Lean Production Scheduling in Dynamics 365

Let’s look in some detail at production scheduling for lean manufacturing in Dynamics AX.  If you haven’t read my blog series on production scheduling supporting lean principles, I encourage you to read it first.  Building on that knowledge base, we’ll take a look at how Microsoft Dynamics AX supports these seven guidelines for designing a future state with a special emphasis on production scheduling.Blog_02.13.19

The seven lean manufacturing guidelines for the design of a future state value stream are:

1. Produce to your takt time.
2. Develop continuous flow wherever possible.
3. Use supermarkets to control production where continuous flow does not extend upstream.
4. Try to limit the customer schedule to only one production process.
5. Level the production mix by distributing the production of different products evenly over time at the pacemaker process.
6. Level the production volume by releasing small, consistent increments of work at the pacemaker.
7. Develop the ability to make “every part every day” (then every shift, then every hour, or pallet or pitch) upstream of the pacemaker process.

From Lean Enterprise Institute “Learning to See” workshop version 1.2, 1999

  1. How Microsoft Dynamics AX Can Produce to Takt Time

The truest method to produce to takt time is to make to order.  Microsoft Dynamics AX provides “event kanbans” that are driven from sales orders.  When a sales order is taken, a kanban is generated automatically, matching the quantity and due date.  That works nicely for final assembly.  An “event kanban” can also include a kanban line event so that when a kanban is created for a downstream production flow, a kanban to matching the quantity and due date is generated automatically for the subassembly required by the downstream production.  In this way, make-to-order manufacturing (MTO) is supported through multiple levels of the bill of materials (BOMs).

  1. How Microsoft Dynamics AX Can Develop Flow

A lean value stream is defined in Microsoft Dynamics AX as a production flow with multiple activities.  Each activity corresponds to a lean process.  AX allows you to build a product through multiple activities and record the product as semi-finished along the way without either having to have a level of the bill of material or receive the product into inventory.

This flexibility allows you to define your flow of multiple processes together.  You may decide to setup a U-shaped cell with multiple operator stations or create flow line with multiple work stations.  Kanbans set up for these flow situations show on the operator board as pegged requirements, allowing the operator to see the status of work coming from upstream activities.

NOTE: You must design your material flow first to support your visual factory, and only then configure AX to match that physical flow.  All of this is done by configuring standard software without any need for the IT Department to be involved.


  1. How Microsoft Dynamics AX Works With Supermarkets

Upstream from where you can flow, you must plan for intermediate inventory buffers. (In lean, we call these supermarkets.) These supermarkets ensure that downstream processes always have inventory available when needed to support customer orders.

As materials are withdrawn from the supermarket, pull signals or kanbans can be generated to build enough to replenish the supermarket to targeted stock levels.  This make-to-stock manufacturing (MTS) scenario is supported by two methods in Dynamics AX.

  1. Classic fixed kanban cards can be used to automatically replenish when inventory falls below a reorder point. Kanban cards can be pre-numbered for cards that cycle out and back quickly or can be one-time use kanban cards where a new kanban ID is assigned for each cycle to replenish.  Microsoft Dynamics AX includes kanban calculations to calculate the number of fixed cards needed based on transaction history and forecasted demand.
  2. Scheduled kanbans can be generated from MRP in a very complete integration supporting all the planning and aggregation capabilities of a full-featured MRP. Scheduled kanbans can be automatically generated to replenish stock to targeted levels.  This is more dynamic and flexible than fixed cards since kanbans are generated with the specific quantity needed.
  1. How Microsoft Dynamics AX Does Pull Scheduling at One Point

The lean principle is to schedule customer orders at one point and allow the rest of the value stream to respond with flow downstream and pull upstream.  This scheduling process can be easily designed to be implemented by Dynamics AX.  With the flow example above, the customer order generates the kanban at the first of the flow processes down the value stream.   That kanban can automatically generate subassembly kanbans for feeder areas to produce and can automatically generate withdrawal kanbans to move component inventory from stockroom to lineside locations.

A complete collection of kanbans for moving material and multiple subassemblies for feeder area production can be generated from a single customer order all automatically and all pegged to the original order.  For more complex situations where there are multiple production lines that must be balanced, MCA Connect offers a Fixed Interval Scheduling add-on for load balancing, substitutions, and configuration management.

  1. How to Level the Mix with Microsoft Dynamics AX

Leveling the mix involves distributing the work to produce different orders evenly over time.  Leveling can be done by the workers at a workcell using visual displays in Dynamics AX to see the overall loading of a workcell for the upcoming week.  Operators can then shift orders and sort like products together in order to group work together over their planning cycle.  For example, if a paint line has 3 days visibility of orders, the team leader can group work together as needed to minimize changeovers and smooth spikes and dips without compromising on-time delivery.

  1. How to Level the Volume with Microsoft Dynamics AX

Leveling the volume is to release a small increment of work on a regular schedule and monitor completion of each increment.  This is the lean concept of pitch.  As an add-on to standard Dynamics AX, MCA Connect offers a Fixed Interval Scheduling solution that supports this concept to level the volume and manage operations in short increments.  Each schedule is confirmed for both material and capacity before release.  Component substitutions are supported and as-built configurations captured.  Automatic load balancing across multiple lines supports leveling both mix and volume together for complete control of your total operations.  This supports ship-complete as well as partial shipments.

  1. How to Use EPEI to Size Upstream Supermarkets

Microsoft Dynamics AX allows you to set targeted inventory levels including safety stock by item at every location.  The MRP system will then plan to replenish to those stock levels automatically providing action messages or planned orders to help the planner identify situations where action is needed.

EPEI calculation is not done formally by Dynamics AX but the results of your EPEI are used in establishing production lead times.  MCA Connect offers the Areteium lean transformation toolkit, which has very complete calculations for EPEI for a wide range of complex manufacturing processes.  The results of the EPEI calculation from Areteium can be updated automatically back into Dynamics AX.

Obviously, there’s much more that could be said.  As you can see, Dynamics 365 implementation as a top tier ERP solution provides a very comprehensive and solid enterprise business platform to support truly lean operations.

Learn how to address the challenges of high mix, low-volume manufacturing.

Want to learn more about Areteium or MCA Connect’s Fixed Interval Scheduling solution?

Contact us to learn more about our capabilities.

Written By:  Phil Coy