Lean Manufacturing

Lean – or “simplicity and common sense”; the whole ethos when the concepts of Just in Time, World Class Manufacturing and Lean Manufacturing came to the west they all taught us that going down this simplicity and common sense route didn’t need software. After all simple Kanban tickets and Heijunka Boards don’t need computers, yet by utilising the facilities in Dynamics AX the ability to vary Kanbans with demand, utilise real demand for forecasting and linking up the supply chain with pull commands electronically synchronised is so much simpler.

The Lean Manufacturing capabilities are new with Dynamics AX 2012, and they give you a different way of managing your manufacturing processes as compared to the traditional discrete manufacturing models of BOM’s and Routes.

If you saw Lean in AX2009 then don’t be scared by its new terminology and constructs that it uses to model the manufacturing processes. It shares a number of the processes that the traditional manufacturing models use, and is easier and simpler to configure.

But what if only part of your process is Lean? Now you don’t have to be a pure “Lean” organisation to use the Lean manufacturing processes that are built into Dynamics AX. You can pick and choose what you use, and even create hybrid manufacturing models that blend both the traditional and lean processes.

Semi Finished Products: In practicing lean manufacturing principles, AX 2012 integrates kanbans for inventoried products and semi-finished-products.

Products and material in work in process (WIP): Reduction in batch sizes in lean manufacturing practices can, in return, cause an increase of pulled items (or kanbans) in inventory transactions. In AX2012, the value of the pulled resources is automatically added to the WIP account related to the production order. Thus, when the products are posted to inventory, the WIP is deducted by the related standard cost.

Value streams and value stream mapping: In manufacturing, the term value stream mapping (VSM) has been an approved method for lean manufacturing. Inherent in Dynamics AX 2012, this tool is available and can be modeled for process activities, movements and/or transfers. Also inherent in Dynamics AX is to use the value stream as a financial dimension.

Costing for lean manufacturing based on the production flow: Lean manufacturing in Dynamics AX 2012 make costing independent of the BOM line items, which give users the ability to report consumption without reporting quantities by job. Thus, although lean manufacturing disrupts job costing system principles-due to the production order being unavailable, the production flow is what is relied on for cost accumulation. This concept is based on standard costs, and the periodic consolidation based on production flow recalculates actual cost allowing the user to determine variances (such as materials quantity variance, labor material variance, etc.).

Continuous improvement: Continuous improvement in AX2012 production flows equips users with the ability to copy an existing production flow version and model future-state before validating for production. This is due to it being implemented in time-effective versions.

Simplicity: Some argue that simplicity is the key to success-due to the ease of use and adoption by users. However, one can also debate that simplicity limits customisation, restrictions and inconsistencies. Microsoft Dynamics AX 2012 Lean Manufacturing gives users the choice to implement the production flow and activity approach to model simple and complex production scenarios in a single, scalable architecture. Thus, the AX 2012 user interface provides all tools and business complexity at the user’s fingertips.

Mixed-mode manufacturing: Lean manufacturing in Dynamics AX can be used concurrently with all supply chain, production and sourcing strategies. Scheduling for kanban execution providing pull processes throughout the supply chain.

There are many more ways Dynamics AX2012’s lean processes could help – talk to ibrl to find out how to utilise this for your organisation.

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