTP) MICROSOFT CONFIDENTIAL © 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Lean manufacturing execution Value proposition Lean manufacturing execution 4/19/2017 12:52 PM Multi-activity kanbans – Kanban flows Integration in master planning (mixed mode) Full visibility of kanban schedule to master planning Supply schedule overview Capable to promise (CTP) based on explosion and work cell schedule Visual user interfaces Kanban boards – Scheduling, process, transfer Kanban quantity overviews Cycle time performance indicator Bar code support MICROSOFT CONFIDENTIAL © 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Unified kanban architecture 4/19/2017 12:52 PM The Kanban architecture in Microsoft Dynamics AX 2012 covers the complete spectrum from “Make to Stock” to “Make to Order / Configure” order scenarios.   Kanban rules are used as supply policies and define the kanban types and replenishment strategies. Kanban Type: Manufacturing = A kanban that uses at least one process activity to convert material to semi-finished or finished products. Withdrawal = A kanban that consists of a single transfer activity to move goods from one location to another without conversion. Replenishment strategies: Fixed quantity – Fixed number of kanbans with fixed product quantity circulate between item source (warehouse or work cell) and point of consumption (Supermarket). Single use – Covers additional demand for fixed-quantity kanban rules. Scheduled – Kanbans are created base on planned orders from master scheduling or manually with variable quantity. Event Sales event – Kanbans are created for sales lines. Production BOM line event – Kanbans are created for BOM lines of Production Orders. Kanban line event – Kanbans are created for BOM lines of kanbans. Minimum Stock event – Kanbans are created to cover demand from minimum stock. Important: Depending on the kanban rule, the creation of kanbans and the related jobs is different. However, scheduling and manufacturing execution are unified, so all replenishment strategies can be mixed in the same work cell. MICROSOFT CONFIDENTIAL © 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Replenishment strategies Example of a production flow 4/19/2017 12:52 PM Replenishment strategies A production flow consists of process and transfer activities.   The process of value stream mapping – applied according the guidance of the Lean Enterprise Institute – results in a model of a future state value stream map. This result can be modeled in Microsoft Dynamics AX as a production flow version. Warehouses, supermarkets, picking, and output locations are modeled in the Microsoft Dynamics AX Inventory breakdown. The production flow as such is defined independent of a specific output product. However, product structures and BOM levels need to be considered when modeling the activities. For output products, semi-finished products and consumed material, kanban rules, and lean scheduling groups model the individual behavior of the products in the production flow: What activities are needed to create a specific product. What replenishment principle is applied: Fixed quantity – A fixed number of kanbans with fixed product quantity circulate between source of supply and source of demand. Scheduled – Kanbans are created based on individual demand. This concept is integrated in master scheduling that automatically loads the production flow with demand based on scheduled kanban rules. Event – Kanbans are created on direct Pull from a Sales Order, a BOM Line, or a Kanban Line. This system is independent  of master scheduling. The event creation can be triggered instantly or deferred to a batch job. MICROSOFT CONFIDENTIAL © 2010 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Kanban board for process jobs 4/19/2017 12:52 PM Job list / sequence Job details Instructions Picking list Pegged jobs (upstream) Bar code mode Bar code input Finished goods overview Material overview The job list The central control on the kanban board is the job list. It shows the process jobs assigned to a selected work cell in the scheduled sequence. The job list can be further restricted by the view parameters of the job details: By restricting the number of displayed jobs, the operator is more focused on the sequence of the selected jobs.   The jobs can be selected manually or automatically in the job list. By default, the next job in the sequence gets selected when the previous job has been completed. The manual selection can be done through: Mouse Keyboard Scanner (Barcode or RFID) through the built-in scanning functionality The job details Once a job has been selected in the job list, the details of the job are shown in the lower area: The production instructions tab displays a related document or picture that contains instructions or information related to the product or process for the machine operators: Job and job status registration For each kanban, one or multiple jobs are created, dependent of how many activities a kanban is supposed to flow through. For each job, the kanban board allows the registration of the following statuses: Prepare – The water spider has picked the material and prepared the handling unit for production. Start – The production process has been started. Complete – The production process has been completed. The only mandatory registration is Complete. Prepare and Start are automatically registered with the next higher level. The registration can either be done by pressing a button or by scanning the barcode of the kanban cards. Picking list When one or multiple jobs are selected, the picking list displays the sum of material to pick for the selected jobs. The on-hand status is displayed for the picking list lines to show the availability of material. The picking list can be printed as separate document (with the consolidated view aggregated on material) or as an attachment to each kanban card. The picking list displays the material to be picked for one or multiple selected jobs with an indicator of availability. When the preparation is registered, the inventory transactions are posted for material where on-hand is tracked (but not backflushed). Registration of tracking dimensions (batch or serial numbers) or picking from special locations or pallets can be done with the “Update picking list” button or through a WMS (Warehouse Management System)   picking process. Pegging When using kanban line events to pull material to a work cell, the created kanbans are displayed in the Pegging tab. The pegging overview shows the kanbans needed for a selected jobs and the handling unit status of  the pegged kanbans. We recommend that you use withdrawal kanbans based on kanban line events for material that has to be picked up  at or transferred from remote or centralized warehouses. Information and process FastTabs on the right side On the right side of the kanban board for process jobs, a number of FastTab’s are available to display complementary data and support specific processes. When closed, the FastTabs do not consume runtime on refresh of the board, so it is recommended to close any FastTab that is not needed. When closing the board, the status of open/closed FastTabs will be remembered (in the session data) and the board will be restored with this status on the next usage. Registration When using a barcode or RFID scanner, the Registration FastTab should be opened to see the scanned kanban card IDs. Wrong or unreadable card IDs can be manually corrected or typed in. The registration is triggered with the Return or TAB key. Messages The kanban board does not display error messages in a separate Infolog window, but displays the messages in a message FastTab. To see the feedback, the message FastTab has to be open. When closing the kanban board and reopening the message, history will be deleted. Cycle time performance indicator For each production flow version, the cycle time requirements can be defined in the production flow version details. Based on these settings, the average cycle time requirement is calculated for each activity of the production flow on validation, activation, or recalculation (when parameters are changing after activation) of the version. The cycle time performance indicator displays the actual calculated cycle time for the defined cycle time period in relation to the boundaries defined in the production flow version. The cycle time performance indicator is usually applied in production environments where many small jobs are registered synchronously to production, i.e., in a single piece flow. It gives an indication to the workers and managers of a work cell on the actual performance of the cell. The cycle time performance indicator is active only if a work cell is unique to one production flow activity. For a work cell that executes activities for multiple production flows, the cycle time requirements cannot be calculated, so the control is inactive. Transfer jobs When a work cell is replenished by withdrawal kanbans or the process activity is followed with a put-away transfer job, the active transfer jobs are displayed in a grid in this FastTab. The jobs can be selected and registered as started or complete in this control. A registration mode start/complete transfer can also be set. This FastTab supports the work of a water spider dedicated to a specific work cell. The water spider can control transfer in, transfer out, and picking processes in a single UI, filtering on all transactions that are related to the selected work cell. For a machine operator, the transfer jobs FastTab should be kept closed. Kanban quantity overview – finished goods The kanban quantity overview controls give a visual indication of the on-hand, supply, and demand status of the kanban rules related to the selected work cell. The finished goods overview displays the kanban rules for products that are supplied by the work cell. For each kanban rule, all active jobs are shown, sorted by job status. Shortages can be spotted at a glance: Minimum alert quantity: If a kanban rule does not have enough completed, started, or planned kanban jobs, the background of the minimum alert quantity is turned red. If a planned kanban job is overdue, it gets a time alert symbol. The kanban rules are sorted by urgency. The most urgent kanban rule is displayed on the top of the overview. The shop floor supervisor can use the quantity overview control to plan or sequence incoming jobs based on the urgency and priorities. The water spider and machine operators can decide on the sequence of execution based on possible shortages or alerts. Kanban quantity overview – material The kanban quantity overview for material displays the kanban rules that are supplying material that is consumed by the selected work cell. The shop floor workers get an overview of the supply situation and the on-hand in the supermarkets to take priority and picking decisions: Job icon legend In the various controls of the kanban board, kanban jobs are represented with icons that reflect the job or handling unit status. Overdue or priority jobs are marked with an overlay icon. The color of the jobs represents the lean scheduling group of an item. Scheduling groups can be defined for items globally or for an item in relation to a specific work cell. Automatic refresh By setting a refresh cycle time to the kanban board, it can be ensured that even users who do not interact with the board every minute always have an accurate view of the background information, quantity overviews, and the cycle time performance. In this mode, the kanban board can be used as an Andon Board—a screen at the work cell displaying quantity overviews without expected user interaction to make the planning and execution status of the work cell visible to the team.  Remove  Right?  Right. WMS is a module of AX.  Picking is a WMS process, not sure if we need to change to “Pick up” MICROSOFT CONFIDENTIAL © 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

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