Best Practices in Manufacturing D365UG/AXUG Northern ...

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Best Practices in ManufacturingD365UG/AXUG Northern California

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Agenda

Introduction and Overview 5 Minutes

Industry Thought Leaders 10 Minutes

Production Environments 15 Minutes

Leveraging the Tools 20 Minutes

Questions and Discussion 10 Minutes

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Presenter

Arbela Technologies

“Best Practices”

Introduction and Overview

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Presenter – Kurt Beers, Manufacturing Solutions Architect

HIGHLIGHTS

• Manufacturing Solutions Architect

• 20 years of ERP implementation experience.

• 10 years implementing Dynamics AX

• APICS Certified Professional (CPIM, CSCP)

SPECIALTIES

• Supply Chain and Inventory Management

• Master Planning and Production Scheduling

• Regulated Industries (FDA, FAA)

• Project Management

• Solution Design

• Integration Design

Contact: [email protected]

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Arbela Technologies

• Founded in 2002 by ERP & Supply Chain Veterans.

• Leading Microsoft Gold Certified Partner Since 2004.

• Headquartered in California with Offices in Georgia, United Kingdom, & Denmark.

• Specialize in Large, Complex, Multi-company Implementations (Multi-currency, Multi-site, Multi-language, & Shared Services).

• Extensive Industry Knowledge in Manufacturing, Distribution, Retail & Global Financial Management.

• Offer Full Dynamics AX & CRM Implementations, Upgrades, Audits & Development.

• Dynamics 365 competency – Add-on development

• Security, Compliance, & Auditing Solution for Dynamics AX 2009, 2012, D365.

• Centralized Master Data Capability & Consolidation Solution for Dynamics AX 2009 & 2012, D365.

• Extensive Manufacturing add-ons for Dynamics AX 2012 and D365.

98%Customer Retention

95%Customer

Satisfaction

100+Customers

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Best Practices - Definitions

APICS

A method or technique that consistently shows results superior to those achieved through other means, often used as a benchmark. Best Practices can be defined within an organization, within an industry , or across industries.

• Current (not emerging, not obsolete)

• Structured (goals, scope, process and procedure)

• Proven (demonstrated in a working environment with metrics)

• Repeatable (demonstrated in multiple organizations or industries)

Gartner

A group of tasks that optimizes the efficiency (cost and risk) or effectiveness (service level) of the business discipline or process to which it contributes. It must be implementable, replicable, transferable and adaptable across industries.

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Best Practices – Objectives for Manufacturers

Business Perspective

• Adhere to proven concepts and processes

• Focus on value added activities and eliminate waste

• Standardize where possible

• Innovate where there are opportunities to differentiate or add value

IT Perspective

• Follow proven implementation methodologies

• Align to the business objectives to be supported

• Leverage the application tools as designed to the greatest extent possible

• Look for opportunities to enhance, extend or integrate in order to gain efficiency or support key business initiatives

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Just In Time – Zero Inventories

Lean - Toyota Production System

Theory of Constraints

Six Sigma Process Improvement

Planning and Control Systems

Leading Industry Thoughts

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Zero Inventories - Robert Hall

“Stockless Production” – Make only what is needed, when it is needed.

Characterized by:

• Reduced Setup Times

• Small Lot Sizes

• “Pull” systems

• Quality at the source

• Product Design for Manufacturing

• Supplier Integration

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Lean Thinking – Robert Womack

Focus on Value Creation and the elimination of waste.

• Overproduction ahead of demand

• Material waiting for next process

• Unnecessary movement or transport of material

• Additional processing due to rework

• Excess Inventory beyond the required quantities

• Unnecessary time spent looking for parts or tools

• Defective Material


The Goal - Eliyahu Goldratt

Throughput analysis with a focus on those activities that limit delivery of customer orders.

• Theory of Constraints and Critical Chain

• Find your “Herbie”

• Eliminate “Sub-optimal” processes and metrics

• Drum-Buffer-Rope

• Operate at the pace of the constraining resource

• Buffer inventory ahead of the constraining resource

• Pull at each stage in the production flow


Six Sigma Process Improvement – Richard Schonberger

Focus on process discipline and consistency with a data driven approach to process improvement

Are your initiatives really resulting in increased creation of value?

• Eliminate waste in operations

• But still must adapt to customer and market factors

Example

• Increasing inventories would generally be considered “waste”

• But what of that Inventory leads to new Markets?

• Dell Example


Manufacturing Planning and Control Systems13

Business Planning

Sales and Operations Planning

Demand Management

Master Production SchedulingRough Cut Capacity

Planning

Final Assembly Schedule

Material Requirements PlanningCapacity Requirements

Planning

Adapted from Vollman, Berry and Whybark

Manufacturing Execution Processes

Resource Requirements Planning


Thought Leading Organizations

Several professional associations that serve to define, establish and promote “Best Practices” within their disciplines:

• APICS (now the Association for Supply Chain Management)

• Supply Chain Council

• Theory of Constraints International Certification Organization (TOCICO)

• Institute for Supply Management (ISM)

• Council of Supply Chain Management Professionals (CSCMP)

• American Society for Quality (ASQ)


Order and Production Strategies

The Shape of Material Flow

Lead Time Expectations

Variety and Options

Operations and Market Variables


Manufacturing Strategies – What Kind of Plant Are You?

Make To Stock – Produce before receipt of a customer order. Production to replenish inventories.

Assemble to Order – Final assembly performed upon receipt of a customer order. The Assumption is that all components and major subassemblies are produced and stocked in advance of order receipt.

Make to Order – Produce upon receipt of a customer order. Final product may be composed of standard components, or components produced specifically to meet the order requirements.

Engineer to Order – Customer order initiates a design process where new Products are defined, BOMs specified and ultimately produced.


Lead Time Considerations - Manufacturing Strategies

Design Purchase Manufacture Ship

Inventory Manufacture Ship

Manufacture Inventory Ship

MTS Delivery Lead Time

Manufacture Assemble ShipInventory

ETO Delivery Lead Time

MTO Delivery Lead Time

ATO Delivery Lead Time

Assemble

Assemble

Assemble

Engineer-to-

Order

Make-to-Order

Make-to-Stock

Source: Arnold et al., Introduction to Materials Management, 6th ed.

Assemble-to-

Order

Inventory

Variety

Volume


Product Options and the Demand for “Customization”

From Henry Ford in 1909- “A person can buy a car in any color they choose, so long as it is black.”

…To standard base models with a multitude of colors and optional features (Air Conditioning, Stereo System Selection, Transmission type, power vs manual features, etc.)

… To Dell computers – Pick your features and components and design your computer from scratch.

… To Converse and Vans shoes – Choose your color, your fabric, other materials, eyelets, soles, etc… And, they deliver it in a few days.


Plant Type Analysis - VATI

Plant types describe how materials flow through a factory. In Theory of Constraints, this is called the VATI analysis, and can help with scheduling problems. Draw the diagram from the bottom of your page to the top of your page.


Plant Type Analysis – What Kind of Plant Are You?

• V Plant (One to Many): One (or few) raw material converted into many different end items. Examples – Wood and Metal Products.

• A Plant (Many to One): Typically complex assemblies where many components and subassemblies are combined to produce a (relatively) small number of end items. Examples – Aircraft, Ships, Some Electronic goods.

• T Plant (Multiple Lines or Many to Many): One (or a small number) of general material flows can split to make many different products. Examples - Computers or any other product with configuration, size or color options.

• I Plant (One to One): Small number of inputs flow in a sequence to produce a small number of outputs. Few points of divergence in the material flow.


Postponement – Delayed Differentiation

What is the point of divergence in your product structures or material flows?

Delay the final differentiation (production, assembly, packaging, etc.) until the latest possible time without impacting customer lead time expectations.

• Reduced Risk associated with anticipation

• Reduced Finished Goods Inventory Cost

Focus is on the point of divergence in the material flow as the inventorying level.


Postponement – Company Examples

Kitchen Cabinet Maker

• Modular Design

• Wood and Hardware options available for all standard modules

• Configured to fit Kitchen space

• Make to Order (Configure to Order)

• “V” type plant



Office Furniture Manufacturer

• 20 – 30 base models

• Numerous options with in each model (including thousands of textile options)

• Quick turnaround (2 – 3 days from customer order)

• Assemble to Order (Configure to Order)

• “T” Type Plant



Brewery

• Relatively small number of branded beer, each with numerous package options for Finished Goods

• Three week fermenting cycle

• Moderate Customer lead time expectation (3 – 4 weeks)

• Long Lead times on many Raw Ingredients

• Make to Order Plant

• “T” Type Plant – Some properties of an “I” Plant



Aerospace Composites Manufacturer

• Fairly small number of critical Raw Material

• Produce an Intermediate Stage Raw Material

• Material may be cut and formed into a wide variety of end items

• Hybrid – Make to Order / Assemble to Order

• “V” Type Plant


Plant Type Analysis - VATI

Plant types describe how materials flow through a factory. In Theory of Constraints, this is called the VATI analysis, and can help with scheduling problems. Draw the diagram from the bottom of your page to the top of your page.


Configuration Technologies

Forecast Models

Master Plans

Coverage Settings

Order Settings

Planning BOMs

WMS Replenishment

Power BI

Leveraging the Tools


Mandatory Setups

• ‘Product subtype’ must be set to “Product master”

• ‘Configuration technology’ decision

• Choice of ‘Configuration technology’ affects options in ‘Product dimension group’

29


Selecting a Configuration Technology

• First question – Do you really need a configuration technology?

• Exploring the Options• Predefined variant

• Do you have products with more than four options in them?

• Dimension-based configuration• How many more than four options do your products have?

• How do configuration choices affect Production BOMs?

• How often do you add new products?

• How does your engineering/product development department function?

• Constraint-based configuration• Accommodates greatest complexity of options

• Allows attribute-based pricing

30


Why Use Configurations?

• Control – If sales is allowed to make parts at will, we can have engineering issues.

• Pricing - Attribute-based pricing supported through a configurator only.

• Discrete Part - Despite all of the variability, it's still really the same fixture. Whether it’s black or brown, has a full shield or half shield, or an 8' power cord or a 12' cord, it's still really the same thing to us.

31


Summary of the Various Contexts for Planning

• Within functional areas (Purchasing, Production, Distribution)

• Across functional areas within organizations

• Across trading partner organizations

• At strategic, tactical and execution levels

• Over long, medium and short time horizons

• Based on volume (S&OP) and mix (MPS)

• At aggregated (Family) and component (BOM) levels

32


AX Planning Fundamentals – Static and Dynamic Plans

• Static Plan - The master scheduling calculation uses the current data to generate a net requirements plan. This plan remains unchanged until the next time you run master scheduling. It is an operating plan that various company personnel, such as a purchaser or production planner, can use to base their decisions on and carry out their daily tasks and activities.

• Dynamic Plan -This plan starts out with the same net requirements plan that was generated by master scheduling. However, you can update the dynamic plan each time the master data changes. This could be when you create a new sales order, for example. This enables you to monitor the changing order network and item availability without disturbing the static plan that others are using for their work processes

33


AX Planning Fundamentals – Forecast Models and Plans

Forecast Plan - Gross Requirements plan in AX

• Long Range Material Requirements

• Long Range Capacity Requirements

Forecast Model - Identification of a specific Forecast in AX

• May be used to correlate with various versions or arrays from Demand Management System

• May be applied to Finished Good, Subassembly, Raw Material, or any combination of the three.

• Multiple Models and Sub-models may be used in Master or Forecast Plans


Master Planning Parameters – Default Plans35


Master Plan example in AX – Specify your Forecast Model36


AX Planning Fundamentals – Which Plans are you using?

Cabinet Maker –

• Static for Daily Requirements

• Dynamic for short term changes to Plan

• Forecast at Raw Material Level

Furniture Manufacturer

• Gross Requirements for long range Supplier Capacity

• Static Plan for Daily Procurement

• Dynamic Plan for short term changes (multiple times daily)

• Specific Plan for Production Scheduling – Orders Only

• Forecast at Component Part Level


AX Planning Fundamentals – Which Plans are you using?

Brewery

• Static for Raw Materials based on long range forecasts

• Dynamic for Make To Order Production – No Forecasts

• Static Plan uses forecast at Finished Good Level

Composites Manufacturer

• Gross Requirements Plan for Inter Company Supplier Capacity

• Static Plan for Daily Procurement and Production Scheduling

• Dynamic Plan for short term changes

• “Hybrid” Plan with forecasts directly on key Raw Materials


Material Planning – Managing Demand and Buffers

Assuming that we are not operating in ETO or true MTO environments, there will be some need to maintain inventory.

• Buffer vs Safety Stock

• Primary vs Contingent

• Demand Driven vs Variation Driven


Material Planning – Managing Demand and Buffers

Tools for driving component and subassembly inventory in advance of Finished Goods demand:

Planning

• Planning BOM

• Forecast for Subassemblies and Raw Materials (Consider Reduction Principle)

• Minimum Stock Levels per planning dimension (Site or Warehouse typically)

Execution

• Visual replenishment of production line locations

• OR – WMS Replenishment work for production lines


Planning BOM Example in AX41


Planning Route / Bill of Resources example in AX42


Other Considerations for Planning

Material Control

Backflushing

Batch Tracking

Serial Tracking

Expiration Dates


S&OP Master Plan example in AX44


The Power of Power BI

Improved Data Visibility is top reason for implementing ERP system.

ERP systems are optimized for transactions – not for Reporting and Analysis

Power BI provides a flexible and easy to use framework for building rich data visualizations and detailed analytics


C-level: See Your Sales Data in a Whole New Way

• Stay connected with access from almost anywhere, any device

Give sales managers the

ability to get data needed for

self-service BI like forecasts,

performance, and market

trends

Get immediate insights

across all your data through

self-service analytics

Manage sales performance and identify opportunities and trends

Click to see video

46


YTD Sales – Customer Sales Trend47


Product Analysis – Which Configuration is Selling Most?48


Weekly and Monthly - Customer Sales Trends 49


ERP

CRM

BI & Analytics

IoT

Field Service

Productivity Applications

Mobility

Azure

How we support the Microsoft Enterprise


Dynamics 365 Business Apps 3rd Party AppsProductivity

Microsoft Ecosystem

Power BI

Outlook

SharePoint

Teams

OneDrive

Skype

+

Application Platform - Common Data Service

Azure, Data & Analytics

Sales

Finance &

Operations

Customer

Service

Marketing

Field

Service

Project Service

Automation

Machine Learning

Cognitive Services

Internet of Things

Cortana

Bot Framework

SQL Data Warehouse

+ +

Purpose Built Apps

Custom Mobile Apps

with PowerApps

Compose Workflows &

Integrations with

Flow

Business Processes

Common Data

Model

+

Microsoft

AppSource

Marketplace

Other Data

Sources

LinkedIn Recruiter

& Sales Navigator


Adding Intelligence to your Dynamics Investments

Intelligence

Dashboards &

Visualizations

Information

Management

Big Data Stores Machine Learning

and Analytics

CortanaEvent HubsHDInsight

(Hadoop and

Spark)

Stream

Analytics

Data Intelligence Action

People

Automated Systems

Apps

Web

Mobile

Bots

Bot

FrameworkSQL Data

WarehouseData Catalog

Data Lake

Analytics

Data Factory Machine

LearningData Lake Store

Cognitive

Services

Power BI

Data

Sources

Apps

Sensors

and devices

Data


Build applications that understand people

SpeechVision wledgeLanguage Search

• Faces, images, emotion recognition and video intelligence

• Spoken language processing, speaker recognition, custom speech recognition

• Natural language processing, sentiment and topics analysis, spelling errors

• Complex tasks processing, knowledge exploration, intelligent recommendations

• Bing engine capabilities for Web, Autosuggest, Image, Video and News

Intelligence

Cortana

Bot

Framework

Cognitive Services


The Microsoft Graph


Arbela Agile Methodology

Agile Methodology


Arbela Agile Methodology

Analyze Design & Develop Deploy Optimize

Kick-off

Education, Scoping & BPM

Fit/Gap List

Design Workshops

Setup Workshops

Unit Testing

Data Migration C

on

fere

nce

Ro

om

Pilo

t (C

RP

)#1

Fit/Gap Feedback & Updated Scope

Co

nfe

ren

ce R

oo

m P

ilot

(CR

P)

# X

Development

Design Workshops

Setup Workshops

Unit Testing

Data Migration

Foundation, Standard CRMNo Customizations

Standard CRM, Security, ISV, Customizations for Reports, Interfaces,

Extensions, Forms & Workflows

Final Data Migration

Readiness Assessment

Go-Live

Repeat

On-Site Support

Optimization

Transition to Support

Come back for first month endAssist with re-training

Optimize environment and processes

Arbela Transition of Ownership Client

Environment Setup

Production Environment

Set Project Scope at High Level Process

Level & Kick-off Project. Compare

functionality between versions

and eliminate customizations

Readiness for Go-Live & Final Cutover

UAT

Training


Project Management & Governance

Project Management

Project Plan

Resource & Budget Management

Communication & Training Plan

Governance

Change Management Procedures

Organizational Change Management

Steering Committee

Milestone or Monthly Steering Committee meetings

Resolution of Escalations & Approvals

Overall Guidance of Client Resources, Budget & Approach

Issue Management

Risk Assessment & Management

Project Status Meetings & Reporting

Development Best Practices

Deliverable Responsibility Matrix

Change Request Created

Reviewed by PM’s

Approved for

Analysis?

Change Order Closed.

No

CR Analyzed & Estimated

Yes

Submit to PM’s

With-in PM

Approval Limit?

Sent to Steering Committee

CR ExecutedApproved?

No

Yes

No

Yes

Change ManagementProcess


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