MB-320 MICROSOFT DYNAMICS 365 FOR FINANCE & OPERATIONS, MANUFACTURING STUDY GUIDE by Dynamics Companions

CERTIFICATION EXAM STUDY GUIDE EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

This study guide contains all the exam prep content, including walkthroughs, practice exercises and sample questions following core courses that are recommended for the MB-320 certification.

M U R R AY F I F E

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING MURRAY FIFE

ISBN: 9781095304259

DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Preface What You Need for this Guide All the examples shown in this blueprint were done with the Microsoft Dynamics 365 Finance & Operations virtual machine image that was downloaded from the Lifecycle Services site. If you don't have your own installation of Microsoft Dynamics 365 Finance & Operations, you can also use the images found on the Microsoft Learning Download Center or deployed through Lifecycle Services. The following list of software from the virtual image was leveraged within this guide: Microsoft Dynamics 365 for Finance & Operations Even though all the preceding software was used during the development and testing of the recipes in this book, they may also work on earlier versions of the software with minor tweaks and adjustments and should also work on later versions without any changes.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Table of Contents Preface ...................................................................................................................................................................................................... 1 Table of Contents ................................................................................................................................................................................. 3 Exam MB-320: Microsoft Dynamics 365 for Finance and Operations, Manufacturing (beta)............................. 11 Skills Measured ........................................................................................................................................................................ 11 Course MB-320T01-A: Configure and use discrete manufacturing in Dynamics 365 for Finance and Operations ...................................................................................................................................................................................... 15 Module 1: Get Started with Production Control .............................................................................................................. 16 Get started with production control in Dynamics 365 for Finance and Operations.......................................... 17 Introduction ............................................................................................................................................................................... 17 Core concepts in production control .............................................................................................................................. 18 Understand unified manufacturing .................................................................................................................................. 23 Manufacturing principles ..................................................................................................................................................... 25 Overview of the production process and production life cycle ............................................................................ 26 Discrete manufacturing ........................................................................................................................................................ 29 Process manufacturing.......................................................................................................................................................... 29 Lean manufacturing ............................................................................................................................................................... 31 Configure production control for unified manufacturing ....................................................................................... 33 Capacity planning ................................................................................................................................................................... 36 Working time templates ....................................................................................................................................................... 36 Integration between the General ledger and the Production control modules ............................................ 43 Exercise - Define production control parameters ...................................................................................................... 50 Exercise - Create production pools .................................................................................................................................. 51 Exercise - Define ledger posting for production ........................................................................................................ 51 Exercise - Define ledger posting for resources ........................................................................................................... 53 Exercise - Configure item prices ........................................................................................................................................ 55 Exercise - Create and manage resources ....................................................................................................................... 56 Check your knowledge.......................................................................................................................................................... 57 Summary ..................................................................................................................................................................................... 58 Module 2: Get Started with Discrete Manufacturing ..................................................................................................... 59 Get started with discrete manufacturing in Dynamics 365 for Finance and Operations ................................. 60

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Introduction ............................................................................................................................................................................... 60 Discrete production life cycle ............................................................................................................................................. 61 Master planning and planned production orders ...................................................................................................... 65 Bill of materials (BOMs) ........................................................................................................................................................ 66 Working with BOM and item configurations ............................................................................................................... 75 Create a bill of materials (BOM) ........................................................................................................................................ 84 Production orders ................................................................................................................................................................... 86 Exercise - Create a simple BOM without a version .................................................................................................... 98 Exercise - Create a BOM in the BOM Designer ......................................................................................................... 100 Exercise - Create a BOM with a version........................................................................................................................ 101 Exercise - Create and process a production order ................................................................................................... 102 Check your knowledge........................................................................................................................................................ 103 Summary ................................................................................................................................................................................... 104 Module 3: Configure Discrete Manufacturing ................................................................................................................ 106 Configure discrete manufacturing in Dynamics 365 for Finance and Operations ...................................... 106 Introduction ............................................................................................................................................................................. 107 Configuring inventory dimensions in production .................................................................................................... 107 Configure product dimensions ........................................................................................................................................ 108 Configure storage dimensions ......................................................................................................................................... 108 Configure tracking dimensions........................................................................................................................................ 111 General ledger and manufacturing integration ........................................................................................................ 113 Production journals .............................................................................................................................................................. 114 Set up journal parameters ................................................................................................................................................. 115 Production costs .................................................................................................................................................................... 118 Dimension link ........................................................................................................................................................................ 121 Using production reports ................................................................................................................................................... 122 End production orders ........................................................................................................................................................ 123 Inventory posting profiles, item groups, and item model group ...................................................................... 126 Prerequisite setup in the Production control module ............................................................................................ 128 Production groups ................................................................................................................................................................ 128 Production control parameters........................................................................................................................................ 129 Production pools ................................................................................................................................................................... 136 Allocation keys ....................................................................................................................................................................... 137 www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Set up calendars and resources ....................................................................................................................................... 138 Set up working time templates........................................................................................................................................ 138 Create calendars .................................................................................................................................................................... 140 Resource capabilities ........................................................................................................................................................... 141 Resource groups .................................................................................................................................................................... 143 Create operations and operation relations ................................................................................................................. 144 Working with simultaneous operations ....................................................................................................................... 147 Setup route groups and routes ....................................................................................................................................... 148 Route versions ........................................................................................................................................................................ 150 Copy route ............................................................................................................................................................................... 150 Route networks ...................................................................................................................................................................... 151 Working with primary and secondary routes............................................................................................................. 152 Exercise - Configure operations and routes ............................................................................................................... 152 Check your knowledge........................................................................................................................................................ 153 Summary ................................................................................................................................................................................... 155 Module 4: Create and Complete Production Orders ................................................................................................... 157 [Missing] ......................................................................................................................................................................................... 158 Module 5: Work with Cost Sheeting ................................................................................................................................... 159 [Missing] ......................................................................................................................................................................................... 160 Module 6: Use Manufacturing Execution.......................................................................................................................... 161 Work with manufacturing execution in Dynamics 365 for Finance and Operations .................................. 161 Introduction to manufacturing execution ................................................................................................................... 162 Understand the manufacturing executions ................................................................................................................ 167 Identify roles in manufacturing execution .................................................................................................................. 174 Planning consideration for manufacturing execution ............................................................................................ 178 Configure manufacturing execution .............................................................................................................................. 181 Control production with manufacturing execution ................................................................................................. 183 Exercises - Manufacturing execution............................................................................................................................. 188 Check your knowledge........................................................................................................................................................ 192 Summary ................................................................................................................................................................................... 193 Module 7: Get Started with Product Configuration ...................................................................................................... 194 Get started with product configuration in Dynamics 365 for Finance and Operations ............................ 194 Introduction to product configuration ......................................................................................................................... 195 www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Understand the product configuration model .......................................................................................................... 197 Build a product configuration model ............................................................................................................................ 207 Exercise - Build and use a product configuration model ...................................................................................... 226 Check your knowledge........................................................................................................................................................ 229 Summary ................................................................................................................................................................................... 230 Course MB-320T02-A: Configure and use lean manufacturing in Dynamics 365 for Finance and Operations .................................................................................................................................................................................... 231 Module 1: Get Started with Lean Manufacturing .......................................................................................................... 232 Get started with lean manufacturing in Dynamics 365 for Finance and Operations ................................. 232 Introduction to lean manufacturing .............................................................................................................................. 232 Understand Lean concepts and terminology ............................................................................................................. 234 Check your knowledge........................................................................................................................................................ 237 Summary ................................................................................................................................................................................... 238 Module 2: Configure Lean Manufacturing ....................................................................................................................... 239 Configure lean manufacturing in Dynamics 365 for Finance and Operations .............................................. 239 Introduction to configure lean manufacturing .......................................................................................................... 240 Work cell ................................................................................................................................................................................... 240 Semi-finished products ....................................................................................................................................................... 240 Configure parameters.......................................................................................................................................................... 241 Create value streams and production flow models ................................................................................................. 242 Create production flows ..................................................................................................................................................... 248 Activities setup ....................................................................................................................................................................... 250 Exercises - Configure lean manufacturing................................................................................................................... 252 Summary ................................................................................................................................................................................... 258 Module 3: Create and Process Fixed Kanban Rules ...................................................................................................... 260 Create and process fixed Kanbans in Dynamics 365 for Finance and Operations ...................................... 260 Introduction to create and process fixed Kanbans .................................................................................................. 261 Understand Kanban boards .............................................................................................................................................. 266 Configure a fixed Kanban rule ......................................................................................................................................... 274 Process a fixed Kanban ....................................................................................................................................................... 286 Kanban quantity calculations and circulating kanbans .......................................................................................... 296 Exercise - Configure a fixed quantity Kanban rule ................................................................................................... 304 Exercise - Fixed Kanban job processing ....................................................................................................................... 305

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Check your knowledge........................................................................................................................................................ 306 Summary ................................................................................................................................................................................... 307 Module 4: Create and Process Event Kanban Rules ..................................................................................................... 308 Create and process event Kanban rules in Dynamics 365 for Finance and Operations ........................... 308 Configure event Kanban rules .......................................................................................................................................... 311 Configure sales, kanban, stock replenishment and BOM line events............................................................... 317 Exercise - Create an event Kanban from a sales order ........................................................................................... 321 Exercise - Set up a BOM line event kanban rule ....................................................................................................... 323 Check your knowledge........................................................................................................................................................ 325 Summary ................................................................................................................................................................................... 325 Module 5: Create and Process Scheduled Kanban Rules ........................................................................................... 327 Create and process scheduled Kanbans in Dynamics 365 for Finance and Operations ........................... 327 Introduction to scheduled Kanbans ............................................................................................................................... 328 Configure scheduled Kanban rules ................................................................................................................................ 332 Exercise - Scheduled Kanban rule setup ...................................................................................................................... 338 Check your knowledge........................................................................................................................................................ 340 Summary ................................................................................................................................................................................... 340 Module 6: Configure Activity-Based Subcontracting and Production Flow Costing ...................................... 342 Configure activity-based subcontracting and production flow costing in Dynamics 365 for Finance and Operations .................................................................................................................................................................................... 343 Overview of subcontracting and production flow costing ................................................................................... 343 Subcontracting capabilities ............................................................................................................................................... 345 Subcontracting a vendor .................................................................................................................................................... 345 Subcontracting service ........................................................................................................................................................ 347 Transfer activities as subcontracting activities .......................................................................................................... 350 Subcontracting as an alternate resource ..................................................................................................................... 350 Cost accounting of subcontracted services ................................................................................................................ 352 Subcontracting cost flow ................................................................................................................................................... 353 Backflush costing ................................................................................................................................................................... 354 Products and material in Work in Progress (WIP) .................................................................................................... 355 Standard cost .......................................................................................................................................................................... 356 Costing lean manufacturing.............................................................................................................................................. 358 Calculation of standard cost ............................................................................................................................................. 360

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Calculate unused quantities .............................................................................................................................................. 362 Calculation of production variances to standard cost ............................................................................................ 364 Ledger entries created from processing a production flow ................................................................................. 364 Exercise - set up a default vendor and create a purchase agreement ............................................................. 367 Exercise - Create a work cell for subcontracting....................................................................................................... 368 Exercise - Create an activity based subcontracting rule ........................................................................................ 370 Exercise - Create and schedule Kanbans for subcontracting............................................................................... 372 Exercise - process and transfer jobs .............................................................................................................................. 373 Check your knowledge........................................................................................................................................................ 373 Summary ................................................................................................................................................................................... 374 Course MB-320T03-A: Configure and use process manufacturing in Dynamics 365 for Finance and Operations .................................................................................................................................................................................... 377 Module 1: Get Started with Process Manufacturing .................................................................................................... 378 Configure process manufacturing in Dynamics 365 for Finance and Operations ............................................ 379 Introduction ............................................................................................................................................................................. 379 Process manufacturing item types ................................................................................................................................. 379 Production type setup ......................................................................................................................................................... 382 Set up packaging and batch attributes ........................................................................................................................ 382 Shelf life related setup......................................................................................................................................................... 383 Item model group, product compliance, and approved vendors ...................................................................... 384 Formulas, formula lines, and formula versions .......................................................................................................... 384 Formula features .................................................................................................................................................................... 389 Approve and activate formulas and formula versions............................................................................................ 390 Use step consumption ........................................................................................................................................................ 391 Catch weight ........................................................................................................................................................................... 392 Transaction adjustments .................................................................................................................................................... 394 Catch weight item handling policy................................................................................................................................. 395 Supported scenarios ............................................................................................................................................................ 396 Catch weight tags.................................................................................................................................................................. 399 Co-products............................................................................................................................................................................. 399 By-products ............................................................................................................................................................................. 401 Burden allocation .................................................................................................................................................................. 402 Planning Items ........................................................................................................................................................................ 403

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Configure approved vendors............................................................................................................................................ 404 Exercise - Create approved vendor list ......................................................................................................................... 405 Exercise - Create and use a partial visibility catch weight item .......................................................................... 406 Exercise - Use catch weight items .................................................................................................................................. 408 Exercise - Create co-products and by-products ....................................................................................................... 410 Exercise - Create a new formula with a version from the Released products page ................................... 413 Exercise - Copy and modify formula versions ........................................................................................................... 416 Exercise - Create and update a scalable Formula..................................................................................................... 417 Exercise - Create a percentage based formula .......................................................................................................... 419 Exercise - Create a step consumption formula ......................................................................................................... 421 Check your knowledge........................................................................................................................................................ 423 Summary ................................................................................................................................................................................... 423 Module 2: Identify and Configure Batch Attributes for Process Manufacturing............................................... 425 Identify and configure batch attributes for process manufacturing in Dynamics 365 for Finance and Operations ............................................................................................................................................................................... 425 Identify and configure batch attributes........................................................................................................................ 426 Exercise - Work with batch attributes ........................................................................................................................... 435 Check your knowledge........................................................................................................................................................ 442 Summary ................................................................................................................................................................................... 442 Module 3: Configure Commodity Pricing and Product Compliance ..................................................................... 444 Work with commodity pricing, and compliance in Dynamics 365 for Finance and Operations ................ 445 Configure commodity pricing .......................................................................................................................................... 445 Configure product compliance ........................................................................................................................................ 450 Exercise - Setup commodity pricing .............................................................................................................................. 453 Exercise - Create price data and update agreements ............................................................................................. 455 Exercise - Set up pricing calculation .............................................................................................................................. 456 Exercise - Product compliance ......................................................................................................................................... 457 Check your knowledge........................................................................................................................................................ 460 Summary ................................................................................................................................................................................... 461 Index ..................................................................................................................................................................................................... 462

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exam MB-320: Microsoft Dynamics 365 for Finance and Operations, Manufacturing Link: https://www.microsoft.com/en-us/learning/exam-MB-320.aspx Candidates for this exam are functional consultants who analyze business requirements and translates those requirements into fully realized business processes and solutions that implement industry best practices. Candidates serve as a key resource in implementing and configuring applications to meet business requirements. Candidates for this exam have a fundamental understanding of accounting principles and financial operations of businesses, customer service, field service, manufacturing, retail, and supply chain management concepts. Candidates for this exam typically specialize in one or more feature sets of Microsoft Dynamics 365 Finance and Operations, including finance, manufacturing, and supply chain management. Candidates must have knowledge of basic accounting principles and practices.

Skills Measured Set up and configure manufacturing (30-35%) Implement and test the production control module •

identify components of unified manufacturing

•

validate the interconnectivity between General ledger and the Production control modules

•

implement parameters, production orders, and life cycle

•

implement and manage subcontractors

•

configure and manage costing sheets

•

implement and manage work calendars

•

configure inventory dimensions in production

•

implement and manage resources

•

create and manage operations and routes

Configure and manage a product configuration model •

build a product configuration model www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

•

create and manage products

•

configure and manage constraints

•

describe the purpose and capabilities of the product configuration models

Create and manage production and lean orders (25-30%) Create common components of production and lean orders •

create and configure catch weight items

•

create production flows

•

create and manage Kanbans

•

create and manage formulas

•

create and process batch, production, and lean orders

•

set up and maintain commodity pricing

•

apply product compliance standards

•

identify items and substitute items within a bill of material (BOM) or formula

Manage scheduling and subcontracting •

perform processes to manage scrap and waste of a discrete order

•

implement production scheduling and subcontracting

•

implement activity-based subcontracting

•

create and maintain project items and item tasks

Create, process, and manage production batch orders (40-45%) Perform production batch order lifecycle •

process production batch orders

•

implement containerized packaging

•

implement and configure rebates

•

implement lot and batch control processes

•

create planned production batch orders by using the Master planning module

•

perform processes to manage scrap and waste of a batch order

•

perform a batch rework

•

configure batch reservations and expiration dates

•

identify and configure batch attributes for processes

•

integrate manufacturing processes with warehouse management system (WMS)

Manage and maintain formulas

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

•

create and manage co-products and by-products

•

create and manage planning items

•

create and manage formulas with scalable and percentage-based calculations

•

create and manage formulas with co-products, by-products, and planning items

Configure and manage manufacturing executions •

identify the capabilities and limitations of the manufacturing executions module

•

identify the responsibilities of the security role managing the production processes

•

process production orders

•

process lean orders by using Kanban boards

•

identify the process workflows for managing a production environment

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Course MB-320T01-A: Configure and use discrete manufacturing in Dynamics 365 for Finance and Operations Link: https://www.microsoft.com/en-us/learning/course.aspx?cid=MB-320T01 Organizations use Dynamics 365 for Finance and Operations to run smarter with connected operations, by selecting best-fit manufacturing processes, improving operational procedures, simplifying resource management, accelerating product delivery, and increasing quality and customer satisfaction. This course discusses how to configure and use discrete manufacturing in Dynamics 365 for Finance and Operations.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Module 1: Get Started with Production Control This module explains the concepts used in the Production control module in Finance and Operations. Lessons •

Introduction

•

Compare discrete, lean and process manufacturing

•

Configure production control for unified manufacturing

•

Understand capacity planning

•

General ledger and production control module

•

Practice labs

•

Summary

In this module you learned about: •

Discrete, lean, and process manufacturing methodologies

•

Unified manufacturing

•

How to configure production control for unified manufacturing

•

Capacity planning

•

Interconnectivity between the General ledger and the Production control modules

•

Production pools

•

How to work with allocation keys

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Get started with production control in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/ The life cycle of production of products begins with the creation of the production order, batch order, or kanban. It ends with a finished, manufactured item that is ready for either a customer or another phase of production. Each step in the life cycle requires different kinds of information to complete the process. As each step is completed, the production order, batch order, or kanban shows a change in the production status. Different types of products require different manufacturing processes. In this module, you will learn about: •

Discrete, lean, and process manufacturing methodologies

•

Unified manufacturing

•

How to configure production control for unified manufacturing

•

Capacity planning

•

Integration between the General ledger and the Production control modules

•

Production pools

•

How to work with allocation keys

Introduction Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/1_get-started-production-control-intro This module explains the concepts used in the Production control module in Finance and Operations. In this module you will learn about: •

Discrete, lean, and process manufacturing methodologies

•

Unified manufacturing

•

How to configure production control for unified manufacturing

•

Capacity planning

•

Interconnectivity between the General ledger and the Production control modules

•

Production pools

•

How to work with allocation keys

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Core concepts in production control Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/2-core-concepts-production-control Even though each company’s manufacturing processes are unique, depending on the nature of the production environment, the core conceptual elements that are used in the Production control module are frequently very similar. The core concepts in the Production control module are as follows: •

Calendars

•

Resource types

•

Resources

•

Resource capabilities

•

Routes and operations

•

Bill of materials (BOM)

•

Formula

•

Value streams

•

Production flow models

•

Production units

•

Production groups

•

Production pools

•

Allocation keys

•

Kanban functionality

Resources Resources are the company’s total working resources. It is anything that is used for the creation, production or delivery of a good/service over and beyond the materials consumed in the process. Resources can be of different types including machines, tools, people, vendors or locations.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Bill of materials (BOM) The BOM is one of the most important documents in a manufacturing company. Before a company can produce a product, it must know what components are to be included and how many of these components are needed to make the end-product. The BOM contains all the ingredients, components, parts, or raw materials required to make one finished product.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Routes and operations The route determines the process steps that are needed to produce a finished product. The BOM defines the materials required, the resource defines where the item is produced, and the route determines the sequence of events to build the finished product. Operations are the tasks or work processes that are put together with a route to produce a specific product. Each task is associated with a time allotment to complete the individual task.

Resource types Resources are created in the Organization administration module. They are used in production along with the calendar to manage the overall capacity of a company's equipment and resources. Each resource can be associated with a resource group. There can be one or multiple resources in any given resource group. The following resource types are available in Finance and Operations: •

Vendor - Use this type when an operation (or task) is performed by an outside resource or subcontractor. A vendor number can be associated with this kind of resource to help with scheduling and tracking.

•

Human resource - Use this type to define when personnel or a group of employees conduct an operation.

•

Machine - Use this type to tie an individual machine or group of machines with a resource. It is the most frequently used type of resource.

•

Tool - Use this type to control and schedule the reservations of a tool. Use this type only when capacity is limited.

•

Location - Use this type to control and schedule the reservations of a specific location.

•

Facility - A building or fixed structure that is required to perform an activity.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Resource capabilities Capabilities are assigned to an operation’s resource. A resource can have more than one capability assigned to it, and a capability may be assigned to more than one resource. Capabilities can also be assigned to resources on a temporary basis by defining a start date and expiration date on the capability assignment.

Capabilities that have expired on a resource will prevent the resource being scheduled for production if the production requires that capability. A capability that has expired can be subsequently renewed.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

When defining resource requirements for a production route, you can specify one or more capabilities as requirements. When production scheduling is performed, the capabilities defined in the resource requirements on the route operation are matched with the capabilities defined for the resources. The resources with capabilities that satisfy the requirements are then selected. When defining capabilities for different resources, capabilities should be set up so that significantly different processing speeds are set up as different capabilities

Define optional settings Companies can also set up optional settings that control the production process if these are relevant to their production environments. The optional settings are as follows: •

Production groups - Set up production groups to establish relationships between the production order and ledger accounts. The ledger accounts will be used to post or to group orders for reporting.

•

Production pools - Create production pools to group production orders for processing urgent production orders or for deleting and posting groups of orders.

•

Properties - Define properties to create special attributes that you can assign to your resources for use in the scheduling process. These attributes are connected to the working time template.

•

Resource capabilities - Create resource capabilities in case that resources need to perform the various operations in the route can be expressed as the set of resource capabilities. This allows the allocation of resources to be deferred until production is scheduled.

Production control integration with other modules in Finance and Operations The Production control module is integrated with the following modules in Finance and Operations: •

Inventory management

•

Warehouse management

•

General ledger

•

Master planning

•

Organization administration

•

Project accounting

•

Product information management

This integration supports the information flow that is needed to complete the manufacturing of a finished item. The production of items follows a sequential production life cycle. The life cycle reflects the actual steps taken to manufacture an item. It begins with the creation of a production order and ends with a finished, manufactured item that is ready for the customer.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Each step in the life cycle requires different kinds of information. When a step in the life cycle is completed, the production order signals this by a change in the production status. If one or more of the mandatory steps (or updates) are skipped, the steps are performed automatically before the production order is moved to the next step.

Production life cycle and statuses The production order is assigned a status that reflects where it is in the production life cycle. The status of the orders is as follows: •

Create

•

Estimate

•

Schedule

•

Released

•

Start

•

Report as finished

•

End

Understand unified manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/3-understand-unified-manufacturing Different products and production topologies require the application of different order types. Finance and Operations can apply the various order types in a mixed mode. In other words, all order types can occur during the end-to-end process of producing one finished product. •

Production order – This is the classic order type to produce a specific product or product variant in a given quantity on a specific date. Production orders are based on bills of materials (BOMs) and routes.

•

Batch order – This order type is used for process industries and discrete processes where the manufacturing conversion is based on a formula, or where co-products and by-products can be end products, either in addition to or instead of the main product. Batch orders use Formulas and routes.

•

Kanban – Kanbans are used to signal repetitive lean manufacturing processes that are based on production flows, kanban rules, and BOMs.

•

Project – A manufacturing project combines products and services with a given schedule and budget. The manufacturing part of a project can be delivered through either discrete or process manufacturing but not lean (kanban).

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Combine discrete, process, and lean sourcing In unified planning, you can model your supply chain based on the material flow. Finance and Operations makes sure that the material flow follows your models, regardless of the supply policy that is selected (kanbans, production orders, purchase orders, batch orders, or transfer orders). You can select your overall strategy for supplying a product, regardless of the product structure. For example, you can have kanban control in the assembly, where materials are sourced for the assembly area by production orders, kanbans, transfers, batch orders, or any combination that is appropriate for the characteristics of your supply chain, but you can still have full visibility across supplies. This capability leads to optimized supply chain processes and enhanced visibility into your supply chain. The granularity of the supply policies that are used in master scheduling depends on the storage dimensions that are enabled as coverage dimensions. To enable master scheduling to control the replenishment and supply of different types of locations (for example, by separating the production floor for different production units, or by separating different types of material and finished goods warehouses), we recommend that you enable Site and Warehouse as coverage dimensions. If Warehouse is omitted as a coverage dimension and you use Advanced warehouse management in Finance and Operations, all movements inside a warehouse are controlled by warehouse work, whereas all movements across warehouses can be controlled by withdrawal kanbans.

Unified manufacturing supply policies Unified planning in Finance and Operations controls how a product is supplied and, based on the supply, how derived requirements (consumption of items from a bill of materials (BOM)) are issued. Based on the order type, the system automatically sources materials to match the requirements. Supply policies can be defined at the product level or at any granularity that supports your requirements. You define the granularity of supply policies on the Default order settings page. Supply policies can be controlled by product, item dimensions (configuration, color, and size), site, and warehouse. This setup is done on the Item coverage page. The default order type controls what order master planning generates. Regardless of how the supply chain is modeled, Finance and Operations supports your mix of supply policies. You can have production orders that are sourced from kanbans. Alternatively, you can have a batch order that requires a product that is supplied by transfers or by kanbans. Finance and Operations makes sure that the material flow follows the model. The warehouse for picking material is assigned dynamically at run time, after the supply policy has been defined. Typically, kanbans are not created for future dates, because a kanban has a short life cycle. To maintain full visibility into the supply chain, there is a planning concept of a “planned kanban,” which is used to calculate derived requirements and helps guarantee that the requirements are sourced based on the same logic that is used when the actual kanban is created.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

The same logic is present for all other supply policy types. Therefore, long-term materials planning is based on the same logic that you expect to run with the actual orders after production and supply are approved.

Materials allocation cross-supply policy – Resource consumption on BOMs When the Resource consumption field on a BOM line is selected, the warehouse is found from the resource that is used by the operation that is set up to consume the material. In this case, the picking warehouse is found through the route, by locating the warehouse that is assigned to the production unit that the resource belongs to. Resource consumption enables a warehouse for picking materials to be selected dynamically, based on the supply policy (order type), and makes maintenance of base data easier. Resource consumption requires that the warehouse that materials are picked from be assigned based on the way that the product is supplied. In other words, at run time, the system finds the resources that should be used for manufacturing. Based on those resources, the system then finds the picking warehouse. For work that is independent of a supply policy, you don't have to change information on the BOM if the supply is changed. For ad-hoc changes, Finance and Operations makes sure that materials are sourced from the right warehouse. For full flexibility in unified manufacturing (mixed mode), we recommend that you use production type BOMs for all products. You can then use production orders, kanbans, transfer orders, or purchase orders to supply a product. For process manufacturing, you must use a production type of Formula, Co-product, By-product, or Planning item. Kanbans and production orders can't be used for these production types.

Manufacturing principles Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/4-manufacturing-principles To select the manufacturing principle that best applies to a product and related market, you must consider the requirements of production and logistics, and customer expectations about delivery lead times. Here is an overview of manufacturing principles: •

Make to stock - This is the classic manufacturing principle, where products are produced for stock, based on forecast or minimum stock refill (the latter is typically calculated based on forecast or historic consumption).

•

Make to order - Standard products are made to order or finished to order. Although preproduction might be done by using the make to stock principle, expensive steps of the value chain, or steps that create variants, are triggered by a sales order or transfer order.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

•

Configure to order – Similar to the make to order principle, the final operations of the value chain are made to order. The actual product variant that is produced isn't predefined but is created at the time of order entry, based on the configuration model of the sales product. The configure to order principle requires a certain level of process unification for a given product line.

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Engineer to order - Engineer to order processes are typically addressed by a project and usually start with the engineering phase. During the engineering phase, the actual products that are required to fulfill the order are designed and described. Production orders, batch orders, or kanbans can then be created to produce the products.

Overview of the production process and production life cycle Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/5-overview-prod-process-life-cycle The creation of a production order is essentially a request to start the manufacturing of the quantity of items specified on the order. All information associated with the item that is to be produced is contained in the production order. Production orders contain either a list of raw materials from the BOM, or a formula which may contain co-products and by-products, the resources that will be used, the routes, and the operations. Each component of information in a production order can be modified, copied, and used to meet the requirements of the manufacturing facility. Whether the company produces items that are made to order, made to stock, or engineered to order, the Production control module enables the manufacturing facility to change production orders so that they are streamlined to their specific production requirements.

Overview of the production life cycle The following steps in the production life cycle can occur for all order types of mixed mode manufacturing. However, not all of them are represented as an explicit order status. •

Created – You can create a production order, batch order, or kanban manually, or you can configure the system to generate them based on various demand signals. Master planning creates production orders, batch orders, or kanbans by firming planned orders. Other demand signals are sales orders or pegged supply signals from other production orders or kanbans. For fixed quantity kanbans, demand signals are generated when kanbans are registered as empty.

•

Estimated – You can calculate estimates for material and resource consumption. The estimation generates inventory transactions for raw materials that have a status of On order and material demand. The receipts for main products, co-products, and by-products are generate when production orders or batch orders are estimated. If the BOM contains lines of the Pegged supply type, purchase orders for materials or subcontracted operation services are generated and pegged to the production order or batch order. Items or orders are reserved according to the

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

reservation strategy of the production order, and the price of the finished goods is calculated based on parameter settings. •

•

Scheduled – You can schedule production based on operations, individual jobs, or both. o

Operations scheduling – This scheduling method provides a rough, long-term plan. By using this method, you can assign start and end dates to production orders. If the production orders are attached to route operations, you can assign them to cost center groups.

Job scheduling – This scheduling method provides a detailed plan. Each operation is broken down into individual jobs that have specific dates, times, and assigned operations resources. If finite capacity is used, jobs are assigned to operations resources based on availability. You can view and change the schedule in a Gantt chart.

Kanban schedule – Kanban jobs are scheduled on the Kanban schedule board or automatically scheduled based on the automatic planning configuration of the kanban rules.

Released – You can release the production order or batch order when the schedule is finished, and the material is available to be picked or prepared. The material availability check helps the shop floor supervisor assess the availability of material for the production orders or batch orders. You can also print the production order documents, such as the pick lists, job card, route card, and route job. When the production order is released, the status of the order changes to indicate that the production can begin. o

When warehouse management is used, release of the production order or batch order releases the production BOM lines to warehouse management. However, you can decouple warehouse release from production order release by using parameters. Warehouse waves and warehouse work are then generated according to the setup of the warehouse.

•

Prepared/Picked – When all materials and resources have been staged at the production location, the production BOM lines or kanban lines are updated to a status of Picked. However, you can configure the warehouse parameter to have the lines be updated to Reserved physical instead of Picked. Pegged supply orders and related warehouse work are typically completed at this stage. The kanban cards or job cards that are required to report production progress should be assigned and printed.

•

Started – When a production order, batch order, or kanban is started, you can report material and resource consumption against the order. However, for kanban it always happens automatically. Therefore, there is no manual posting of materials for lean manufacturing. The system can be configured to automatically post the material and resource consumption that are allocated to the order when the order is started. This allocation is known as preflushing, forward flushing, or auto consumption. o

You can manually allocate materials to production orders or batch orders by creating additional picking list journals. You can also manually allocate labor and other route costs to the order. If you're using operations scheduling, you can allocate these costs by creating a route card journal. If you're using job scheduling, you can allocate the costs by

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

creating a job card journal. Production orders or batch orders can be started in batches of the requested final quantity. Within a production order, batch order, or kanban, the jobs that are created can be started and reported separately through journals, the manufacturing execution system terminal (MES Terminal), or kanban boards. •

Report progress/Complete jobs – Use the manufacturing execution system (MES) terminal, production journals, kanban boards, or mobile scanning capabilities to report the production progress by job or resource. Material and resource consumption will be posted, and the status of the related kanbans, production orders, and batch orders might be updated to Received or Reported as finished. Put-away work for the warehouse might be created, depending on the warehouse configuration.

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Reported as finished (the product receipt) – When a production order or batch order is reported as finished, the quantity of the finished goods that were completed is updated in inventory. This quantity includes the quantity of relevant co-products and by-products. If you're using work-in-process (WIP) accounting, a ledger journal is generated to reduce the WIP accounts and increase the inventory of the finished goods. When the cost of a production order is calculated, the actual cost of the production is posted. If the material and labor costs that are associated with a production aren't already allocated in a journal or by preflushing, they can be automatically allocated through back-flushing. Allocation through back-flushing involves the post-deducting of inventory transaction processes. If the production order is completed, select the End job check box to change the remaining status to Ended. Otherwise, leave the field empty to enable reporting of additional quantities that are produced.

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Quality assessment – A product receipt can trigger the creation of quality orders, depending on the configuration of test processes and the quality rules that are established for specific products. Because a quality order can update the inventory status or the batch attributes of the tested products, quality assessment is a mandatory process in many industries.

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Put away and Ship to order – After product receipt and quality assessment, optional put-away work directs the received products to the next point of consumption, to a finished goods warehouse, or to a shipment zone if there are ship-to-order requirements.

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Ended – Before a production order is ended, actual costs are calculated for the quantity that was produced. All estimated costs of material, labor, and overhead are reversed and replaced with actual costs. If you select the End job check box when you run the cost calculation, the production order status changes to Ended. This status prevents any additional costs from being posted to a completed production order.

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Period closure – Some cost accounting principles, such as periodic average, back-flush costing, FIFO (first in, first out), or LIFO (last in, first out), require periodic activities to close the inventory or financial period. Typically, the system tries to report all material and resource consumption, and corrections of inventory and scrap, before the periods are closed. This reporting is typically done by using inventory movement journals or adjustment journals. The goal is to assess the economic performance of operating units per period. In some cases, when long-running production orders are used that span the financial reporting periods, production journals are used to report the production progress and resource consumption by the end of the period.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Discrete manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/6-discrete-manufacturing The following are characteristics of discrete manufacturing: •

Order-based production (production in individual production orders)

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Product changes frequently

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Varying sequence of work centers (complex routings)

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Semi-finished products often put into interim storage

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Components staged with reference to order

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Status processing

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Completion confirmation (backflush) for individual operations or orders

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Order-based cost accounting

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Builds, assembles, produces in low volume with high complexity or high volume of low complexity

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Makes “things”

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Raw materials are most often measured in pieces

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Are usually scaled for an output of one (1)

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Only have one product output

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Waste can only be accounted for on raw material lines

Process manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/7-process-manufacturing Process manufacturing in Finance and Operations provides integrated functionality for planning, managing and distributing in process manufacturing. The following are characteristics of process manufacturing: •

Uses a formula, or “recipe”

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Blends products together in a “batch”

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Builds something that cannot be taken apart

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Can’t tell one product from another

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Product cannot be reversed

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Involves variable ingredients

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Co-products and by-products

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

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Minimal interruptions

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Make products in bulk quantities, such as paints, pharmaceuticals, beverages, and food products

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Raw material ingredients in formulas are often measured by weight or volume instead of pieces

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Will usually have one or more standard sizes (batch sizes) that are scaled for a quantity greater than one.

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May have one or more product outputs

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Waste/loss can be accounted for as yield which is the ratio between output and input.

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Supports a wide range of processes, including make to order (MTO), make to stock (MTS), in mixed mode, and hybrid environments.

Some of the key requirements of process manufacturing include: •

Formula management.

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Co-product and by-product planning and management including allocating cost for unplanned co-products and by-products.

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Containerized packaging.

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Batch order management, including consolidating batch orders for packed products with similar packed products and a parent bulk item.

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Full visibility and partial visibility catch weight functionality.

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Batch attribute assignment, search, and reserve capability.

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Inventory batch management.

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First expiry, first out (FEFO) and shelf life inventory management to set vendor-specific batch information.

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Commodity pricing functionality.

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Rebate and trade promotion capability

Process manufacturing can be used by companies who want to automate their distribution processes for products that are usually manufactured in a batch or semi-continuous processing environment. Features of process manufacturing for these group of companies include the following: •

Distributors of processed goods can forecast and plan the supply and demand.

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Procurement and sales can be managed in a dual unit of measurement.

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Short and long shelf life and stringent quality standards can be maintained for inventory batches of natural and consumer packaged products, such as pasteurized milk, paint production and mixing, and so on.

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Process manufacturing can also be used by companies that want to automate their batch or semicontinuous manufacturing processes. Manufacturers of processed goods can quickly define complex formulas to accurately control production costs and they can more easily switch between make or buy decisions with agility.

Key features of process manufacturing for these group of companies include the following:

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

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Retention of complex formulas

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Manage shelf life products

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Manage commodity pricing

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Manage product compliance

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Setup and apply complex rebates

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Advanced lot tracking and control

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Enhanced cost management of multiple outputs

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Procure, store and sell products in dual units of measure

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Manage production for assembly or disassembly for single or dual units of measure

Lean manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/8-lean-manufacturing The following are the characteristics of Lean manufacturing: •

Waste minimization without sacrificing productivity

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Takes into consideration waste created through overburden and waste created through unevenness in work loads

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Emphasizes what adds value and reducing everything that does not add value

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Derived from the Toyota production system

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Known for its focus on the original Toyota seven wastes

In their fundamental work for Lean, Womack and Jones defined the five Lean principles: •

Customer value

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Identify the value stream

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Flow

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Pull

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Perfection

Identifying value When identifying the value, you would specify what creates value from the customer's perspective. •

The customer defines the value of product in a Lean supply chain.

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Value-adding activities transform the product closer to what the customer wants.

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An activity that does not add value is considered to be waste.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Understanding the value stream The value stream is the sequence of processes from raw material to final customer that creates value, or from product concept to market launch. The value stream can include the complete supply chain. Value stream mapping is an important tool to help model the Lean transformation.

Creating flow Create the value process flow wherever possible in the process. You can use one-piece flow by linking all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste. The waiting time of work in progress between processes is eliminated; hence, adding value more quickly.

Pull Pull is the response to the customer’s rate of demand; so the actual customer demand that drives the supply chain. Or, in other words, make only what is needed by the customer (short term response to the customer’s rate of demand). With a pull concept, based on a supply chain view from downstream to upstream activities, nothing is produced by the upstream supplier until the downstream customer signals a need.

Striving for perfection The last Lean principle is to strive for perfection. In striving for perfection, Lean is a journey of continuous improvement. The goal is to produce exactly what the customer wants, exactly when the customer wants, economically. Perfection is an aspiration, anything and everything can be improved.

Value stream The objectives of the Lean enterprise are to correctly specify value to the ultimate customer, and to analyze and focus the value stream so that it does everything from product development and production to sales and service in a way that actions that do not create value are removed and actions that do create value proceed in a continuous flow as pulled by the customer.

Lean terminology There are ten basic Lean core elements: •

Value Stream - A value stream is the processes of creating, producing and delivering a good or service to the market.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

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Kaizen - Japanese for "continuous improvement." Kaizen is a management philosophy emphasizing employee participation, where every process is continuously evaluated and reevaluated to eliminate waste.

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(Work) Cell - A (work) cell is a manufacturing or service unit consisting of several workstations and the materials transport mechanisms and storage buffers that interconnect them. A work cell is a resource group, where resources are grouped to execute a process flow. The work cell represents the effective capability of all resources assigned to the cell. It is handled as a black box, meaning that the internal structure of the cell is not documented in the system.

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Cycle time - The cycle time of a product refers to the time between completion of two discrete units of production.

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Takt time - Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of any Lean production system. It is computed as the available production time divided by the rate of customer demand.

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Supermarket - Supermarket areas should be grouped together to enable the material handler to visit on his or her regular routes. It is called a supermarket because that is where the material handler “goes shopping” for parts

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Production flow - The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow.

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Backflush costing - Backflush costing omits recording some or all of the journal entries that relate to the stages from the purchase of direct materials to the sale of finished goods. Since some stages are omitted, the journal entries for a subsequent stage use normal or standard costs to work backward to “flush out” the costs in the cycle for which journal entries were not made.

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Kanban - Japanese for “visible record.” Kanbans have been adopted by many industries as a method of controlling production and internal supply. A kanban can apply to a paper ticket or a physical container.

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Heijunka leveling - A production leveling technique using either volume or product mix. In Finance and Operations, the Kanban schedule board is designed to be used as a Heijunka board to level production load on a cell

Configure production control for unified manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/9-configure-production-control-unified-manufacturing Before starting, production parameters and journal names must be set up in the Production control module. •

Parameters - Set up basic production parameters to define how the application must handle and process production orders. Define how they are created, estimated, scheduled, and consumed. You can also select what kind of feedback you want and how cost accounting must be conducted.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Journal names - Identify the production journal names that you want to use to record and post ongoing transactions.

Production order journals record the different item transactions that occur when you work with production orders. These item transactions have a direct effect on a company's financial records. When you post a production journal, all item transactions are automatically transferred to the general ledger. The General ledger module is the centralized location for financial data and information in Finance and Operations. There are four types of production journals in Finance and Operations: •

Picking list – Issue raw materials to the WIP.

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Route card – Report labor as totals.

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Job card – Report labor as details with start and stop times.

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Report as finished – Receive finished goods into inventory and report good and bad quantities.

There are also several components of journal headers to consider: •

Journal (header): o

•

Type – Controls the type of journal

Name – Controls the voucher, number, and behavior

Journal lines have several distinct features.

Number – Provides a unique identifier o o o o

Journal lines can differ by journal type. They are used to record materials and quantities. They are used to record operations and time spent. They are used to record good and bad quantities.

Besides setting up the production control parameters at the company level, you can also configure the production control parameters uniquely by site. If a site does not specifically have parameters assigned to it, Finance and Operations uses the company configured parameters for that site.

Allocation keys If an employee starts more than one job in the Job registration page, it is referred to as a bundle. Allocation keys are used to define how bundled job registrations work within a specific area. Allocation keys are used to define which bundled jobs or bundled registrations within a specific area. The time spent on bundled jobs can be allocated to the individual jobs in different ways by using those allocation keys. Allocation keys consists of the following components: •

Sites

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Production units www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

Resources

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Resource types

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Bundle type

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

If you bundle jobs, you must define the total registered time for all jobs that would be allocated for each job. If you bundle jobs, you must define how the total registered time for all the jobs should be allocated to each job. You can define the allocation by selecting one of the following options in the Bundle type field in the Allocation keys page: •

Estimation – Time is divided between the jobs based on the estimated time for the jobs.

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Jobs – Time is divided according to total jobs bundled and how much time was spent finishing all the jobs.

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Net time – Time is divided equally between the jobs that are in the bundle at any time.

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Real time – Actual job time is allocated. The cost can be calculated based on the actual payroll cost.

Production pools Production pools group production orders into categories with shared characteristics. A production order can be assigned it to a production pool. When you create a production order, you can assign it to a specific production pool. You can also assign a production pool to a default posting profile to define a method that is used to post transactions to the orders for the pool. Here are a few examples of scenarios where production pools can be used to group: •

Orders that are ready to be produced

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Subcontracted orders that are missing deliveries

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Regular productions

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Orders that are missing materials

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Orders that are delayed because of machine failure

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Orders that are ready for release, start, or scheduling

Example 1 You can group subcontracted orders that are missing deliveries, production runs, orders that are missing materials, orders that are delayed because of some kind of machine failure, or orders that are ready for release, start, or for scheduling.

Example 2 You can create production pools for orders that are top priority or that have one production status. You can also assign a production pool to a default posting profile to define the method that is used to post transactions for the orders in the pool. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Example 3 A production pool can be used if you want to assign people who are specifically skilled for an operation of a production order, the people who can get the job done in difficult situations.

Capacity planning Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/10-capacity-planning Calendars and resources must be set up in the Organization administration module prior to using the Production control module. Resources are the physical equipment (more generally referred to as the resources) that are used to create finished items. Because capacity on resources is limited, the time that the resources are available (their working times) must be also being considered when assessing the amount of time it will take to complete the item. This unit explains the capacity planning in manufacturing. The process of setting up resources and working time calendars in Finance and Operations is sequential as follows: 1.

Create working time templates

Create working time calendars

Create capabilities

Create resources

Create resource groups

Working time templates The first step in the process of setting up resources and calendars for use in the Production control module is to set up the working time templates. Working time templates are defined in the Working time template page, located by clicking Organization administration > Setup > Calendars > Working time templates. You can use this page to set up templates that reflect normal working times in your company. This can be a 24-hour production sequence in which the resources are machines, or a work week of 9 to 5 for the Purchasing department, where the resources are employees.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

The templates will help you to create and manage working time calendars for your resources. Working time calendars use the work times you define in this template. For example, one period may equal to the time that the work day officially begins to the lunch break, and the time from the end of lunch to the official end of the work day may be another period. This is completed for each day that the Legal entity is in operation. The scheduled hours are copied to the working time calendar. Specify the normal or most used hours of operation. You can use the From field to specify the time the work period begins, and the To field, to specify the time the work period ends. You can also use the Efficiency and Property fields to further define the use of each of the time periods you set up. Efficiency You can use the Efficiency field to specify the efficiency percentage to be used in scheduling for the period in question, where: Scheduling time = Time * 100/Efficiency percentage.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

For example, if the evening shift operates at an efficiency level of 75 percent (versus the day shift, which operates at 90 percent), you can note this here. The effects of these rates are factored into the available capacity on the resources, and throughout the system. Properties You can use the Properties field to assign properties to your templates. Properties are used in the scheduling and structuring of production. The idea is that productions sharing the same properties can be produced simultaneously. Properties are used by resources to help optimize production schedules and are set up in the Properties page. This is often useful to set up properties on your calendars for use in setting up properties on resources. Creating resource properties Resource properties are attributes that you can assign to your resources for use in the scheduling process. Properties are tied directly to the working time template. For example, if you assign the property red to a paint machine on Monday, when you run the schedule, this resource will paint items red only on Mondays. Resource properties are not required when you set up working times calendars. However, if you want to use properties, it is more efficient to set them up at the same time.

Calendars The second step in the process of setting up calendars and resources is to create the calendar. Calendars must be set up before you create resource groups. This is because when you go about creating a resource group or a resource, you will have to specify which calendar it should be used. In this sense, calendars serve as the basis for calculating the capacity of the individual resources. Use the Calendars page to create one or more calendars to manage the working hours used in resources and resource groups. If you create more than one calendar, it is best to create a base calendar first. Go to Organization administration > Setup > Calendars > Calendars.

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If you edit the base calendar, the changes are reflected in all other calendars that you create. However, if you make changes to individual working time calendars, the changes are not updated in the base calendar. The Base calendar field defines that the current calendar inherits from the defined base calendar or possible base calendar. When changes to the calendar are updated, the current calendar inherits operation times from the base calendar. However, the operation times template defined for the update controls the update. You can deselect the base calendar when you update operation times. The Standard work day in hours is only required for Lean manufacturing. Once a calendar record is created, you can configure the working times by clicking the Working times button. Composing working times The Working times page is used to contain a record for each calendar day of the year. You can define working times by entering times individually or by copying the information in the calendar and making relevant changes. Enter the typical work days and times used in your production, and any consistent variations to these times such as holidays or weekends. You can use the Compose working times button in the Working times page to specify which calendar to use to create the working times, and define the period of time for which the calendar is to be updated, or, you can select an already defined working time template. When both the calendars and the resources groups are set up, they can be associated with each other. This is done by selecting the appropriate resource group in the Calendars tab of the Resource groups page.

Resource capabilities The third step in the process is to create the resource capabilities which describe what resources can do. When designing a route, the requirements that resources need to perform the various operations in the route can be expressed as the set of resource capabilities. This allows the allocation of resources to be deferred until production is scheduled. •

Capabilities - A capability is the ability of a resource to perform a given activity relevant to production. Capabilities are assigned to an operations resource. A resource can have more than one capability assigned to it, and a capability may be assigned to more than one resource. Capabilities can also be assigned to resources on a temporary basis by defining a start date and expiration date on the capability assignment. Capabilities that have expired on a resource will prevent the resource being scheduled for production if the production requires that capability. A capability that has expired can be later renewed. Also, a capability can be assigned to any type of resource.

•

Skills - In the Skills page, you can create and manage competencies that you will specify for employees or jobs. An operation may require a resource with a specific skill. The scheduling engine can find resources with specific skills by searching for the skill information on the worker

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to which the resource is linked. This is only applicable for job scheduling, not operation scheduling. To set up skills open: Human resources > Competencies > Setup > Skills. •

Courses - Courses can be created and maintained. This lets you track what courses your employees have attended. An operation may require a resource with a specific course. The scheduling engine can find resources with specific courses by searching for the course information on the worker to which the resource is linked. This is only applicable for job scheduling.

•

Certificate - Certificates can be added to a user, which lets you track what certificate your employees have. An operation may require a resource with a specific certificate. The scheduling engine can find resources with specific certificates by searching for the certificate information on the worker to which the resource is linked. This is only applicable for job scheduling.

•

Title - The title an employee has can also be a requirement for a job. An operation may require a resource with a specific title. The scheduling engine can find resources with specific titles by searching for the title information on the worker to which the resource is linked. This is only applicable for job scheduling.

Priority and level Priority is used to determine which resource should be allocated first if there were more than one resource that could perform the same capability at same level within the given period. For a certain capability, the resource with the lowest priority number is selected first. In other words, the lower the priority number for a certain capability is, the higher the priority. Level is a qualification of a capability that allows system search of a suitable resource if there are multiple capable resources. Level does not have any units and is a numeric value solely for the purpose of finding a resource. It is not used in capacity calculations in any manner. For example, If a level value of 100 is input in the route then it means all resources that can perform at more than or equal to 100 can be used. If a resource R1 has a level of 300 then it means that resource can perform the operations that need up to 300.

Resources Resources are assigned to jobs and operations. Resources can be different types including machines, tools, human resources, vendors, Facility or locations. The scheduling engine aligns with the new resource model and can schedule resources based on their capabilities. Resources and capabilities replace work centers and task groups to provide for more flexibility in setup and maintenance. In Finance and Operations, resources can be allocated to jobs and operations by matching the capabilities of the resources with the requirements of the operation. Alternative resources with the same capabilities are considered, unless there are requirements for a specific resource or resource group. This applies whether you select to run job scheduling or operations scheduling. The selection process consists of matching the requirements of the operation with the

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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capabilities of the resources. Other requirements, such as location, resource working time, and resource type are also considered when planning the production.

Setting up resources Operation resources are used throughout the production or project processes. They can be machines, tools, people, or vendors that contribute to the production of an item. They are considered as one unit for managing the planning of capacity requirements and detailed scheduling. After an operations resource is created, you can assign it to a resource group and specific productions. You can reassign resources to different resource groups. However, a resource can only be assigned to one resource group at a time. The Effective and Expiration date fields on the Resource groups tab represent when the resource in question can be used for production. This setup lets you share a resource across many sites. When a resource becomes a member of the resource group, it represents the physical move from one site to another.

Resource groups After you create capabilities and resources, the next step in the process is to create the resource groups. The way in which resource groups are set up depends on the complexity of the manufacturing process. If there are several demands that must be met, and multiple classifications, based on the capacity or the capability of individual resources, then these factors must be reflected in the resource group setup.

For example, you can post information on resources to the ledger by using the resource group, instead of having to post financial data for each resource individually. As another example, a resource group can be viewed as representing a physical area where resources are located on the production floor, often delineated by a yellow line on the floor.

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Companies can determine both the operating scheduling percentage and the efficiency percentage for their resources and resource groups. These percentages specify the extent to which capacity is available in the resource or resource group associated with operation scheduling.

Operation scheduling percentage The Operation scheduling percentage field on the General tab of the Resources groups and the Resources pages show the maximum percentage of the daily capacity that can be scheduled for each production on either the group or the resource level. This means that if, according to the calendar, a resource group or a resource is available eight hours a day, and the operation scheduling percentage is set to 50 percent, the availability for scheduling is four hours. Note that this is per production order. For example, you can schedule two production orders, 4 hours each in a full 8 hours working day.

Efficiency percentage The Efficiency percentage field on the General tab of the Resources or the Resources group pages is used to reduce or increase the duration of the individual jobs scheduled on the resource or the resource group. For example, If the efficiency percentage is set to 50 percent, a job that is scheduled on the resource or resource group requires 50 percent of the capacity available according to the calendar, which means that the processing time is two times as long. The following formula applies: Scheduling time = timeĂ&#x2014;100/efficiency percentage. The efficiency percentage allows for the default operating efficiency of this resource to be changed. Changes to this setting either increase or decrease the duration of the individual jobs scheduled on the resources or the resource groups.

Exclusivity Another configuration option in resources with an effect on scheduling and calendars is Exclusivity. Exclusivity is only available on the resources and not on the resource groups. When you use primary and secondary operations, select the Exclusive option to reserve the resource exclusively for a job. Ongoing jobs for the resource will not be interrupted by other jobs. For example, a primary resource is exclusive. When there is a break in the scheduling of the secondary resource, the primary resource cannot be reserved for other jobs. As another example, a secondary resource is exclusive. Performing an operation requires a 50-percent load on the secondary resource. The secondary resource is reserved at 100-percent load, even though it is operating at 50 percent, and no other jobs can be scheduled on that resource until the job is completed. If this option is cleared, when there is a gap between reservations or a resource is not being used at 100percent capacity, it can be reserved for other jobs.

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To define a resource as exclusive, select the Exclusive check box on the General tab of the Resources page.

Capacity planning and finite capacity The planning of production orders in Finance and Operations is determined by the amount of capacity available in the resource groups and/or specific resources, based on production calendars and requirements. The Resource groups and Resources pages contain a Finite capacity check box. If you select the **Finite capacity **check box, you limit the scheduling of operations or jobs to the actual capacity available on the resource group or resource. If the Finite capacity check box is selected, the capacity is limited. This means that operations or jobs are scheduled based on the actual capacity available on the resource group or resource. If the check box is cleared, operations or jobs are scheduled with unlimited capacity and the already reserved capacity on a resource or resource group is not considered. When finite capacity is set either on the resource group or resource level, the next time that the master scheduling is run, Finance and Operations views the current orders scheduled and the requirement dates of the new orders and automatically schedules them based on availability. You must define finite capacity in the resource group, resource or master planning if you want to run finite capacity during scheduling

Integration between the General ledger and the Production control modules Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/11-integration-general-ledger-production

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As a Functional Manufacturing consultant, you should be aware of the relationship between the Production control module and other modules in Finance and Operations. This topic explains the integration between the General ledger module and the Production control module. The production order life cycle formally begins with the creation of the production order and ends with a finished, manufactured item that is ready for the customer. When a step in the life cycle is completed, the production order reflects this with a status change. Each step in the life cycle is associated with as the following activities: •

Monitoring and controlling the production

•

Estimating and calculating costs

•

Scheduling orders

•

Starting and ending actual production

The production order contains information about what is to be produced, how much (quantity), and the planned finish date. The system assigns an order status to each step in the life cycle of the order. The status shows where the item is in the production process. When an order is first created, it is automatically assigned the status “Created”. To understand the interactions between the General ledger and Production control modules, let’s review the production statuses but with an emphasis on how each step pertains to financial data, or interacts with the general ledger.

Create and estimate The first two steps of the production order life cycle are Create and Estimate. Create - When creating production orders you can specify the settings that determine how production order transactions are posted to the ledger. These settings pertain to production orders created manually or automatically from a sales order or master planning schedule. Estimate - This step involves the calculation of the most likely material, labor, and route consumption for the production. You can create inventory transactions, which are issue transactions for raw materials with the status of On order and receipt transactions for the BOM with the status of Ordered. You can also create purchase orders and sub-productions for the production order. Reserve items and calculate the price of the finished goods based on parameter settings.

Schedule The next step in the production order life cycle is Schedule. After the production order has been estimated, it is scheduled. Production orders can be scheduled based on operations scheduling, job scheduling, or both. •

Operations scheduling - This scheduling provides a rough long-term plan. By using this method, you can assign start and end dates to production orders. If the production orders are attached to route operations, you can assign them to cost center groups. www.dynamicscompanions.com Dynamics Companions

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Job scheduling - This scheduling method provides a detailed plan. Each operation is broken down into individual jobs with specific dates, times, and assigned resources. If finite capacity is used, jobs are assigned to resources based on availability. You can view and change the schedule in the Gantt chart.

Release and start The next steps of the production order life cycle are Release and Start. •

Release - In this step, the system releases the production order when the schedule is realistic and finalized. At this time, you can print production order documents such as the job card, the route card, and route job. At this stage, the status of the production order changes to indicate that the production can start.

•

Start - When a production order is started, you can post costs against the order. You can automatically allocate estimated material and route costs to the order when it is started. This allocation is known as pre-flushing or auto consumption.

You can manually allocate material to the order by creating picking list journals and allocate labor and other route costs to the order. If using operations scheduling, you can allocate these costs by creating a route card journal. If using job scheduling, you can allocate these costs by creating a job card journal.

Report as finished The next step of the production order life cycle is Report as finished When the production order is reported as finished, the quantity of finished goods completed is updated in the Inventory and warehouse management module. If you use work-in-process (WIP) accounting, the system uses the standard cost from the On-hand page to create a ledger journal to reduce the WIP accounts and increase the inventory of the finished goods. When the cost of a production order is calculated, the actual cost of the production is posted and the posting that occurs during reporting-as-finished is reversed. If the material and labor costs associated with production are not already allocated in a journal or by pre-flushing, they can be automatically allocated by back-flushing. This involves the post-deducting of inventory transactions processes.

End The next step in the production order life cycle is End. Before you end production, the system calculates actual costs for the produced quantity and all estimated costs of material, labor, and overhead are reversed and replaced with actual costs. If you select the End job check box when running the cost calculation, the production order status changes to Ended. This status prevents any additional costs from being inadvertently posted to a completed production order. When a production is reported as finished, it means that finished items have reached inventory and become available to ship. These items values are posted to the account specified in the Report as www.dynamicscompanions.com Dynamics Companions

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finished field. Debit the amount on this auxiliary account and calculate the amount by multiplying the quantity with the standard cost price. This account functions as an auxiliary account because the amount is only posted on this account until costing takes place. To balance the books, credit the same amount to the account specified in the Report as finished offset account field.

Default ledger settings You can define a ledger setting as your default value in the Production control parameters page by clicking Production control > Setup > Production control parameters > General tab and selecting the setting in the Ledger posting field. The default value will be automatically assigned to all subsequent production orders created from a sales order line, master planning, or sub production orders.

When you create a production order manually in the Create production order page, the value in the Ledger field will also be pre-populated with the default value. You can override it by selecting another value from the list of options.

Inventory posting profiles The inventory posting profile controls which main accounts will be used with each posting update in the inventory subledger and the general ledger.

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Production groups Production groups establish a relation between production orders and the ledger accounts. This option is used when configuring the production control parameters to use the Production group option. When this option is selected, the Production group is mandatory on the production order, and all posting profile information will come from the selected production group.

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The Production groups page is used to develop a list of production groups that you can select from to create production orders. You can also use this page to assign ledger settings to all production orders that are included in the production group, when you use the production group settings as the posting principle. When ledger settings are specified on the production group, all production orders in the group are posted to the ledger using the same criteria as is defined for the group. In other words, this posting profile is applied as a default to all the orders that are part of the production group and controls how posting is performed and how costs are calculated.

Production journals The production journals are used to report item consumption, route consumption, and finished items. They are a direct link to the ledger system, since posting these journals involves posting to the ledger. Journal transactions are posted in the General ledger based on the ledger setting for the production order.

Production journal types Production journals contain a record of each of the different types of item transactions that occur when you are working with production orders. These item transactions have a direct effect on the company's financial records. Locate the production journals by clicking Production control and then Journals and selecting the journal type from the list.

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The production journal types include the following: •

Picking list - This journal is a record of the raw materials drawn out of inventory.

•

Route card - This journal is a record of the route consumption.

•

Job card - This journal is a record of the resource consumption using feedback job cards.

•

Report as finished - This journal is a record of all finished items.

When a production journal posts, all item transactions are automatically transferred to the general ledger. Information posted from various journals in the system is used in the general ledger when companywide financial transactions are calculated.

Feedback on consumption during production If you wish, you can direct the system to update production journals to provide feedback automatically after production is started. You can do this by selecting the relevant option in the Production control parameters page.

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The following can be selected in the Automatic BOM consumption field: 1.

Flushing principle - You can select individual items in the BOM to be released manually. All other items for which manual release is not selected are released automatically.

Always - All items are released automatically.

Never - All items are released manually.

The following can be specified in the Automatic route consumption field: •

Route group dependent - If automatic consumption is selected in the routing group feedback and you include the setup and processing times, the route has automatic consumption. If not, the consumption must be entered manually.

•

Always - All route consumption is entered automatically.

•

Never - All route consumption is entered manually.

Production cost posting Production costs are posted every time a journal is posted. The production costs accumulate in the Items in production and Work in process accounts until the production order is complete. Production orders that are not ended have estimated production costs based on estimated quantities, and individual costs of quantities reported as finished are posted. However, the realized production cost is not calculated until the production order is ended. When the production order is ended, the final production cost is calculated using actual production amounts.

Exercise - Define production control parameters Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/12-exercise-define-production-control-parameters Jerry, the Operations manager at USMF, wants to make some changes to the policies. He has instructed you that routes should not be allowed to be modified or have their approvals removed. Instead, a new route operation should be created, and the effective dates updated. Your task is to update the parameters to meet these business requirements.

Before you begin To get the most out of this exercise and the other exercises that are included with this module, we recommend that you have the standard sample data available in Finance and Operations that is installed using Lifecycle services (LCS). 1.

Go to Production control > Setup > Production control parameters.

Set the Block removal of approval slider to Yes under the Routes group.

Set the Block editing slider to Yes under the Routes group.

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Click Save.

Close all pages.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exercise - Create production pools Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/13-exercise-create-production-pools Jerry, the Operations manager at USMF, wants more visibility into production orders that are delayed. He has given you instructions to track the following: •

Subcontracted production orders that are missing deliveries.

•

Production orders with missing materials.

•

Orders delayed dues to machine failures.

Using the information provided, create three new production pools for use on new production orders.

Create a production pool for delayed subcontracted work 1.

Open Production control > Setup > Production > Production pools

Click New to create a new pool.

Type “Delay-Sub” in the Pool field.

Type “Subcontracted Work Delayed” in the Name field.

Create a production pool for missing materials 1.

Click New to create a new pool.

Type “MATMISSING” in the Pool field.

Type “Materials Missing” in the Name field.

Create a production pool for machine failures 1.

Click New to create a new pool.

Type “MACHFAIL” in the Pool field.

Type “Machine Failure” in the Name field.

Close all pages.

Exercise - Define ledger posting for production Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-indynamics-365-finance-ops/14-exercise-define-ledger-posting-production

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You need to create a new item group for bicycle items and configure the ledger posting for production orders. The inventory account used for the new finished good bicycles will be the Finished goods inventory account number 140200. The WIP account will be the Production WIP-material account number 150150. Using the information provided create the item group and configure the production order postings.

Create an item group for bicycles 1.

Open Inventory management > Setup > Inventory > Item groups.

Click New to create a new item group.

Type “Bicycle” in the Item group field.

Type “Bicycle Finished Goods” into the Name field.

Close the page.

Configure the finished goods inventory accounts for production postings 1.

Open Inventory management > Setup > Posting > Posting.

Click the Production tab.

Select the Estimated cost of materials consumed radio button on the left pane.

Click New to add a row.

Select Group in the Item code field.

Select Bicycle in the Item relation field.

Select 140200 in the Main account field.

Select the Estimated manufactured cost radio button on the left pane.

Click New to add a row.

10. Select Group in the Item code field. 11. Select Bicycle in the Item relation field. 12. Select 140200 in the Main account field. 13. Select the Cost of materials consumed radio button on the left pane. 14. Click New to add a row. 15. Select Group in the Item code field. 16. Select Bicycle in the Item relation field. 17. Select 140200 in the Main account field. 18. Select the Manufactured cost radio button on the left pane. 19. Click New to add a row. 20. Select Group in the Item code field. 21. Select Bicycle in the Item relation field. 22. Select 140200 in the Main account field.

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23. Close the page.

Configure the production WIP-material account for production postings 1.

Open Inventory management > Setup > Posting > Posting.

Click the Production tab.

Select the Estimated cost of materials consumed, WIP radio button on the left pane.

Verify the row is configured for All in the Item code field and the Main account is 150150.

Select the Estimated manufactured cost, WIP radio button on the left pane.

Verify the row is configured for All in the Item code field and the Main account is 150150.

Select the Cost of materials consumed, WIP radio button on the left pane.

Verify the row is configured for All in the Item code field and the Main account is 150150

Select the Manufactured cost, WIP radio button on the left pane.

10. Verify the row is configured for All in the Item code field and the Main account is 150150 11. Close the page.

Exercise - Define ledger posting for resources Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-in-dynamics365-finance-ops/15-exercise-define-ledger-posting-resources You need to create a new cost category with an hourly rate of $15.00 per hour to produce bicycles. The new cost category should be assigned to a new resource group for bicycle production. Your task is to create the cost category and link to the appropriate expense account and WIP accounts for posting and then link the new cost category to a new resource group for bicycle production.

Create a shared category for bicycle assembly 1.

Open Production control > Setup > Routes > Shared categories.

Click New in the Action Pane.

Type Bicycle in the Category ID field.

Type Bicycle Assembly in the Category name field.

Set the Can be used in Production slider to Yes.

Close the page.

Create a new cost category for bicycle assembly 1.

Open Production control > Setup > Routes > Cost categories.

Click New in the Action Pane.

Select Bicycle in the Category ID field.

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Select L2 for Assembly in the Cost group field.

Click the Category setup tab in the action pane.

Click Price.

Click New.

Select 10 for Current Fiscal Period in the Version field.

Select 1 in the Site field.

10. Type 15.00 in the Price field. 11. Click Save in the Action Pane. 12. Click Activate. 13. Close the window.

Add ledger postings to the cost category 1.

On the Cost categories page, expand the Ledger postings FastTab.

Click the Estimated manufacturing cost absorbed drop-down arrow.

Select the Direct Labor Applied account number 600500.

Click the Manufacturing cost absorbed drop-down arrow.

Select the Direct Labor Applied account number 600500.

Click the Estimate cost of manufacturing consumed, WIP drop-down arrow.

Select Production WIP-Labor account 150200.

Click the Cost of manufacturing consumed, WIP drop-down arrow.

Select Production WIP-Clearing account 150100.

10. Close the page.

Create a new resource group for bicycle production 1.

Open Production control > Setup > Resources > Resource groups.

Click New to create a new group.

Type 1150 in the Resource group field.

Type Bicycle Assembly in the Description field.

Select 1 in the Site field.

Assign the cost category for setup, run time and quantities 1.

Expand the Operation FastTab.

Select Bicycle in the Setup category field.

Select Bicycle in the Run time category field.

Select Bicycle in the Quantity category field.

Click Save in the Action Pane. www.dynamicscompanions.com Dynamics Companions

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Close the pages.

Exercise - Configure item prices Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-in-dynamics365-finance-ops/16-exercise-configure-item-prices You are an accounting manager overseeing an order being shipped to the Acme Factory. To accomplish this goal, the details of the FIFO test item must be modified, the purchase order must be created, and item price updated, and an invoice must be generated.

Modify details of the FIFO test item 1.

Go to the Product information management module.

Go to the Released products page.

Search for FIFO test item.

Click Item number to open details.

Click Edit to modify details.

Go to the Purchase FastTab.

Update price from 1.00 to 6.49 in the Price field.

To update the sales price, select the Sell FastTab.

Enter 10.49 in the Price field under Base sales price.

10. Go to Price update. 11. Go to Sales price model. 12. Select Contribution ratio in the drop-down menu. 13. Type 50.00 in the Contribution ratio field. 14. Select Purchase price in Base price drop-down menu. 15. To manage latest cost price for the item, go to the Manage costs FastTab. 16. For Latest cost price, set slider to “yes”. 17. Set price to 6.49 in the Price field. 18. Close the page.

Create a purchase order and update the item price 1.

Go to the Procurement and sourcing module.

Go to the All purchase orders page.

To create a new purchase order, click New.

Select Vendor account.

Verify that appropriate site and warehouse are selected, then click OK. www.dynamicscompanions.com Dynamics Companions

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Add a line to the purchase order for the FIFO test item, type “5” in the Quantity field.

Update the Unit price to 6.99.

Click Save.

To confirm the purchase order, go to the Purchase tab in the Action Pane.

10. Click Confirm.

Generate an invoice 1.

Go to Invoice.

Select Generate.

Select Invoice.

On the Invoice page, specify an invoice number in the Number field.

Put today’s date in the Posting date field.

Scroll down to verify the unit price and quantity info on the Lines FastTab.

Click Post.

Close the page.

Go to Product Information Management, Released products.

10. Search for FIFO test item. 11. Open details by clicking FIFO Test. 12. Verify that the date, price, and base sales price are updated. 13. Close all pages.

Exercise - Create and manage resources Company USMF has bought a new packing robot for their speaker packing workshop. The packing robot will reduce the need for manual labor in the speaker packing workshop. Therefore, some workers from this group can be reassigned to perform other work, as the new packing robot becomes fully operational.

Create capabilities 1.

Go to Organization administration > Resources > Resources > Resource capabilities.

Click New.

Type "GTL-Assembly " in the Capability field and "Assembly" in the Description field.

Click New.

Type "GTL- Packing" in the Capability field and "Packing" in the Description field.

Close the Resource capabilities page.

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Assign resources to capability 1.

Go to Organization administration > Resources > Resource capabilities.

Select GTL-Assembly from the list of capabilities.

Click Add from the Action Pane.

Select "5110", Assembly worker 1, in the Resource field.

Accept the default Expiration date of Never.

Type "1" in the Priority field.

Accept the default Level of 0.00.

Repeat steps 3 to 7, for the resource 5111.

Close the Resource capabilities page.

Assign capabilities to a resource 1.

Go to Organization administration > Resources > Resources.

Select resource 5111 in the grid.

Expand the Capabilities FastTab.

Select View > All from the Action Pane.

Click Add from the Action Pane.

Type "GTL-Packing" in the Capability field.

Accept the default Effective date of today's date.

Accept the default Expiration date of Never.

Accept the default Level of 0.00.

10. Type "2" in the Priority field 11. Close the Resources page.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-in-dynamics365-finance-ops/18_get-started-production-control-quiz

Get started with production control in Dynamics 365 for Finance and Operations knowledge check 1.

What default values does Finance and Operations use if production control parameters are not set to be site specific? a) Prompt the user for each setting to be assigned b)

Use the company parameters that have been configured

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c) 2.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Error on production when production functions are attempted

If a company sets up site specific production control parameters for Site 1, but does not set them up for Site 2, what parameters will be used at Site 2? a) The site-specific parameters for Site 1 will be used at Site 2. b) The company defined production control parameters will be used for Site 2. c)

No parameters will be applied to Site 2.

d) Site specific parameters are required for every site. 3.

Which of the following production postings can be described as the inventory account for removing the value of raw materials from inventory a) Estimated cost of materials consumed b) Estimated cost of materials consumed, WIP c)

Estimated manufactured cost

d) Estimated manufactured cost, WIP 4.

Which of the following is the type of production journal in Finance and Operations that is used for reporting labor with details such as start and stop times? a) Picking list b) Route card c)

Report as finished

d) Job card

Summary Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-production-control-in-dynamics365-finance-ops/19_get-started-production-control-summary In this module, you learned how to differentiate between discrete, lean, and process manufacturing in Finance and Operations. Combining different type of productions together is called Unified manufacturing (or mixed mode). You learned about the common configuration settings for unified manufacturing in the Production control module and the interconnectivity between the General ledger and the Production control modules.

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Module 2: Get Started with Discrete Manufacturing Even though each legal entity's manufacturing processes are unique, depending on the nature of the production environment, the core conceptual elements that are used in the Production control module are frequently very similar. Lessons •

Introduction

•

Understand the discrete production process statuses

•

Understand the bill of materials

•

Working with BOM and item configurations

•

Create bill of materials

•

Production orders

•

Practice Labs

•

Module summary

In this module you learned about: •

Discrete manufacturing concepts

•

Production process statues

•

Production stages

•

Bill of Material (BOM)

•

Resources

•

Routes and Operations

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Get started with discrete manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/ If a company only produces several simple products, production can be scheduled manually with the correct bill of materials (BOM) parts arriving on the production floor, at the correct time, and at the proper resource. This module explains what discrete manufacturing is and how it works in Dynamics 365 for Finance and Operations. In this module, you will learn about: •

Discrete manufacturing concepts

•

Production process statuses

•

Production stages

•

Bill of materials (BOMs)

•

Resources

•

Routes and operations

Introduction Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/1-get-started-discrete-manufacturing-introduction Even though a company's manufacturing processes are unique, depending on the nature of the production environment, the core conceptual elements that are used in the Production control module in Dynamics 365 for Finance and Operations are frequently very similar. In this module you will learn about: •

Discrete manufacturing concepts

•

Production process statuses

•

Production stages

•

Bill of materials (BOMs)

•

Resources

•

Routes and operations

The core concepts in discrete manufacturing are summarized in the following list: www.dynamicscompanions.com Dynamics Companions

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•

Bill of materials (BOM) - The BOM is one of the most important documents in a manufacturing company. Before a company can produce a product, it must know which components are to be included and how many of these components are needed to make the end-product. The BOM contains all the ingredients, components, parts, or raw materials required to make one finished product.

•

Resources - Resources are the legal entity's total working resources. It is anything that is used for the creation, production or delivery of a good/service over and beyond the materials consumed in the process. Resources can be of different types including machines, tools, people, vendors, facility or locations.

•

Routes and operation - The route determine the process steps that are needed to produce a finished product. The BOM defines the materials required, the resource defines where the item is produced, and the route determines the sequence of events to build the finished product. Operations are the specific tasks or work processes that are put together in conjunction with a route to produce a specific product. Each task is associated with a time allotment to complete the individual task.

In the following units you will learn more about the production process workflow and discrete core components required to be set up before using Production control module for discrete manufacturing.

Discrete production life cycle Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/2-discrete-production-life-cycle The production of items follows a sequential production life cycle. The life cycle reflects the actual steps taken to manufacture an item. It begins with the creation of a production order and ends with a finished, manufactured item that is ready for the customer. Each step in the life cycle requires different kinds of information. The Production control module in Finance and Operations is linked to these other modules: •

Inventory management

•

Warehouse management

•

General ledger

•

Master planning

•

Organization administration

This integration supports the information flow that is needed to complete the manufacturing of a finished item. When a step in the life cycle is completed, the production order signals this by a change in the production status. If one or more of the mandatory steps (or updates) are skipped, the steps are performed automatically before the production order is moved to the next step. The production order is assigned a status that reflects where it is in the production life cycle.

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The status on the production order reflects the sequential steps of the production life cycle. The following is a quick overview of the status a production order can have: •

Create - The status of the production order when it is first created

•

Estimate - The status of the production order after running a material and cost estimation.

•

Schedule - The status after running operation or job scheduling.

•

Release - The status when production orders are scheduled and have been released to production

•

Start - The status of the production order when production starts

•

Report as finished - The status of the production order, when production is finished and ready for final action

•

End - The status of the production order after final costs have been applied, the item is complete, and the order is no longer active.

You can change information on production orders up to and including those with Release and Start status. However, if the changes affect cost estimates or scheduling, you must run Estimation, or Operations scheduling or Job scheduling (or both) again to update the information. The Production control module supports a company's ability to maintain a variety of production sites distributed over different geographic locations. The production sites must be contained within a single legal entity.

Create and estimate The first two steps of the production life cycle are Create and Estimate. These two are part of preproduction stage.

Create You can create production orders manually or automatically from a sales order or master planning schedule. When the order is created through the master planning process, the production orders are generated based on demand and when the planned order is firmed a production order is created and automatically sets to be in the scheduled state. If the planned order is not firmed then it will appear in the Production control module as a production order. If is created manually it is also called production order. The inventory transactions for the BOM item is generated in this stage.

Estimate You can calculate material and (labor) route consumption estimates, and create inventory transactions for the BOM lines, which are issue transactions for raw materials with the status On order and receipt transactions for the BOM that are being created with the status Ordered. You can also create purchase orders and sub-productions for the production order. Items are reserved and the price of the finished goods is calculated, based on parameter settings.

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Schedule Scheduling is the third step in the production life cycle. You can run scheduling after the production order has been created and estimated. Running scheduling raises the production order status to Scheduled. Since the production life cycle is sequential, if the production order has not already been estimated before it is scheduled, an estimation of the projected cost is run automatically. After the production order has been estimated (which is mandatory and run either automatically or manually), it is scheduled. Production orders can be scheduled based on operations scheduling, job scheduling, or both. •

•

Release and start The fourth and fifth steps of the production life cycle are Release and Start. These two are as part of production stage.

Release The production order is released when the schedule is realistic and finalized. Production order documents such as the job card, the route card, and route job can be printed. The status of the production order at this stage changes to indicate that the production can start. Jobs will be visible in the Job Card Terminal and Job Card Device after Release. Also, you can tie release to warehouse for pick work to the production order release process.

Start When a production order is started, material and time consumption can be issued to the order by using the journals. Estimated material and route costs can automatically be allocated to the order when it is started. This allocation is known as pre-flushing or "auto consumption." You can manually allocate material to the order by creating picking list journals, and manually allocate labor and other route costs to the order. If using operations scheduling, you can allocate these costs by creating a route card journal; if using job scheduling, allocate these costs by creating a Job card journal.

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Report as finished When the production order is reported as finished, the quantity of finished goods completed is updated in the Inventory management module and ready to be put-away to a warehouse location or a shipping area If you are using work-in-process (WIP) accounting, Finance and Operations creates a ledger journal to reduce the WIP accounts and increase the inventory of the finished goods using the standard cost from the Item details form. When you calculate the cost of a production order, the system posts the actual cost of the production and then reverses the posting that occurs during the reporting-as-finished phase. If the material and labor costs that are associated with production are not already allocated in a journal or by pre-flushing, you can automatically allocate them by back-flushing, which involves the post-deducting of inventory transactions processes. If the production order is complete, select the End job field to change the remaining status to End. Otherwise, it is left open to report additional quantities produced.

End This is the final step in the production life cycle and is as part of the post-production stage. Before you end production, actual costs are calculated for the quantity that was produced. All estimated costs of material, labor, and overhead are reversed and replaced with actual costs. If you select the End job check box when you run the cost calculation, the production order status changes to Ended. This status prevents any additional costs from being inadvertently posted to a completed production order.

Example A sales order is received and entered into the system by Susan, the Order processor, and a production order is created to fulfill the sales order demand. Note: In most cases the production order is not created along with the sales order but created when firming a planned production order after running master planning. Joe the Planner, runs the plans either manually or the plans will run based on a defined schedule by a batch job. Raman, the Purchasing manager will create the purchase order for the raw materials from a vendor, preferably an approved or preferred vendor since there might be a trade agreements to secure the purchase price for a specified time.

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John, the Warehouse manager, plans, and allocate tasks to warehouse workers to prepare the locations in the warehouse. The raw materials arrive and are registered in Finance and Operations and a Warehouse worker, receives raw materials by placing them in a proper location. Samuel, the Production manager, alongside with Cameron the Production floor (shop floor) manager, assign operators to specific production orders on a machine to perform the job. He can also get an overview of the resources and their utilization in the resource overview forms and by using the Gantt chart and use that for optimizing the production plan. By using the time and attendance, Cameron can have the visibility to schedule production orders based on availability of resources. Shannon, the Machine operator, uses the job card terminal or job card device, which is a part of the Manufacturing execution module, to register when she starts and ends job, quantity completed and error quantities per production job . When the production is reported as finished, the quality control team may need to test the finished goods prior to changing the status of the production order to End. When the production order is ended, John the Warehouse manager will dedicate the Warehouse worker to move the finished goods to a location for outbound processing, such as a place to pick, pack and ship to the customer. Susan can then invoice the customer upon delivery of the goods.

Master planning and planned production orders Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/3-master-planning-planned-production-orders Master planning acts as the planning engine for Finance and Operations along with the Production control module. Master planning calculates what to produce based on demand in general such as the following: •

Sales orders and sales quotations

•

On-hand inventory

•

Transfer orders

•

Production lines

•

Minimum inventory requirements,

•

Kanban lines

•

Projects

Master planning also calculates the following when to produce based on, for example, delivery dates for sales orders, and how much to produce based on the need to fulfill sales orders, maintain safety stock, and cover requirements deriving from production orders. www.dynamicscompanions.com Dynamics Companions

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Master planning calculates the net requirements of what is needed in a production order. A plan is usually run as an overnight batch process in most companies so that the list of requirements is updated with changes and additions every morning. In simple terms, when requirements are not met by current inventory, a planned production order is issued that specifies what is needed and when. This provides the planner with an updated picture of what is missing and allows decisions to be made about how to meet these requirements.

Bill of materials (BOMs) Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/4-bill-of-materials The bill of material (BOM) is one of the cornerstones in the definition of the production process. Manufacturing companies use BOMs to track and plan which components are required to produce a product. A bill of materials is a comprehensive list of all the components, parts, raw materials, assemblies and their quantities that are required to make a finished product. BOMs are used to specify ingredients or subordinate components that are physically required to make each assembled part number or item in production. If a company only produces several simple products, production can be scheduled manually with the correct BOM parts arriving on the production floor, at the correct time, and at the proper resource. Companies need to schedule and track their components and subcomponents in the most efficient costeffective way. BOMs define the relationship between the components and the finished product or sub-assembly. A clear definition of this relationship is important for the following: •

Creating production orders.

•

Costing calculations.

•

Item planning ensures the correct products are purchased and produced in the right quantities to the right time.

•

Ensure correct stock levels.

•

Ensure that correct components are used to build a quality product.

Every item that must be financially accounted for in an inventory or in the costing phase must be included in the BOM. The level of detail for this is determined by the company's production and accounting needs. For example, items such as nuts, bolts, screws, and nails are frequently not included in BOMs because the cost of tracking these items is higher than their actual value. Although BOMs define the components and their relationships, they do not define the sequence of steps to produce or assemble the finished item. These steps are defined on the route.

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Product concept A BOM consists of products that are in your inventory. Therefore, let's first remind you about product definitions which are created independently of a legal entity and core values such as product number, type, and name are shared values across all legal entities in the organization. Some core values can be overridden by a legal entity, an example is the search name, whereas other values are kept as key definition attributes and therefore cannot be changed other than on the product definition itself. •

Product - A product is a uniquely identifiable product. It serves as a core product that does not vary and therefore no product dimensions can be associated with the definition.

•

Product master - A standard or functional product representation that is the basis for configuring product variants. The variations are configured by selecting a configuration technology. This can be either a set of predefined product dimensions or by using product configurations in sales scenarios. Product masters serve as templates or models for variants. The variants of a product master can be either predefined or created in sales scenarios by using a product configurator. A product master is associated with one or more product dimensions.

•

Product variant - A product variant is the configuration of a product master. Based on the choice of the configuration technology, the variant can be either predefined by using the product dimensions of its master or configured by using a product configuration tool.

BOMs can contain either items or services types which could have either product or product master subtypes with specific variants in Finance and Operations depending on whether the item is purchased or produced in-house. The product types that are used in a BOM are as follows: •

Item - These are products that are purchased or produced but are frequently included in the production of manufactured (BOM) items. An item in a BOM that is defined as product type Item is either purchased from an outside source or produced in house depending on the default order settings type, when the default order type is set to purchased, then the item is purchased. When the default order type is either production or Kanban, then the item is manufactured.

•

Service - These are items that are used, for example, the service that you are buying when you are sourcing one an operation in a production order to a vendor which is called subcontracting. An item in a BOM that is defined as product type Service represents and quantifies a service that is a part of the manufacturing process. For example, it can be the number of hours put in by each resource for services performed during the manufacturing process.

BOM line types A description of the BOM line types is summarized in the following list: •

Item - Select this line type for materials or services that are directly consumed, and that don't require further explosion or pegged supply.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Pegged supply - When using this line type a reference production order is created for the BOM line item when the production order is estimated. When a BOM Line is set to pegged supply then that item will be pegged (signaling a product demand requirement) according to the method of production (lean or normal) and not fixed by a warehouse.

•

Phantom - This line type is basically a placeholder for components that are not specifically tracked if they are in production but are instead included and accounted for in the master BOM. Phantom BOMs enable the master planning to calculate requirements for the needed components, even though the item is only occasionally used in the manufacturing process. See the Phantom items for an example.

•

Vendor - These are components purchased from an external vendor. In this case, a purchase order is automatically generated when planned order is firmed. When the production is created manually the purchase order is created when the production order is estimated.

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Scenario A legal entity that makes flashlights uses a BOM that contains a plastic body, light bulb, battery, and lens. The Materials manager purchases light bulbs, batteries, and lenses. You do not have to purchase the plastic bodies, as they are produced in-house. When creating the BOM for the flashlight, John, the Materials manager first enters the lines for the light bulb, battery, and lens using the Item line type. John then enters the plastic body of the flashlight in the BOM produced in-house by using the Pegged supply line type. This guarantees that a production order for the body is created when the production order for the finished good is estimated.

BOM features The following is a lists BOM features: •

Version control - Version control allows for the phasing out of an older or no longer used component. BOMs can be set up with multiple versions that have different effective dates.

•

Sub-BOM control - Allows for sub-BOMs to be sold or planned, either independently or at the same time as the parent production.

•

Subcontractor support - Use this feature to automatically generate purchase orders to external vendors when master planning is run.

•

Quantity dependent BOMs - Quantities on BOMs can be used to control which version of the BOM is used in production. For example, if less than 500 pieces of a BOM are ordered, version 1 is used and when more than 500 pieces are ordered, version 2 is used.

•

Multisite BOMs (and routes) - A finished product can be set up so that part of it can be made at a different production site. This is done by using the different levels in the BOM structure to assign where the components are to be produced. When multiple sites share inventory with the same item number the BOM (and route) can be set up so that the components of these products can be produced at different sites. When this feature is used, the corresponding routes must also be defined based on site.

•

Phantom BOMs - Phantom BOMs allow for the deduction from inventory to occur only when the component is needed in the production. Select the Phantom line type when you want to explode any lower-level BOM items that are contained on the BOM line.

In master planning, in planned cost calculation, or on estimation of a production order that uses BOM lines of the Phantom type, the parent BOM line that refers to a product variant that has a phantom BOM is replaced by the component items that are listed as BOM lines in that BOM, as determined by the applicable active BOM version of that product variant. If the product variant has an applicable active route, the operations of that route are merged into the parent route. Note that phantoms are typically used to simplify the engineering process. Extensive use of phantom BOMs in many levels influences performance, especially in highly repetitive manufacturing scenarios. To

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improve performance, you should avoid deep hierarchies of phantoms. Instead, use pre-exploded production BOMs and routes

BOM versions Each BOM can have a variety of BOM versions if different dates, sites, product dimensions, or quantity intervals are defined for each version. It is a specific configuration of a bill of material to include an item. An unlimited number of versions can be allocated to BOM items. Versions enable items to be associated with many different BOMs. You can create a BOM without a BOM version; However, to link a BOM to a product you need a BOM version. You can have unlimited number of BOM versions, but only the active BOM version is used for the production orders. The BOM version links the BOM and the product to produce the finished goods. A product can have zero or many BOM versions. A BOM version can be approved and then can be activated. The active BOM version is used for finding the default BOM when creating a production order for the product. BOM versions are the link or reference between a product and the main BOM. BOM versions allow the same products or components to be associated with many different BOMs. BOM versions can be Active or Inactive. Active versions are the only versions that are recognized by the system outside of the BOM functionality. The Production control module, for example, uses only active versions. You can specify that no versions are active, or that a variety of BOM versions are active for any product at any given point in time. However, only one version at a time is applied. The applied version is selected based on time, site, or quantity. However, different versions can exist based on product dimensions, such as color, size and configuration. For planning, calculation, and consumption purposes, each BOM line must specify whether the item has any configurations. A configuration is a standard component combination, such as a satellite speaker and a sub-woofer that can be specified for a BOM item during the ordering process. The BOM version enables ongoing changes to be made to the item and different configurations to be employed depending on the manufacturing circumstance. Version control also supports phasing out of old components so that new components can be produced or bought. Version control methods allow you to start and stop the production of selected BOM versions. All BOM versions have an expiration date. However, this date can be preempted if you validate a new version. The validation of a BOM version automatically tells the system to phase out the old version and to make the new one active. The system then immediately starts to plan and buy based on the information in the new active BOM version. For example, a company, decides to start production of their best seller, a subwoofer model, at their second operational site. Therefore, a new BOM version of this subwoofer model, identical to the main version but for a different site, is created, approved, and activated. Besides making a version active or inactive, Finance and Operations offers several other ways to control which BOM version is used in production. These methods include the following: www.dynamicscompanions.com Dynamics Companions

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•

Date and quantity

•

Site control

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Legal entities can create multiple BOM versions (identical in quantity and dates), that are produced at different sites. When this is the case, you can create a BOM version in the BOM line page and specify the site for which the BOM version is valid in the Site field. (If site is not specified, the BOM version is valid for all sites.) Version control based on site allows you to control which BOM versions are ready for production depending on the site on where they are produced. Legal entities can assign a BOM to multiple products or versions, depending on where it originates and if the product must go through different manufacturing processes. For example, the product may be processed by different resources or have different routes. It is common industry practice for legal entities to use the same ID to create a product at different sites, by using different routes. To support this situation, you can define a general BOM version that does not specify a specific site or warehouse. In this situation the BOM line consumption is assigned to the resource and becomes a part of resource consumption. The resource references a production unit, which also states the picking warehouse.

BOM levels A single-level BOM consists of the immediately subordinate components that are necessary to build the product and does not contains sub-assemblies. When a BOM contains another BOM as its component, then it is known as a multilevel BOM, where the sub BOM is referred to as level one and its components as level two. BOMs can consist of as many levels as necessary, depending on the type of product being produced. A multilevel BOM is often illustrated graphically in a tree or outline structure.

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In Finance and Operations, BOMs can consist of as many levels as necessary, depending on the type of product being produced. That is, any given component in a BOM can also be set up to contain a BOM of its own. Complex BOM items frequently have several sub-BOMs. The number of levels, or sub-BOMs, a BOM has depends on how the item is managed. Generally, an item needs its own level in the BOM if, at a stage, the item must be: •

Tracked

•

Stored

•

Sold

Example Adult bicycles consist of two wheels, a seat, handlebars, and a frame. All these components are reflected in the bicycle BOM. However, the frame also consists of several discrete items (three or four tubes welded www.dynamicscompanions.com Dynamics Companions

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together). Therefore, the frame has a BOM of its own. It is known as a sub-BOM, that is, a BOM within the BOM for the end-product, the bicycle. Assume that a BOM is created to assemble bicycles. The following items are set up as the product type. The products types are used in the BOM and do not require assembly. •

Wheels

•

Seat

•

Handlebars

The bicycle frame is assembled in production. This part of the process is set up as a BOM. However, a subBOM includes the following items: •

Tubes

•

Welding wire

•

Brackets or brace

Site specific BOMs and routes Site specific BOMs and routes are created to allow for the automatic selection of the correct BOM, route version, and product dimensions when working with multiple sites. The main elements of this feature are: •

BOM and route selection, based on the site and product dimensions, is considered in master planning.

•

For BOM versions that are not site-specific, the user can select the Resource consumption checkbox on a BOM line, as an alternative to the issuing warehouse as stated on the BOM line.

It is common practice for the same BOM to be used to produce an item at different sites, using different routes. To support this, you can define a general BOM version that does not specify a site or a warehouse. The resource, through its assigned resource group, references a production unit, which further states the picking warehouse. Production at multiple sites may involve a BOM whose component items can be produced at and moved between different sites, and the sites share common item numbers. BOM versions for the component items must be structured to support the mandatory site dimension. A finished product can be set up so that part of it can be made at a different production site. When multiple sites share inventory that have the same item number, the BOM and the route can be set up so that the components of these items can be produced at a different site. When this feature is used, the corresponding routes must also be defined based on site. When planning materials and resources in an environment that has multiple production sites, the system selects the BOM version and the route version based on the site of the requirement, a valid date interval, product dimensions that are active for the item and the quantity.

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BOMs in the product lifecycle In the product lifecycle, many types of BOM might be created for various reasons: •

Sketching/Draft BOM - This BOM gives a draft estimation of required materials in an early design phase and helps you do a rough estimate of cost and estimated product attributes.

•

Engineering BOM - This BOM is typically used when you design products that are based on existing product portfolios. Engineering BOMs are structured to simplify the design process and group complex products into engineering modules. For simple products, it might be possible to engineering BOMs for the actual production process. However, for other products, the engineering BOM must be converted to an actual production BOM. Engineering BOMS are typically represented by phantoms in the BOM hierarchy. Although engineering BOMs can be used for the planning and execution of manufacturing operations, this approach can lead to inefficiencies, especially in repetitive operations where many orders are created.

•

Planning BOM - This BOM is used to do planning for material requirements. The demand of components and ingredients is calculated based on the demand of the finished products. Like costing BOMs, planning BOMs might represent a specific mix of material that is used in a period.

•

Production BOM - This is the actual BOM that is used for a specific production. A production BOM must take into account the actual resources that are used to produce the product. When a production order, batch order, or kanban is created, the multiple levels of BOMs that are represented by phantoms are collapsed into one level and distributed over the operations for the order.

•

Costing BOM - This BOM is used to calculate the estimated cost of a product. For example, you can use a costing BOM when standard cost is used, or the estimated planned cost of a given product is calculated. Costing BOMs can refer to a specific mix of materials and resources that is expected to be used. Therefore, you can use the costing BOM to create a representative estimated cost for a period and help avoid variances over time.

The types of BOM that are used in an implementation depend on the implementation, and on the business scenarios and requirements. In simple implementations, a planning BOM, production BOM, and costing BOM can be modeled as one BOM. In environments that have frequent engineering changes and multiple alternative routes, a larger set of BOM types will probably be required. The overall process of creating BOMs is listed here: 1.

Create the finished product which will be linked to the BOM via the BOM version.

Create all products that will be components of the BOM.

Create the BOM.

Create BOM version(s) that associates the finished product and the BOM, then approve and activate it. This is performed either before or after the component products are added.

Add products to specify which items to include in the BOM. These are BOM lines.

If it is necessary, create configurations and associated rules for the BOM.

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Create site specific BOM/routes to allow for the automatic selection of the correct BOM and route version, as well as the item dimensions, when working with multiple sites.

Working with BOM and item configurations Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/5-working-bom-item-configurations The purpose of BOM and item configurations is to enable accurate inventory management and master planning for each item. This unit provides information about the BOM item configuration and gives an overview of the BOM calculation structure and the setup required for running calculations. It also explains how to configure a BOM in Finance and Operations. If a product comes in several different variations, for example, colors, models, or sizes, and each product must be tracked, you can either: •

Create a new item number for each variation

•

Make configurations for the product

The advantage of using configurations is that only one item number is required for the BOM. Also, because the base data is the same for all configurations, only the information pertaining to the basic BOM must be maintained. However, relevant product configurations must be specified for each item transaction. For example, the Subwoofer model 03, produced by the company USMF, is a BOM. The black and silver subwoofers are the two configurations of this model. This means that they have the same item number as the Subwoofer model 03, but each has its own configuration number.

BOM configurations Use BOM configurations to set up a standard component combination specified for a BOM. If a BOM will be produced in several different variations, either a new item number can be created for each variation, or you can set up a BOM configuration for the item. For example, if a home video system will be sold in different colors, models, or sizes, and each product must be tracked, then this must be done. As new items can significantly increase the number of products maintained in inventory, it is good practice to use BOM configurations. Even though configurations can be created and maintained for all items, configuration groups, configuration rules, and configuration routes only apply to BOMs. To set up BOM configurations you need to create configuration groups, configuration routes, and configuration rules.

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Definition of configuration routes There is a difference between configuration routes and production routes. Production routes define how to process several different job types, such as setup, process, and queue jobs. Configuration routes are used during scheduling, job management, working time calendars, and capacity reservations. Configuration routes specify the sequence in which a BOM is configured.

Product configurations When a product is available in different variations and all configurations have, for example, the same price or delivery time, it is good practice to use product configurations instead of creating many individual items that follow the same pattern.

Scenario The company USMF has many home theater systems that are produced in the same manner. These home theater systems offer various features that are interchangeable. For example, they offer different colors and sizes of DVD players and subwoofer models. When the order processors use product configurations, they only need to set up one item for the DVD player. This allows them to provide their customers with the available combinations of DVD players and subwoofers.

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Configuration routes can also be set up to determine the sequence in which configuration combinations are made, and configuration rules can be set up to prevent the selection of invalid combinations.

Configuration groups In Finance and Operations, you must create the configuration group before creating the BOM lines. Configuration groups are used to group the item numbers in the BOM. To configure a BOM, select one item from each configuration group. When you use configuration groups, the system selects the BOM line specified in the configuration group on the BOM. For example, consider that a bicycle is available in two colors: red and blue. Because there are two bicycles, it may be logical to create two BOMs, each with its item number (color) on the BOM lines. However, you can also select to create one BOM for the bicycle where a choice can be made between the two colors. In this case, the two items on the BOM lines are allocated to the same configuration group that can be called, for example, colors. In this manner, two configurations, one for each color, can be created for the BOM. The BOM, the bicycle, is entered on a sales order line, and the desired configuration. In this case, the two items on the BOM lines (colors) are allocated to the same configuration group that could be named Color.

In this manner, two configurations, one for each color, can be created for the BOM item. The BOM item number, a bicycle, is entered on a sales order line, and the desired configuration, of the bicycle color, is set up in the Configure item page. The selection of a configuration in a configuration group determines which component is included in the specific BOM.

Configuration routes Configuration routes control the sequence in which item configurations are selected. For example, the size of the subwoofer model depends on the type of injection molded speaker model and the size of machine screws that are used. Therefore, it is logical that the first selection is the Housing configuration group. The second selection will then be the Fasteners configuration group.

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Configuration rules When all BOM components are in configuration groups, configuration rules can be set up for the BOM. Configuration rules are created for each configuration group and item number in the group in each BOM, and can help you in the following situations: •

Determining a correlation between the individual configuration groups and item numbers in the BOM.

•

Ensuring that item numbers that do not have any logical links are not selected incorrectly.

•

Simplifying the definition of configurations, because an item number that is directly linked to another item number is automatically selected as a connected unit in system transactions. You can use configuration rules to restrict certain combinations of items in a BOM configuration.

Existing configurations are not affected by changes made later to the configuration rules. However, we recommend that you set the rules before defining a new configuration, or check them to see if the rules need to be changed.

For example, a new home theater system in production will not be made with a black DVD player and a silver-satellite speaker model, because this has proven to be a poor seller. When Susan, the Order processor, creates an order for a home theater system, she first selects the DVD option, and then the satellite speaker option. Because the rules are set up to limit the combination of features for this system, Susan can only select a DVD player and a satellite speaker model that go together. In this case, a home theater system with a black DVD player and a silver satellite speaker model is not an available combination. If a customer requests a home theater system with a black DVD player and a silver satellite speaker model, the order becomes a special-order item and the order is sent to the Product configuration tool for configuration.

Item configurations When an item is available in different variations and all configurations, for example, the same price or delivery time, it is best practice to use item configurations instead of creating many individual items.

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The principle of a configurable item is that all the components that are used are specified for all configurations in one common BOM. By assigning configuration groups on BOM lines, users can specify the BOM lines that must be used for each configuration. When you enable the configuration dimension, specify the configuration dimension whenever specifying the item number. The following configurations are available: •

Predefined variant - Variants are configured by using the product dimensions when the variants are created. That is, any time after you created the product master you can assign product dimensions that are active on the associated product dimension group to the product master and create variants based on the product dimensions.

•

Dimension-based configuration - Variants are configured by using the Configuration dimension when the variants are applied on transaction lines. The Configuration dimension must be active on the product dimension group that is associated with the product master.

•

Constraint-based configuration - Variants are configured by using the Product configurator when the variants are applied on transaction lines

You can also create product variants automatically by selecting the Generate variants automatically check box, which allows automatic creation of variants when you assign new product dimensions to a product master. You can use this option with product masters where the variant configuration technology is Dimension-based configuration or Predefined variant.

BOM calculation BOM calculations determine the prices associated with a BOM. When you run BOM calculations, you can view the estimated BOM prices on all BOM levels and if necessary, update them on the BOM.

Scenario Ellen, the Warehouse manager needs information on inventory evaluation for the next year. She asks Vince, the Operations manager to determine the planned cost by using the new costing version. A BOM calculation, run on the costing version, calculates and inserts the standard costs for a manufactured product in the version. Frequently, Ellen receives the following types of requests regarding inventory: •

Sales prices of items in different quantities.

•

Comparisons of different item prices.

•

Verification of profit margins and contribution ratios.

•

Investigation of large price differences when different quantities are ordered.

•

Determination of the optimal run size for a BOM.

For each of these instances, she runs the BOM calculation to manage the requests and then modifies the inventory items accordingly. www.dynamicscompanions.com Dynamics Companions

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BOM calculation structure To set up BOM calculations, consider the following conditions: •

Create cost groups before definition of profit settings.

•

Define profit settings before sales price calculations are run.

•

Set up calculation groups before BOM calculations are run or viewed.

•

Set up costing version to run specified BOM calculations.

The BOM structure shows: •

How a single item or operation contributes to the price of its BOM level.

•

How all items and operations on a level contribute to the overall price.

•

An overview that displays summarized costs for cost groups.

Calculation group settings By assigning calculation groups to items, you can specify how a cost and sales prices are calculated. You can also assign a BOM calculation group to items so that a BOM calculation will generate warning messages about potential sources of calculation errors. When the elements of the calculation group are set up and assigned to a default value, BOM calculations can be run. To set up calculation groups, click Cost management > Predetermined cost policies setup > Calculation groups. Calculation groups contain the settings that are used in BOM calculations, including: •

Cost group

•

Item sales price

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Cost groups Cost groups provide a breakdown of expenses across items and cost categories. You can create cost groups and group the following related BOM costs: •

Resources

•

Wages

•

Materials

•

Overheads

•

Setup and run time in routing operations

When a BOM calculation is run, cost groups determine how expenses are distributed between the BOM components and the different cost groups. In other words, cost groups determine how much has been consumed in terms of resources, wages, overheads, and materials. By using cost groups, you can calculate the sales price for the BOM. You can also assign one or more profit-settings to each cost group so that Finance and Operations can calculate a suggested price for a manufactured item that is based on a cost-plus-markup approach. The profit-setting percentage specifies which percentage the system adds to the cost price when the sales price is calculated.

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Profit settings The Profit setting field in the Cost groups page, on the Profit tab, determines how large the profit percentage attached to cost items or cost categories within each cost group is. The field is also used to determine the sales price based on the calculated production cost when BOMs and cost categories for routes are calculated. Companies can set up the following profit settings to be considered in BOM calculations: •

Standard

•

Profit 1

•

Profit 2

•

Profit 3

Cost breakdown You can set up cost breakdowns for manufactured items (such as material, labor, and overhead) that do not get posted to the general ledger by inventory transactions. They can, however, optionally be identified in the inventory sub ledger. You can specify this by going to Inventory management > Setup > Inventory and warehouse management parameters > Inventory Accounting tab and selecting whether to use the sub ledger in the Cost breakdown field.

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The cost breakdown feature enables the tracking of the cost composition of items held at standard cost across production levels, for planned, estimated and actual costs. Product cost, production costs, inventories, Work in Process (WIP), cost of goods sold, and cost composition can be analyzed and rolled up in their original cost groups. In planned cost, production estimate and production costing calculations, and user-defined cost groups linked to the resources enable the collection and classification of costs contributions. Upon valuing manufactured components' cost contributions at standard costs, Finance and Operations inserts the summarized standard cost decomposition for each cost group. This enables the compilation of the multilevel rolled up cost decomposition for each cost group of the product and production cost.

Costing on the BOM Bills of material calculations use data from several sources to calculate the standard costs of a manufactured item. The sources include information about items routing details, indirect cost calculation formulas, and the costing version. The purchased item information that is used in a standard cost BOM calculation includes cost, cost group, and warning conditions. The manufactured item information that is used in a standard cost BOM calculation includes standard order quantity for inventory and warning conditions that are embedded in the item's BOM calculation group. The bill of material information that is used in a standard cost BOM calculation depends on the following: •

BOM version

•

BOM line item quantity

•

BOM line item scrap

•

BOM line item valid dates

•

The default order type of the BOM line item

•

Parameters for the cost calculation

•

Sub-route for a manufactured component

•

Operation number

•

Impact of operation scrap percentages

The user can ignore BOM line item in cost calculations if required. The costing version information that is used in a standard cost BOM calculation includes costing type, mandated fallback principle, blocking flag for pending costs, specified site, and the start date.

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Create a bill of materials (BOM) Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/6-create-a-bom Simple BOMs that are not yet associated with items, or that are in the initial planning stages, are created in the Bills of materials page. This unit includes how to create a BOM without a version. You can create and modify as many simple BOMs as you want to, without having to worry about attaching any items to them. This is useful for new orders that are in the initial planning stages. If a BOM does not yet have any associated items, it can be created in the Bills of materials page. The Bills of materials page is divided into an upper and a lower section (The upper section shows the BOMs that are in the user's company, and the lower section shows the BOM versions that are defined for each BOM that is selected. To open the Bills of materials page, go to Product information management > Bills of materials and formulas > Bills of materials.

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The BOM designer provides a visual tree structure view of a BOM. It is accessed directly from either the Bills of materials page or the Released products list page. The BOM designer is an alternative for users who prefer to work with BOMs by using a graphical user-interface (GUI) instead of a linear one.

Scenario: create a BOM for a home theater system The company USMF wants to start manufacturing a new model of home theater system, but they do not have any inventory items available yet. Linda, the assistant to the Product designer is asked to create an initial BOM so that management can determine whether production can start. Linda creates a single-level BOM, named "Home theater system" without a version in the upper pane of the Bill of materials page. She also creates component items for the home theater system by clicking the Lines button and using the BOM line page. After the component items are added, the BOM is approved. When creating a BOM, assigning material consumption to the resource is useful when the BOM version does not refer to a site, but is valid for all sites. In this situation, define a different picking warehouse for each site in the Warehouse field. If the Resource consumption check box is not selected and the Warehouse field is blank, the picking warehouse is taken from the item master data. After creating BOM lines, you need to specify quantity and configuration groups. In the Quantity field, type the number of items that are included in one unit or one series of the BOM item. If the quantity is calculated for each series, indicate the basis of the series in the Per series field. For example, if a BOM item is generally referred to in 100-pound packages and there are ten pounds of component item A in each 100- pound package, the quantity will be ten for every series of 100. Quantities on BOMs can be used to control which version of the BOM is used in production. For example, if less than 500 pieces of a BOM item are ordered, version 1 is used; when more than 500 pieces are ordered, Version 2 is used. In the Configuration group field, select the relevant group for the item. The value in this field depends on the product subtype and the configuration technology that is defined for the product. In the Unit field, view the BOM unit as specified in the BOM unit field, which is on the Engineer FastTab in the Released products page. After all BOM lines are added to the BOM, the BOM must be approved and activated to be used in production.

Working with BOMs in the BOM designer The BOM designer page can also be used to work with BOMs. The BOM designer functionality is different depending on where in Finance and Operations it is accessed from. To create simple BOMs, the BOM designer is accessed from the Bills of materials page. It can also be accessed from the Released products list page. However, when this is the case, it is used primarily to create and work with BOMs that are associated with inventory items.

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Use the BOM designer to perform the following actions: •

Create new BOM versions or edit the existing ones.

•

Edit and delete BOM lines.

•

Check BOMs for errors, for example, BOM circularity.

•

Check which BOM versions (if there are any) are attached to the selected BOM.

•

Check at which sites the BOM versions are assigned.

•

Print BOM and BOM lines for the selected BOM.

•

Verify the site to which the BOM line belongs.

When you access the BOM designer from the Released products list page, you will connect a BOM to a certain item. It enables a user to create or edit BOM versions and assign items or sub- BOMs to specific operations.

Copy BOM Versions When the BOMs are similar in Finance and Operations, the copying functionality can simplify the creation of new versions. You can copy existing BOMs in the Copy BOM/route page. Additionally, you can copy the existing BOMs from base data or production. After you copy the BOM items, you can change or delete the BOM lines that do not correspond to the new version, and then insert new lines. If the existing BOM contains configurations, the system also copies the configurations, along with their rules and routes to the new BOM.

Production orders Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/7-production-orders The production order contains information about what is to be produced, how much, and the planned finish date. Finance and Operations assigns an order status to each step in the life cycle of the order. This unit explains how to create a production order. In companies where production is conducted in-house, production orders are often created to: •

Meet sales demand when inventory is insufficient.

•

Supply BOM as sub-assemblies to other items in demand.

•

Meet a demand that is foreseen by authorized personnel.

•

Meet forecasted end item demand.

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When an order is first created, it is automatically assigned the status Created. The status shows where the item is in the production process. There are three ways production orders can be created in Finance and Operations: •

To create a production order manually - You can create production orders in the Production orders list page by clicking Production control > Production orders > All production orders.

•

Create a production order directly from a sales order line from the item - You can create production orders directly from a sales order by selecting the sales order line and clicking Product and supply > production order. When a production order is created directly from a sales order line, the information in the order automatically contains the valid date and quantity ranges. This does not have to be set up manually. If changes must be made after the production order is created from a sales order, they must be made manually.

•

As a result of a planned order in requirement calculation - Production orders are automatically created when master planning is run and the planned production orders are firmed. You can select the production status you want to assign to the "Resulting" production orders and time fences. To define these and other parameters that guide the behavior of planned orders, click Master planning > Setup > Coverage > Coverage groups > Other.

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Consider the following fields when creating a production order: •

Production - This field displays the production order number. This is a unique identification of the production order. When new production orders are created, the number is either allocated automatically or entered manually.

•

Item number - Displays a unique identification of the item to be produced. This field cannot be changed. The item to be produced is defined when production is set up.

•

Quantity - Contains the scheduled production quantity.

•

Report remainder as finished - Displays the number remaining to be reported as finished.

•

Delivery - Displays the desired delivery or finish date for the production. Use this field to adjust the production's Operations or Job scheduling, where scheduling can be performed backward www.dynamicscompanions.com Dynamics Companions

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from delivery date. When you are conducting Operations scheduling or Job scheduling for a production order that has automatic creation of pegged orders for components defined in the BOM, the delivery date for the under-productions is automatically set to the date the items are used in the production. •

Status - Shows exactly where the production order is in the overall production cycle. The production status is automatically updated every time that updates or scheduling is run on a production order. The typical life cycle of a production order begins with the start of the production process when the order is first created. The order is automatically assigned the Created status at this point. Status updates for subsequent phases include: Estimated, Planned, Released, Started, Reported as finished, and Ended.

•

Remain status - Shows the remainder status on the production order

•

Reference type - Displays connections to other orders, including the item reference type of the production. If the production order is created directly to an order line, Sales order is displayed. If the production order is created for a purchase or a project, Purchase order or Project is displayed. If there is a reference to another production order, Production is displayed. You cannot update this field.

•

Pool - Production pools are used to group productions with similar characteristics, for example the type of item to be produced or the person who created the production orders.

•

Locked for rescheduling - Whether the production order locked for re-scheduling.

Production order details page The General tab in the Production orders page is used to view or modify general identification and production information, status, scheduling dates, and production pool groupings for the selected production orders. Use the Setup tab to define the criteria you want to use to process the production order. These include the date that the BOM becomes effective, the route number on which the production order is based, production scheduling information, the method for posting the order to the ledger, and the measurement factors on the item being produced. You can view all related production orders, including the number of the top-level production orders that the specific production order is a component of, and the alphanumeric identifier of the planned order. The References tab in the Production orders page contains information such as Reference type. If the production order is created directly to an order line, the sales order is displayed. If there is a reference to another production order, the production order is displayed. The Update tab contains fields with information relating to posting, inventory, latest scheduling, and quantity. You can view the latest updates to the current production order. The Inventory Dimensions tab is used to view or change information about the Product, Storage and Tracking dimensions that the production order is associated with.

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The Financial Dimensions tabs are used to view or change information about the department that the production order is associated with, its cost center, and its purpose. The Warehouse tabs are used to view or change information about selection of Release to warehouse value to either partially or fully reserve raw materials for a warehouse managed by warehouse management module.

Estimation Use the Estimate page to select a production order and run an estimate of how much it will consume in material and capacity costs. This is a mandatory step in the production life cycle and occurs after a production order is created. If you do not run cost estimation, the system calculates it automatically before it continues with the next step.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

The process of estimating a production order provides the projected material and capacity consumption costs for producing an item in the production. Its basic function is to estimate item and route consumption in connection with the production process. These estimates form the basis for subsequent scheduling and production cycle processes. The estimation run calculates the following values:

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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•

Production cost - This is the top line of the estimate. It shows the complete cost of running the production and the total sales price for the production. It is the sum of all the cost lines on the estimate.

•

Route or work center costs - These are the costs for the operations involved in a production, including elements such as setup time, run time, and overhead.

•

Material costs - These are the costs and prices of the BOM components that are needed to produce the item.

Automatic estimation and scheduling As a part of the production life cycle steps, if a production is not already cost estimated or scheduled before it is ready to be released, Finance and Operations can be set up to run the estimation and scheduling steps automatically. Wait as long as you think it is practical to change your orders with the status Scheduled to status the Released. This is because scheduled orders can still be rescheduled without having to recall various versions of printed production papers that are typically printed out during the change of status. When a production is released, you can start a job that can be set up as a batch or night job, which prints all route cards and job cards. This is common in companies with many daily production orders.

Release production orders After you estimate and schedule (or reschedule) the production order, the production order is ready for release. When a production order is released, it leaves the front office and is made available to the shop floor for production. The fields in the Overview tab of the Release page are: •

Production - Specify the production number to be released. If you selected Release from the Production orders page, the fields are automatically filled in with the current production and the Name field is displayed. You can select any production that does not have the Reported as finished or Cost accounted status.

•

References - If this check box is selected, references associated with the production are released under the same conditions that apply to this one. Only the current and any underlying productions are released.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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To release all productions in the production hierarchy when you release the main production, indicate that references must be released. You also can release specific productions in the hierarchy and its underlying productions in the same way, by releasing the specific production and indicating that the underlying references must also be released.

Start production orders When the production order is released, and reports are created, the next step is to start the production order. You can start all the operations in the production order, or only some, and save the rest until later. When the order is started, its status changes to Started, regardless of whether the complete production or only part of the production is started. To start a production order, click Production control > Production orders > All production orders. Select the necessary production order and click Start from Action pane. Once the production status changes to Started, pick the items that are composing the production's BOM. (The printout of the items involved in a production is called the picking list.) By default, the system suggests starting the quantity not yet started. Item and route consumption can also be picked in connection with Start.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

You can change a production order with the status of Release or Start. For example, you can change the BOM or route. However, if the change affects costs or scheduling, you must recalculate consumption and reschedule the production. You can do this by running an operation scheduling or job scheduling update.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Report production orders as finished Use the Report as finished page to report all or a part of a production as finished. When you report an order as finished, it receives the status Report as finished. This allows for the items that are reported as finished to be available in inventory and frees resources to schedule other production tasks. The report automatically sends information about the quantity of items produced, the number of units in error, and the cause of the errors. If a production has not been through the update steps in the production life cycle, Finance and Operations does an automatic update. These updates can include the following steps in the life cycle: •

Estimation

•

Scheduling

•

Release

•

Start

End production orders The final step in the life cycle of a production order is End. When production is complete and orders are formally ended, they are also cost-accounted. A receipt transaction with the Purchased status is generated for the production item. This transaction covers receipts for items that were created and have the status Ordered, items that were reported-as-finished and have the status Received, and receipt transactions that were generated earlier are deleted.

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Previously posted items and work in process (WIP) are automatically reversed in the ledger and all journals are posted and closed. Actual costs are calculated when a production is ended. These costs are based on realized material and time consumption. You can compare actual costs to estimated material and time consumption costs that were calculated when the production order was estimated.

Final price calculation Final price calculation covers the following: •

Consumption of items: The cost amount for item consumption is calculated as Component item consumption * Cost price = Realized cost amount.

If the consumed items are not open-transaction marked, the average cost is used. The item's cost price is taken from inventory. However, if the item is open-transaction marked for a receipt transaction with the Purchased status, the item's cost price is taken from that receipt transaction. For costing of the item consumption, the program issues a transaction with the Sold status. The original issue transaction with the On order or Picked status is deleted. When production order comes to the costing, all products with type item or service in the BOM are handled the same way. •

Finished items - The cost amount for finished items is calculated as Number of finished items * Item's cost price = Realized cost amount.

The item's cost price is taken from the item when you calculate costing. During the costing of item gains, the original inventory transaction is updated to the Purchased status from Ordered or Received. •

Consumption of operations - (Reported time consumption * Reported hourly cost price) + (Reported processed quantity *Reported quantity cost price) = Realized cost amount.

Operation consumption includes run times, setup time, and processed quantity The cost amount for the consumption of run time, setup time, and processed quantity is calculated as follows: •

When you select automatic picking of resources, the cost price is retrieved automatically from the run time category, setup category, and quantity category that are stated on the route.

•

If the number of finished items has been reported for the operations by using the report-asfinished journal, these items are the ones used in costing.

When the production order is assigned the Ended status and can no longer be updated. The production order is cost accounted, and a receipt transaction with the Purchased status is generated for the produced item. All journals associated with the production order are closed.

Exercise - Create a simple BOM without a version Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/8-exercise-create-simple-bom-without-version www.dynamicscompanions.com Dynamics Companions

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As a new assistant to the Product designer at the company USMF, you are asked to create a simple BOM for a new Light cabinet. Use the following specifications and approve the BOM by using employee 000020, Julia Funderburk, and use the following parameters: •

Name: Light Cabinet

•

Item group: Audio

•

Site: 1

•

Item:

•

M0005 Enclosure

•

M0006 Binding posts

•

P0002 Speaker Damping Foam

•

Quantity for each item: 1

Before you begin To get the most benefit from this and other exercises in this module, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS). 1.

In USMF, go to Product information management > Bills of materials and formulas > Bill of materials.

Click New.

In the Name field, enter 'Light Cabinet'.

In the Site field, enter or select 1.

In the Item group field, enter or select Audio.

Click Save.

Click New.

In the Item number field, enter M0005.

Click New.

10. In the Item number field, enter M0006. 11. Click New. 12. In the Item number field, enter P0002. 13. Click Approval. 14. Select 000020, Julia Funderburk. 15. Click OK. 16. Click Save. 17. Close all pages.

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Exercise - Create a BOM in the BOM Designer Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/9-exercise-create-bom-bom-designer You have received a new specification for the enclosure side item. You need to create a simple BOM with component lines. Create a BOM titled "High Quality Speaker" and assign it to the Audio item group at Site 1. Use the BOM designer to add the following items and quantities from the list and approve the BOM by using employee 000020, Julia Funderburk. Add items with Warehouse 11 and the following quantity: •

1 qty of M0008 / High End Cabinet / Black

•

2 qty of M0002 / Mid-Range Speaker Unit

•

1 qty of M0009 / Protective Corners

Then perform following steps: 1.

In USMF, go to Product information management > Bills of materials and formulas > Bills of materials.

Click New.

In the Name field, enter 'High Quality Speaker'.

In the Site field, enter 1.

In the Item group field, enter or select Audio.

Click Designer.

Click BOM lines.

Click Add to component BOM.

In the list, find and select M0008 / High End Cabinet / Black

10. Click OK. 11. Click BOM lines. 12. Click Add after line. 13. In the list, find and select M0009 / Protective Corners 14. Click OK. 15. Click BOM lines. 16. Click Add before line. 17. In the list, find and select M0002 / Mid-Range Speaker Unit 18. Click OK. 19. Close the page. 20. Refresh the page. 21. In the list, find and select the row for M0002 / Mid-Range Speaker Unit

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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22. Set Quantity to '2.0000'. 23. Click Approval. 24. Select 000020, Julia Funderburk. 25. Click OK. 26. Close all pages.

Exercise - Create a BOM with a version Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/10-exercise-create-bom-with-version The Sales department has identified a need for High Quality Speaker, with the color Rosewood instead of the Black. As the Product designer, you are asked to create a BOM item by using the following specifications: •

Product number - 72708

•

Product name - High Quality Speaker Rosewood

•

Item group - Audio

•

Item model group - FIFO

•

Storage dimension group - SiteWH

•

Tracking dimension group - None

•

Warehouse - 11

•

Approved by - 000020, Julia Funderburk

First, create a version named High Quality Speaker Rosewood. Because the configuration setting is the same as the item D0004, make a copy of the existing BOM. After the components are copied to the new BOM, remove item M0008 / High End Cabinet / Black and add item M0008 / High End Cabinet / Red for a quantity of 1. Do not activate the BOM because the item is not ready for use yet. 1.

In USMF, go to Product information management > Products > Released products.

Click New.

In the Product number field, type '72708'.

In the Product name field, type 'High Quality Speaker Rosewood'.

In the Item model group field, enter or select FIFO.

In the Item group field, enter or select Audio.

In the Storage dimension group field, enter or select SiteWH.

In the Tracking dimension group field, enter or select None.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

10. On the Action Pane, click Manage inventory. 11. Click Default order settings. 12. In the Default order type field, select Production. 13. Under the Inventory FastTab, in the Default warehouse field, enter 11. 14. Close the page. 15. On the Action Pane, click Engineer. 16. Click Designer. 17. Click BOM. 18. Click Create version. 19. In the Name field, type 'High Quality Speaker Rosewood'. 20. Select Yes in the Copy field. 21. In the Site field, select 1. 22. Click OK. 23. In the Item number field, enter or select D0004. 24. Click OK. 25. In the tree, select Item number 72708 / M0008 / High End Cabinet. 26. Click BOM lines. 27. Click Delete. 28. Click BOM lines. 29. Click Add before line. 30. In the list, find and select M0008 / High End Cabinet / Red. 31. Click OK. 32. In the tree, select Item number: 72708. 33. Click BOM. 34. Click BOM versions. 35. Click Approve. 36. Select 000020, Julia Funderburk. 37. Select Yes in the Do you also want to approve the bill of materials? field. 38. Click OK. 39. Close all pages.

Exercise - Create and process a production order Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/11-exercise-create-process-production-order www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Manually create a production for 10 pcs of Item: '72708' as follows: •

Use Production PRD_00000582.

•

Use Item '72708' (You must have completed the previous exercise).

•

Set Order quantity to 10 pieces.

•

Set the Delivery date to the current date plus four days.

•

Set the Delivery time to 10:15 A.M.

Then perform following steps: 1.

In USMF, go to Production control > Production orders > All production orders.

Click New to create a new production order.

In the Item number field, enter or select 72708.

Set Quantity to '10.00'.

In the Time field, enter 10:15 AM.

Click Create.

Click Estimate.

Click OK.

Click Release.

10. Click OK. 11. Click Start. 12. Click OK. 13. Click Report as finished. 14. Click OK. 15. Click End. 16. Click OK. 17. Close all pages.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/12-get-started-discrete-manufacturing-quiz

Get started with discrete manufacturing in Dynamics 365 for Finance and Operations knowledge check 1.

Which one of the following statuses of the production order indicates that the production can start.?

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

a) Create b) Release c)

Estimate

d) Schedule 2.

You need to calculate material and (labor) route consumption estimates and to create inventory transactions of a production order. With which one of the following statuses of the production order can you do this? a) Create b) Release c)

Estimate

d) Schedule 3.

You need to only count the components of the specific item in a BOM and not track the production order. Which BOM line type should you use? a) Item b) Pegged supply c)

Phantom

d) Vendor

Summary Link: https://docs.microsoft.com/en-us/learn/modules/get-started-discrete-manufacturing-indynamics-365-finance-ops/13-get-started-discrete-manufacturing-summary The Production control module in Finance and Operations is highly interactive with other modules and provides manufacturers with the tools and processes that are required to produce finished goods. Bill of materials (BOMs) are used in production to specify ingredients or subordinate components that are physically required to make each assembled part number or item in production, they are important to the functioning of the production life cycle and processes. The production process uses a BOM to specify the items used in the manufacturing process. The routes and operations define the process, machines, and tools used to convert those items into finished goods. The production order follows a life cycle from Created to Ended. As part of the production process, the production order is scheduled which creates a start date and end date for the production order. Master planning interacts with production to provide the Planner with an updated picture of what is needed to meet requirements and allows him or her to decide how to meet these requirements.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Module 3: Configure Discrete Manufacturing Before you can work in the Production control module, and create production orders, you must set up production parameters. The parameters you select have direct impact on the production order and the production life cycle. You can set the parameters by company or by site, which determines whether Dynamics 365 for Finance and Operations uses the company-level parameters or the site-specific parameters. Parameters, Production Orders and Life Cycle reviews how these parameters are defined, how journal names are used, how production orders are created, and the ways in which they are processed through manufacturing based on their status and the production life cycle. This lesson explains how to configure Discrete manufacturing in Finance and Operations. Lessons •

Introduction

•

Prepare general ledger for production

•

Configure production control parameters

•

Configure calendar and resources

•

Configure operations and routes

•

Practice lab

•

Module summary

In this module you learned how to: •

Configure inventory dimensions in production

•

Configure parameters, production orders and status

•

Configure calendars and resources

•

Configure operations and routes.

Configure discrete manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/ If you wonder how a product is created, or about what components it comprises of, or the operations that a product has gone through before being sent to a retail store, then this module is for you. As a functional consultant for manufacturing, you need to know how to configure Dynamics 365 for Finance and Operations for discrete manufacturing, so your customer can perform and control the production lifecycle. In this module, you will learn how to configure: www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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•

Inventory dimensions in production

•

Parameters, production orders, and statuses

•

Calendars and resources

•

Operations and routes

Introduction Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/1-configure-discrete-manufacturing-intro Before you can work in the Production control module in Dynamics 365 for Finance and Operations, and create production orders, you need to set up production parameters. The parameters you select have direct impact on the production order and the production life cycle. You can set the parameters by company or by site, which determines whether Finance and Operations uses the company-level parameters or the site-specific parameters. This module reviews how these parameters are defined, how journal names are used, how production orders are created, and the ways in which the parameters are processed through manufacturing based on their status and the production life cycle.

Configuring inventory dimensions in production Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/2-inventory-dimensions-in-production It is important to consider how you want your inventory to function prior to setting up the inventory dimensions and storage dimension. The type and number of inventory dimensions that you create must be a realistic reflection of how you categorize, or treat, each of the inventory items in your legal entity. Inventory dimensions are divided into product dimensions, storage dimensions, and tracking dimensions. Item inventory dimensions help define the physical characteristics of inventory items. The available product dimensions in Finance and Operations are: •

Configuration

•

Size

•

Style

•

Color

Storage inventory dimensions control how items are stored and taken from inventory. By using storage inventory dimensions, you can manage inventory on a detailed level.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Configure product dimensions Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/3-product-dimension Product dimensions allow the user to define color, size, and configuration values for the product. Product dimension requirements are defined for the product master, whereas storage and tracking dimension requirements are defined for the released products.

Product dimensions are characteristics that serve to identify a product variant. You can use combinations of product dimensions to define product variants. You need to define at least one product dimension for a product master to create a product variant. Product variants are the Finance and Operations version of an item dimension combination, or unique combinations of color, size, and configuration. The Product dimension group defines whether each product dimension is active or not, in addition to whether they are to be used in the price search for trade agreements or not. The product dimension group is assigned once when product master is created and cannot be reassigned.

Configure storage dimensions Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/4-storage-dimensions Storage inventory dimensions represent the different ways in which items are stored in, and retrieved from, inventory. This allows for inventory to be managed at a detailed level. The type of details that you apply to the creation of storage dimensions depend on your legal entity's needs and expectations. Consider the relevance of each dimension, especially when items have special handling needs. Some examples of different dimensions might the following: •

Dairy foods must be kept cool.

•

Pharmaceutical goods must be easily identifiable.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Ice cream has to be kept frozen.

Example A bicycle legal entity has several facilities that store and manufacture bicycle parts. At each facility, 10speed sprockets are stored in one bin, and 12-speed sprockets are stored in another bin. However, because bicycle frames sizes are easily determined, they are not segregated. Adult and children's frames are stored in the same racks. The legal entity wants to ensure that an accurate count of inventory is kept for all parts.

The storage dimensions available in Finance and Operations are: •

Site

•

Warehouse

•

Location

•

Inventory status

•

License plate

Mandatory Select the Mandatory slider on the Storage dimension groups page to make the dimension mandatory. A mandatory dimension appears on all journals and transactions, and you will need to specify a dimension value when you create an entry. The following rules apply: •

Product dimensions are always mandatory.

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•

When the multisite functionality is active, the site storage dimension is mandatory.

•

It is optional whether the warehouse storage dimension is mandatory.

•

You cannot specify the remaining inventory dimensions as mandatory.

Primary stocking To set up inventory dimensions as primary stocking, on the Storage dimension groups page, select the Primary stocking slider. (If you want it to be secondary stocking, leave the slider clear.) A primary stocking dimension will appear automatically on the On-hand and Reservation pages. This affects how ordered items are re-reserved upon physical item receipts. The following rules apply for reserving and updating items: •

The dimension must be specified when you are physically updating item receipts or issues.

•

When automatic reservation is active, items are reserved according to the selected dimension, providing that the dimension is also specified for the actual item transaction. This means that if the warehouse is specified on a sales order line, and primary stocking is specified, automatic reservation only reserves items at this warehouse.

•

Ordered reservations are not re-reserved upon physical receipt. If a sales order line is reserved at warehouse A and location 1, and warehouse is set to primary stocking, and location is set to secondary stocking, the sales order line does not automatically re-reserve if the warehouse is changed when the receipt is physically updated. If the location changes to 2, the order line automatically re-reserves for location 2.

Blank receipt and Blank issue allowed Select the or Blank issue allowed check boxes on the Storage dimension groups page to apply the following results: •

Blank receipt - If you do not select the dimension as primary stocking, selecting this check box leaves out the specification of the dimension when physical receipts are updated. This functionality is useful, for example, when you are not specifying the serial/lot number upon input, but doing so for picking and output.

•

Blank issue - If the dimension is not marked as a product dimension, or as primary stocking, selecting this field leaves out the specification of the dimension when you are updating physical issues.

Physical inventory Select the Physical inventory check box on the Storage dimension groups page to specify that the dimension is input to the on-hand inventory when Finance and Operations checks whether the item is onhand in inventory.

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Financial inventory Select the Financial inventory check box on the Storage dimension groups page to indicate that this dimension is part of the financial inventory. The parameter is of significance if you are not operating with financially negative inventory with the financial update of item issues, for example, invoice-updating in the Accounts receivable module. The system checks the financial on-hand inventory upon item issues according to the same logic that is described in the topic concerning Physical inventory. The Financial inventory parameter also determines how item consumption is calculated upon invoice updating, inventory closing, and cost accounting of the cost value.

Coverage plan by dimension Select the Coverage plan by dimension check box on the Storage dimension groups page to complete the coverage plan for the item individually instead of as a group. When you select the For purchase price check box on the Storage dimensions page, the search for purchase prices is based on the following rules: •

Search price for each item, product dimensions, and storage dimensions

•

Search price for each item and product dimensions (storage dimensions are blank)

•

Search price for each item (both product dimensions and storage dimensions are blank)

When you select the For sales prices check box on the Storage dimension groups page, the search for sales prices is based on the following rules: •

Search price for each item, product dimensions, and storage dimensions

•

Search price for each item and product dimensions (storage dimensions are blank)

•

Search price for each item (both product dimensions and storage dimensions are blank)

Configure tracking dimensions Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/5-tracking-dimensions Serial and batch numbers provide companies with the ability to trace their products through Finance and Operations. The numbers are used for the following purposes: •

Tracing

•

Quality assurance

•

Warranties

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Traceability is useful for quality assurance purposes and when you deal with warranties for a product. The tracing functionality is especially important for items that represent a certain risk, such as medicine or chemicals, where defects in production can lead to the item recall. It is equally important for guaranteed items to be able to trace back to the date that the product was manufactured or sold. Serial and batch numbers allow for this kind of functionality. You can assign serial numbers, batch numbers, or both to an inventory item. Serial numbers are assigned to individual items, where batch numbers are assigned to a set of items. Lot ID is the term that refers to a transaction, and not an item dimension such as serial and batch numbers. A Lot ID is assigned automatically to each sales or purchase line when you create it. The number is taken from the number sequence that is associated with the number sequence reference Lot No. in the inventory parameters. You cannot make transactions without a Lot ID being assigned, unlike using batch numbers, which you can either select to use or not.

Serial number control If you select the Serial number control parameter on the Tracking dimension groups page, Finance and Operations will only allow for inventory movements with a quantity of one. When you are physically receiving or updating items that arrive in the warehouse, the physical on-hand quantity plus the arrival quantity cannot exceed one. Physical inventory is automatically selected to handle the control correctly, and usually the Physical negative inventory field in the Inventory model groups page is clear. By tracking inventory dimensions, you can track items on the warehouse and outside by using the following parameters: •

Batch number

•

Serial number

•

Owner

Allocating batch and serial numbers You can use serial and/or batch numbers for all items, whether it is raw material, semi-finished items, or finished items, to track both the raw material and the finished item, regardless of the type of item that a legal entity manufactures. This is especially important for items with strict quality and manufacturing requirements, such as medicine, foods, or chemicals, because defect items must be quickly identified and recalled. Another use of the serial and/or batch number is to track the date of sale for items that are covered by a warranty. Serial and batch numbers are inventory dimensions. Therefore, you should assign them only to items that have tracking dimension groups where these dimensions are active. You can assign serial or batch numbers manually or automatically, depending on whether the item has a serial number that can be scanned into Finance and Operations, or whether the serial number should be assigned based on a serial number group. www.dynamicscompanions.com Dynamics Companions

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Example A company manufactures bicycles by welding aluminum tubes into bicycle frames. They receive aluminum tubes from a supplier who casts the tubes in batches. Each delivery of tubes to the bicycle manufacturer is marked with the supplier's batch number. The bicycle manufacturer creates a bicycle frame and wants to track each frame as it moves through the manufacturing and assembly process. To track the parts, the company does the following: •

Creates a number group for aluminum batches that allows for manual allocation of a number.

•

Enters supplier batch numbers manually in inventory transactions for aluminum tubes. (In practice, it is best to use serial numbers.)

•

Creates a number group for bicycle frames that disallows manual allocation.

•

Enables Finance and Operations to automatically assign a serial number for each bicycle frame inventory transaction.

Production order reservations Viewing the specific lots that are used in a production can be useful. For example, if you have a finished item in production that has a material defect, you need to know from which purchase order and lot the raw materials originate. The component items that are used on BOM lines can be tracked by serial or batch numbers if the component item is assigned to a tracking dimension group where these dimensions are active. You can set it up as either a primary or secondary dimension by selecting Product information management > Setup > Dimension and variant groups > Storage dimension groups, and then selecting the Primary stocking option.

General ledger and manufacturing integration Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/6-gl-manu-integration Production control is integrated with features in other modules. This interconnectivity lets you change production orders and ensures that they are automatically updated in all other related processes and calculations in the system. This unit focuses on the General ledger settings Information in other modules must be set up before you can work with Production control. This setup includes the following tasks: •

Set up general company information.

•

Set up the general ledger.

•

Define item groups.

•

Set up ledger accounts for item groups.

•

Set up the Inventory item table in inventory management.

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•

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create bills of materials (BOMs) and BOM versions in inventory management.

Production order ledger settings determine how production order transactions are posted in the ledger for items and work in process, in addition to the costing of the production order. You can use the All production orders page to define ledger settings. To do so, go to Production control > Production orders > All production orders, select the production order number, and then select the Setup tab. Choose a setting from the following options in the Ledger field: •

Item and Resource - The posting of item consumption is as specified on the Item group page. Operations resource consumption posting is based on the value on the Resources and the Resource groups pages.

•

Item and Category - The posting of item consumption is as specified on the Item group page. Operations resource consumption posting is based on the value on the Cost categories page. A cost category is attached to an operation in the route and, when a production order is created, it is copied to the current production.

•

Production groups - When you specify this ledger setting, a production group must be assigned to the production order on the Production groups page. When that is completed, item consumption and resource consumption are posted exclusively to the ledger accounts that are specified in the assigned production group.

You can change the production order's ledger setting, which is displayed on the All production orders page on the Setup tab, provided that the order has not yet reached the Reported as finished status. If the production posted physical values, that is, if the item has an inventory model group in which the Post physical value is set, the ledger posting must not be changed after part of the production finishes.

Default ledger settings You can define a ledger setting as your default value on the Production control parameters page by going to Production control > Setup > Production control parameters > General tab, and selecting the setting in the Ledger posting field. The default value will be automatically assigned to all subsequent production orders that were created from a sales order line, master planning, or sub production orders. In addition, when you manually create a production order on the Create production order page, the value in the Ledger field will also be pre-populated with the default value. You can override it by selecting another value from the list of options.

Production journals Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/7-production-journals Production journals are used to report item consumption, route consumption, and finished items. They are a direct link to the ledger system because posting these journals involves posting to the ledger. www.dynamicscompanions.com Dynamics Companions

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Journal transactions are posted in the General ledger based on the ledger setting for the production order.

Production journal types Production journals contain a record of each of the different types of item transactions that occur when you are working with production orders. These item transactions have a direct effect on the company's financial records. Locate the production journals by selecting Production control, selecting Journals, and then selecting the journal type from the list. Go to Production control > Setup > Production journal names to create production journals. The production journal types include the following: •

Pick list - This journal is a record of the raw materials that are drawn out of inventory.

•

Route card - This journal is a record of the route consumption.

•

Job card - This journal is a record of the resource consumption by using feedback job cards.

•

Report as finished - This journal is a record of all finished items.

When a production journal posts, all item transactions are automatically transferred to the General ledger. Information that is posted from various journals in the system is used in the General ledger when companywide financial transactions are calculated. In general terms, production journals are composed of the production journal and the journal lines. The production journal is the highest level of the journal model, and includes the following information: •

Journal type

•

Journal name

•

Journal number

•

The status of the journal.

•

Explanations about how the journal is posted.

•

Whether the journal is allowed to deduct negatively.

•

Whether errors are to be accepted, along with other information.

The production journal lines are the lowest level in the journal model of the production system. To access the journal lines, select the Lines button in the relevant production journal. The lines represent the actual reports that are connected with the production material, such as the release, time consumed, good quantity, and so on.

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Consider the following options when you are setting up the parameters: •

Mandatory cost category for quantity - Include the quantity costs category in the route and job card journals.

•

Mandatory cost category for hours - Include a cost category for hours in the route and job card journals.

•

Update capacity plan - Automatically update the capacity plan when journals post. This means adjusting the capacity reservation so that they are based on the remaining quantity.

•

Pick negative - Allow for negative picking in the physical inventory during posting.

•

Physical reduction - Automatically reduce item consumption to the physical inventory if the stock is out.

•

Inv.-manage planned order qty. - Indicate that the planned order quantity must manage and appreciate the attached inventory transactions.

•

Accept error - Accept missing feedback for resource and item consumption.

•

Automatic BOM consumption - Indicate that the BOM consumption for the current production must be automatically picking-list updated.

In the Automatic update FastTab, you can configure automatic scheduling, automatic execution, automatic purchase creation, and auto-report as finished operations. •

Automatic BOM consumption - Select to enable automatic consumption when you update a production order. The system then posts the picking list for the consumed materials. The options in this drop-down are: o o o

•

Flushing principle - Register consumption according to the setting on BOM line. Always - Always register automatic consumption. Never - Do not register automatic consumption.

Auto-report as finished - Indicate that the feedback for the last operation must be reported as finished.

Feedback on consumption during production If you choose, you can direct the system to update production journals to provide feedback automatically after production is started. You can do this by selecting the relevant check box on the Production control parameters page. The following can be specified for Automatic route consumption: •

Route group dependent - If automatic consumption is selected in the routing group feedback, and you include the setup and processing times, the route has automatic consumption. If not, the consumption must be entered manually.

•

Always - All route consumption is entered automatically.

•

Never - All route consumption is entered manually.

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Posting profile in production groups You can use the Production control > Setup > Production > Production groups page to create production groups that you can select from to create production orders. You can also use this page to assign ledger settings to all production orders that are included in the production group, when you use the production group settings as the posting principle. When ledger settings are specified on the production group, all production orders in the group are posted to the ledger by using the same criteria that is defined for the group. Specifically, this posting profile is applied as a default to all the orders that are part of the production group and controls how posting is performed and how costs are calculated. When a production is reported as finished, it means that finished items have reached inventory and become available to ship. These items values are posted to the account that is specified in the Report as finished field. Debit the amount on this auxiliary account and calculate the amount by multiplying the quantity with the standard cost price. This account functions as an auxiliary account because the amount is only posted on this account until costing takes place. To balance the books, credit the same amount to the account that is specified in the Report as finished offset account field.

WIP accounts WIP accounts affect the way in which Route and Job card journals are posted. These accounts credit the resource or resource values that are included in the journal lines. These resources can consist of electricity, heat, oil, machine hours, and other operating costs that are posted as expenses on a profit and loss account. This means that the expenses for these items are deducted when the expenses become activated. The expenses change from being posted on an operating account to being posted in a status account, where the WIP is determined. The amount is debited on the account that is specified in the WIP account field. This is done to keep track of the fact that the resources do not affect operating cost but are in production. Example To accurately track production costs, a company sets up accounts for the cost of items in production and for the labor and overhead costs of work in process. The company uses production groups to specify the accounts that are used during production, and then enters the account for the cost of items in production in the Picking list offset account field on the Ledger - Items tab of the Production groups page. The company also enters the account for labor and overhead costs for work in process in the WIP account field on the Ledger - Resources tab of the Production groups page. This setup allows the company to track all the costs (material, labor, and overhead) of a production order.

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Production costs Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/9-production-costs Production costs involve the analysis of actual costs versus estimated costs for production orders, and the analysis of costs for current production activities. When analyzing production costs, you can do the following: •

Calculate the estimated costs for a production order.

•

Calculate a suggested sales price based on estimated production order costs.

•

Analyze actual costs versus estimated costs for a production order.

•

Analyze reported costs for current production orders.

•

Analyze production variances for a completed production order for a standard cost item.

•

Identify sources of production variances.

•

Suggest new standard costs based on historical variances.

•

Analyze variances for specified time periods.

Production costs are posted every time a journal is posted. The production costs accumulate in the Items in production and Work in process accounts until the production order is complete. Production orders that are not ended have estimated production costs based on estimated quantities, and individual costs of quantities reported as finished are posted. However, the realized production cost is not calculated until the production order is ended. When the production order is ended, the final production cost is calculated by using actual production amounts.

Estimate material and capacity consumption Estimation provides you with the projected material and capacity consumption costs of producing an item in the planned production order quantity. It is a mandatory step in the production process and is conducted after the production order is created. Estimation's essential function is to estimate item and route consumption during the production process. These estimates form the basis for subsequent scheduling and production processes. Go to Production control > Production orders > All production orders, select the production order that has been estimated, select the Manage costs action pane, and select View calculation details. Estimation is based on costing resource, if production is not yet scheduled. If production is already scheduled, estimation is based on the actual scheduled resource or resource group. When you estimate production order costs, the system bases projected cost calculations on a combination of the following: •

Production order quantity

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•

Components in the BOM

•

Routing operations in the production route

•

Indirect costs that are applicable to these components and operations

•

Active cost data as of the calculation date

If a phantom line item is present in the production BOM, the calculations reflect the phantom's components and route operations. You can recalculate estimated costs to include new information. This can be necessary if, for example, there are changes in the order quantity, components in the production BOM, routing operations in the production route, indirect costs that are applicable to these components and operations, or active cost data as of the recalculation date. When you run estimation, the system calculates the following types of cost values: •

Production cost - This is the top line of the estimate. It shows the complete cost of running the production order and the total sales price for the production. It is the sum of all the cost lines on the estimate.

•

Route or resource costs - These are the costs for the operations that are involved in a production, including elements such as setup time, run time, and overhead.

•

Material costs - These are the costs and prices of the BOM components that are needed to produce the item. These have been previously established and entered into the system.

A cost estimate can also provide the following: •

Meaningful price quotations

•

Estimates of the profitability of the order

•

Estimates of raw material usage

•

Comparisons of cost information from previous productions

•

Budget and forecasting information

•

Estimates of the production size that is required to maintain a particular cost

•

A sales price suggestion for the production item based on a cost plus-markup approach

Analyzing production order costs After a production order has been estimated, you can analyze its estimated and actual costs by using the Price calculation page or the Cost estimates and costings reports page. On these pages, information about the estimated and actual costs (and quantity) is shown for each component item, routing operation, and indirect cost. The actual costs for a production order are based on the reported consumption of material and routing operations. You can access the detailed transactions about reported consumption of material, routing operations, and indirect costs on the Production posting page for a production order. The Price calculation page shows the estimated material and time consumption in a production order to establish a baseline from which to measure actual costs. When a production order is ended, final costing

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is based on the actual material and time consumption, and allows for the comparison of expected and realized costs. You can use this page to analyze estimated and actual costs that are related to components and routing operations for a production order. You can also view the cost of goods sold information in the costing sheet format, and analyze the source of production variances for an ended production order for a standard cost item.

Consider the following example: A company wants to compare its estimated production costs with actual production costs. By using the Price calculation page, the company can view the estimated production cost before and during the production process. As journals are posted during production, actual costs of items and labor/overhead continue to be posted on the Price calculation page. When the production order is ended, the posted costs are accumulated into the realized costs so that actual costs can be compared to the original estimation.

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Dimension link Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/10-dimension-link Companies can link relevant financial data to the inventory transactions that are taking place at each site in a multisite production environment. This link results in: •

A financial dimension that is associated with the site inventory dimension.

•

A financial dimension value that is associated with each site.

Financial dimension links assume that the revenue in question is directly attributable to the delivering site. When this is the case, this feature allows companies to trace profit and loss figures directly to the operational site. Go to the Inventory management > Setup > Posting > Dimension link page and select the dimension to be the storage dimension, Site.

After linking financial dimensions to inventory transactions at a site, you need to activate the link. If you select the Activate link button, the value of the selected dimension on all transactions will be determined based on the value of the Site storage dimension. However, transactions might still be posted regardless of the dimension value. Activation of the financial dimension link results in the following conditions:

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When new transactions are created that carry both inventory dimensions and financial dimensions, the linked financial dimension is assigned the dimension value that is specified for the site. •

Transactions that carry both inventory dimensions and financial dimensions can be posted, even though the linked financial dimension value does not match the value that is specified for the site.

•

The value of the linked financial dimension can be changed on open transactions that carry both inventory dimensions and financial dimensions.

If you select the Lock link button, transactions can only be posted if the value of the selected dimension matches the value associated with the Site storage dimension. Hence, all open transactions must be updated before the dimension link can be locked. Locking the financial dimension link results in the following conditions: •

New inventory transactions that carry both inventory dimensions and financial dimensions are assigned a financial dimension value based on the value that is specified for the site.

•

You can post transactions that carry both inventory dimensions and financial dimensions only when the linked financial dimension value matches the value that is specified for the site.

•

You cannot change the value of the linked financial dimension on transactions that carry both inventory dimensions and financial dimensions.

•

You cannot edit the financial dimension value that is associated with a site. The prerequisites for locking the financial dimension link are: A financial dimension link with the site inventory dimension must be established.

Using production reports Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/11-use-production-reports The following are production reports that you can use: •

Production control > Inquiries and reports > Work in process reports > Materials in process - This report lists the picking list transactions that are reported against the current production orders as of a specified transaction date. It indicates the component's quantity that is issued and the cost amount for each transaction.

•

Production control > Inquiries and reports > Work in process reports > Work in process This report lists route (or job) transactions that have been reported against the current production orders as of a specified transaction date. The report indicates the hours, amount, and quantity reported for each transaction, and the identifying information, such as the operation number, operation ID, and resource. The report also displays the total time and amount for all transactions against the production order and the reported as finished quantity.

•

Production control > Inquiries and reports > Work in process reports > Indirect costs in process - This report lists the indirect costs incurred against production orders based on reported consumption of routing operations and components as of a specified transaction date. This report

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indicates the type of indirect cost (surcharge or rate), the costing sheet code for the indirect cost, and the cost amount for each transaction. It does not provide information about the route card or pick list transaction that generated the indirect cost.

End production orders Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/12-end-production-orders Before ending production, Finance and Operations calculates the actual costs for the quantity that was produced. All estimated costs of material, labor, and overhead are reversed and replaced with actual costs. These costs are based on realized material and time consumption. You can compare actual costs to estimated material and time consumption costs that were calculated when the production order was estimated. Final price calculation covers the consumption of items, services, item gains, and operations. When production orders are ended, they are cost-accounted. A receipt transaction with the Purchased status is generated for the production item. This transaction covers receipts for items that were created and have the status Ordered, items that were reported-as-finished and have the status Received, and receipt transactions that were generated earlier are deleted. Previously posted items and WIP are automatically reversed in the ledger and all journals are posted and closed. If you select the End job check box when you run the cost calculation, the production order status changes to Ended. This status prevents any additional costs from being inadvertently posted to a completed production order.

Final price calculation Final price calculation covers the following: •

•

Consumption of items - The cost amount for item consumption is calculated as: Component item consumption * Item's cost price = Realized cost amount o

If the consumed items are not open-transaction marked, the average cost is used. The item's cost price is taken from inventory. However, if the item is open-transaction selected for a receipt transaction with the Purchased status, the item's cost price is taken from that receipt transaction. For costing of the item consumption, the system issues a transaction with the Sold status. The original issue transaction with the On order or Picked status is deleted.

When the production order comes to the costing, all products with type Item or Service in the BOM are handled the same way.

Finished items - The cost amount for finished items is calculated as : Number of finished items * Item's cost price = Realized cost amount www.dynamicscompanions.com Dynamics Companions

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Consumption of operations Operation consumption includes run times, setup time, and processed quantity. The cost amount for the consumption of run time, setup time, and processed quantity is calculated as follows: (Reported time consumption * Reported hourly cost price) + (Reported processed quantity * Reported quantity cost price) = Realized cost amount When you select automatic picking of resources, the cost price is retrieved automatically from the run time category, setup category, and processed quantity category that are stated on the route. If the number of finished items has been reported for the operations by using the Report as finished journal, these items are the ones used in costing.

End page Use the End page to finish production orders and assign them the status of Ended. As soon as they are ended, they cannot be updated or reverted to an earlier status. The main fields in the End page are: •

Production - Enter the production order number that you want to end. You can enter any existing production order number and use the Select button to filter for a production order number. If you access the page from the Production orders page, the field is automatically filled in with the selected production order.

•

Date - Specify the date to post the production. The system date is the default.

•

Report as finished - Select this to report the production order as finished before you end it.

•

Scrap method - Specify how to post item and resource consumption for scrap quantity. If the quantity that is started is larger than the quantity that is reported as finished, there is scrap.

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Scrap is calculated as: (Quantity started - Quantity reported as finished) / (Quantity > started) * 100 The options are as follows: •

Scrap account - The calculated scrap in the ledger account is posted to the scrap account that is specified in the Scrap account field.

•

Allocation - The calculated scrap is allocated as an added cost to the quantity of finished items that are reported as finished.

The production order is assigned the Ended status and can no longer be updated. The production order is cost accounted, and a receipt transaction with the Purchased status is generated for the produced item. All journals that are associated with the production order are closed.

Analyzing variances for a completed production order Production variances are calculated after you end a production order for a standard cost item. The variances reflect a comparison between the reported production activities and the standard cost calculation for the production item. The variances do not provide a comparison to the production order's estimated costs. The reported production activities include consumption of material and routing operations, associated indirect costs, and the reported as finished quantity. The following types of variances are calculated: •

Lot size

•

Production quantity

•

Production price

•

Production substitution

The detailed variance information provides one tool to help users understand the source of each variance. To anticipate variances prior to ending a production order, analyze the detailed information that is provided in the Cost estimates and costings report.

Inventory posting profiles, item groups, and item model group Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/13-inventory-item-group

The inventory posting profile controls which main accounts will be used with each posting update in the inventory subledger and the general ledger.

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Item groups The item group that is assigned to each item is used together with the ledger postings. Use item groups to follow statistics on item sales, purchases, inventory, and productions. Consider the structure of item groups carefully before proceeding. After the groups have been created and used in the item main table, they cannot be deleted. You can choose to create a large number of item groups and assign specific ledger accounts to each group. This allows for detailed control for tracking the value of items in process. Alternatively, you can choose to create only one item group to be used for all physical items. Ultimately, the customer's financial control requirements determine the number of item groups that have to be established and configured.

Item model group Item model groups contain settings that determine how items are controlled and handled in inventory and how consumption is calculated. Working with the customer and evaluating the settings in the inventory model setup determines the number of different inventory model groups you need to create. To determine the number of inventory model groups to create for the implementation, decide whether to: â&#x20AC;˘

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•

Quarantine a customer's specific items.

•

Adhere to special picking or reservation requirements on specific items.

Prerequisite setup in the Production control module Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/14-prereqs-prod-control-module Before starting setup procedures, you need to set up production parameters and journal names in the Production control module. •

Parameters - Set up basic production parameters to define how the application must handle and process production orders. Additionally, you can define how they are created, estimated, scheduled, and consumed. You can also select what kind of feedback you want and how cost accounting must be conducted.

•

Journal names - Identify the production journal names that you want to use to record and post ongoing transactions.

Production order journals record the different item transactions that occur when you work with production orders. These item transactions have a direct effect on a company's financial records. When you post a production journal, all item transactions are automatically transferred to the General ledger. The General ledger is the centralized location for financial data and information in Finance and Operations.

Production groups Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/15-production-groups Production groups establish a relation between production orders and the ledger accounts. This option is used when you are configuring the production control parameters to use the Production group option. When this option is selected, the Production group is mandatory on the production order, and all posting profile information will come from the selected production group. The Production groups page is used to develop a list of production groups that you can select from to create production orders. You can also use this page to assign ledger settings to all production orders that are included in the production group when you use the production group settings as the posting principle. When ledger settings are specified on the production group, all production orders in the group are posted to the ledger by using the same criteria that is defined for the group. In other words, this posting profile is applied as a default to all the orders that are part of the production group and controls how posting is performed and how costs are calculated. www.dynamicscompanions.com Dynamics Companions

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Production control parameters Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/16-prod-control-parameters Production parameters must be defined before you can create or run your production. Production parameters are defined to reflect your production environment. You can specify how you want to work with creating, estimating, scheduling, consumption feedback, and cost accounting for production orders. To open the Production control parameters page, go to Production control > Setup > Production control parameters. In addition to setting up the production control parameters at the company level, you can configure the production control parameters uniquely by site. If a site does not specifically have parameters assigned to it, Finance and Operations uses the company configured parameters for that site.

Parameters by company or site Two versions of the Production control parameters page exist, where you can define production parameters that apply to the company level. Another version allows you to define production parameters that apply to the site level. The parameters that apply to the site level are specified in the Production control parameters by site page. To open the Production by site page, go to Production control > Setup > Production control parameters by site.

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The value that you set in the Parameter usage field determines whether Finance and Operations uses the company-level parameters or the site-specific parameters. If the Parameter usage field is set to By Site, site-specific parameters are used where they are defined. If the parameters are not defined, the companylevel parameters are used by default. The tabs of the Production control parameters by site page follow the same pattern as the Production control parameters page. Here is an overview of each tab, and it's parameters.

General tab â&#x20AC;˘

The Parameter usage field controls which production parameters are used: o o

By company - The companywide parameters are always used. By site - The parameters for the selected site are used. If no site-specific parameters are defined for a certain site, Finance and Operations uses the parameters that are defined for the company.

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•

Profit setting - Specifies the profit setting to be used to determine the sales price of the item. Profit settings are associated with Cost groups, which in turn can be associated with Cost categories. This establishes a reference (relationship) between item consumption, route consumption, and profit-setting. Selected value is used by default to determine sales price.

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Reservation - Specifies whether items on a production order must be reserved automatically, and whether on-hand inventory must be selected as being used for this order. The following options exist: o o o o

Manual - No reservation is made. Estimation - Raw material is automatically reserved when the production is estimated. Scheduling - Raw material is automatically reserved when the production is scheduled. Start - Raw material is automatically reserved when the production is started.

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Ledger posting - Shows how the production order is to be posted to the ledger, which takes place when the production order is cost accounted. When you create a new production order, the Ledger field in the production order contains the setting entered in the Ledger posting field.

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Maximum job lead time - specifies the maximum lead time for a production order in days. If the lead time is larger than this value when you are running Operations or Job scheduling, the scheduling does not take place. This parameter can also apply to sites.

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Route network - Select to use a complex network. A complex network means that the production routes have several branches, each started independently of the others. When you are working with complex networks, the internal sequence in the production route must be built up manually. This means defining which operation is to follow the current operation. When you are working with two or more parallel operations, the simultaneous operations are all allocated the same operation number. o

If you are only working with simple networks in which the operations are run one after the other, then it is not necessary to use the Route network parameter.

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Mandatory date - if this is selected, you must enter a validity period for a route that states when it is valid. When the starting date expires, the route is no longer valid.

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Block removal of approval - When this is selected you cannot change the status of a route after it has been approved.

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Block editing - When this is selected, you cannot edit a route.

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Post picking list in ledger - Select if you want inventory transactions that derived from the posting of picking lists to be posted to the ledger. This parameter can also apply to sites.

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Post report as finished in ledger - To enable the posting of production orders that are reported as finished in the ledger. This parameter can also apply to sites.

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Post excl.transaction type - Select to exclude the transaction type from ledger transactions when they are totaled and created during production posting. This parameter can also apply to sites.

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Planned order - Select this check box to include capacity that is reserved for planned orders during production scheduling. This parameter can also apply to sites.

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Project - Select this check box to include capacity that is reserved for projects during production scheduling. This parameter can also apply to sites.

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Limited work center search - Use this field to improve the performance of job scheduling. When you select this check box, the program searches for the first work center that fulfills the required date and time. If you do not select the check box, the program searches for the work center that fulfills the required date, time, and shortest lead time. This parameter can also apply to sites.

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Price calculation - Select this field if you want to calculate the estimated cost price for a production order during the estimation stage. You can view the results in the Price calculation page. The realized cost price of a production order is calculated when you post production journals, regardless of this parameter. This parameter can also apply to sites.

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Delete capacity reservations - Select this check box to delete capacity reservations when you are reporting production orders as finished. This parameter can also apply to sites.

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Use estimated cost price - Select the check box to use the estimated cost price to determine the physical value when you are reporting production orders as finished. This parameter can also apply to sites.

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Mandatory cost category for quantity - Indicates whether a quantity category must be associated with a production order in the Route and Job card journals. If selected, a quantity category must be associated with a production order when the production order is started; otherwise, it is not possible to start the production order.

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Mandatory cost category for hours - Indicates whether an hour category must be associated with a production order in the Route and Job card journals. If selected, an hour category must be associated with a production order when the production order is started; otherwise, it is not possible to start the production order.

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Automatic BOM consumption - Select this field to enable automatic consumption when you update a production order. The program then posts the picking list for the consumed materials. The options are: o

Flushing principle - Automatically register consumption according to the setting of the Flushing principle field on the BOM line.

Always - Always register automatic consumption.

Never - Do not register automatic consumptions. This setting is used when you update a production order.

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Automatic report as finished - Select the check box to enable feedback for the last operation to be automatically reported as finished.

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Update capacity plan - Indicates whether the operation in the referenced production route must be automatically rescheduled backward from the current ending date and time when the Route card and Job card are posted. During rescheduling, the reserved capacity will be adjusted so that only the capacity needed for the remaining quantity is reserved.

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Journals tab You can define which settings should operate by default in each of the four journal types on the Journals tab of the Production control parameters page. The fields in the Default journal names field group are described in the following list. Pick the journal name that you have created and want to use as default from the drop-down menu in each field: •

Picking list - Select the name of the picking list journal that you want to use to automatically record deliveries from inventory, if nothing else is specified on the production order line. This parameter can also apply to sites.

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Route card - Select the name of the route card journal that you want to use to record route consumption if nothing else is specified on the production order line. A route card provides you with an overview of information on route and operation setups. This parameter can also apply to sites.

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Job card - Select the name of the job card journal that you want to use to record jobs if nothing else is entered on the production order line. A job card lists the individual job numbers of a particular operation, one job per page. The jobs on a job card, and their estimated times, come from the route and operation setup information. You can open the lines (or entries) on each job directly from the Job card. This enables you to obtain feedback from the shop floor on the production process as it is taking place. Employees can enter consumption statistics and information, such as the error quantity, directly into the system.

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Report as finished - Select the name of the journal to use when the production order is automatically reported as finished. This parameter can also apply to sites.

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Pick negative - Select to allow negative picking in the physical inventory when you are posting.

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Physical reduction - Select to automatically reduce item consumption to physical inventory in the case of out of stock items.

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Inv. Managed planned order qty. - Select the check box for the planned order quantity to appreciate the attached inventory transactions. This field indicates whether the default quantity in the picking list journal is to control and record corresponding inventory transactions. If this field is not selected, the consumption quantity in the picking list journal controls and records the corresponding inventory transactions. Control means that there is always a quantity in the inventory transactions to satisfy the quantity in the journal lines.

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Accept error - Indicates whether to accept missing feedback on work center and item consumption.

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Automatic BOM consumption - Indicates whether BOM consumption for the current production must be automatically picking-list updated.

Automatic update tab The Automatic update tab on the Production control parameters page is used to define settings to guide automatic updates of the production order as it moves through different production stages. The

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production order has a different status, depending on its stage. These settings determine that an update will be run when the production has passed a certain stage and is ready for the next. For example, the schedule will automatically be updated when a production has been cost-estimated and released. The fields in the Automatic update tab are: •

Scheduling method - Indicates the scheduling method that is used when production orders are scheduled automatically. The following methods exist: o

Operations scheduling - The starting and ending dates for one or more production orders are calculated using a rough estimate based on the capacity of the resource groups.

Job scheduling - Jobs are created for the operations that are specified on the attached production route, and precise starting and ending times are calculated for each of the jobs and operations. Job scheduling allows users to schedule the production order's other jobs together with any references on the specific job.

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Automatic BOM consumption - Select an option to set up automatic BOM consumption when you update a production order. The program then posts a picking list journal for the received quantity on the purchase order. The options are: Flushing principle, Always, or Never.

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Automatic route consumption - Specifies the setup for automatic route consumption in connection with the automatic running of Start. Running route consumption is automatic when an update that is mandatory to the production flow is skipped. For example, Report as finished is run and Start is not run yet.

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Automatic BOM consumption (for auto-report as finished) -- Specifies the setup for automatic route consumption in connection with the automatic running of Report as finished. The Report as finished process is automatically run when an update that is mandatory to the production flow is skipped and the production's status is lower than the Reported as finished status.

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Automatic route consumption (for auto-report as finished) -- Indicates purchases that are automatically created when productions are cost-estimated and grouped by supplier. Alternatively, one purchase is generated with one line for each planned purchase order.

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Group by vendor - Indicates purchases that are automatically created when productions are cost-estimated and grouped by supplier. Alternatively, one purchase is generated with one line for each planned purchase order.

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Group by purchase agreement - Indicates purchases that are automatically created during estimation.

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Find purchase agreements - Select the check box to activate the search for purchase agreements during the estimation. If a corresponding purchase agreement is found, relevant information, such as price and discount, is copied to the purchase order lines.

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Standard update tab Apply the parameters on the Standard update tab on the Production control parameters page when no other value is specified at a higher level, for example, if no journal name is specified for automatic picking. The Standard update tab contains fields relating to End and Scheduling. Use the Scrap method field on the Standard update tab of the Production control parameters page to select the method for posting item and work center consumption that is used for the error-reported quantity. Use the Scrap account field to specify the ledger account on which scrap must be posted. The remaining fields on the Standard update tab are: •

Finite capacity - Select the check box to ensure that scheduling observes capacity limitations.

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Finite material - Select the check box to ensure that scheduling ensures (by use of futures messages) that materials are available. This field indicates whether the material's existence upon scheduling must be considered critical or non-critical.

If delivery of the materials before an operation begins is considered critical, scheduling uses the estimated futures dates for the component materials. The futures dates indicate when the materials are available and calculated in connection with your selecting Yes on the futures setting in scheduling. If the materials are not considered critical, scheduling assumes the materials are available or can be procured immediately. •

Finite property - Select the check box to ensure that scheduling observes any property requirements. This field indicates whether scheduling must respect any property requirements. Limited property is used to control the setup times for operations with the same properties. Meaning, if two operations with the same properties follow one after the other, Job scheduling does not take the setup time into consideration. Property scheduling does not apply to work center groups.

Status tab The Status tab on the Production control parameters page provides an overview of the stages in the production cycle. The check boxes indicate whether a given update can be run on the production order, given the production order status.

Inventory dimensions tab The Inventory dimensions tab on the Production control parameters page is used to select the dimensions that you want to appear in the journals, lines, or tables.

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Unit of measure tab The Unit of measure tab on the Production control parameters page is used to define units of measure that are used as time units in production flow activities in Lean manufacturing. The time units are as follows: •

Days

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Hours

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Minutes

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Seconds

Lean manufacturing tab The Lean manufacturing tab on the Production control parameters page is used to define default parameters that are used when production flows and activities are created in Lean manufacturing. For more information about Lean manufacturing, refer to Configure lean manufacturing , Create and process fixed Kanbans , Create and process event Kanban rules , and Create and process scheduled Kanbans .

Production pools Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/17-production-pools Production pools group production orders into categories with shared characteristics. A production order can be assigned to a production pool. You can also assign a production pool to a default posting profile to define a method that is used to post transactions to the orders for the pool.

Example You can group subcontracted orders that are missing deliveries, regular production runs, orders that are missing materials, orders that are delayed because of a machine failure, or orders that are ready for release, start, or scheduling. Setting up production pools provides a way to group production orders into various useful categories. Production pools can categorize production orders into groups that share common characteristics, and when you create a production order, you can assign it to a specific production pool.

Example You can create production pools for orders that are top priority or that have a particular production status. You can also assign a production pool to a default posting profile to define the method that is used to post transactions for the orders in the pool.

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Examples of scenarios where production pools can be used to group production orders include: •

Orders that are ready to be produced

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Subcontracted orders that are missing deliveries

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Regular productions

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Orders that are missing materials

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Orders that are delayed because of machine failure

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Orders that are ready for release, start, or scheduling

Allocation keys Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/18-allocation-keys If an employee starts more than one job on the Job registration page, it is referred to as a bundle. Allocation keys are used to define how bundled job registrations work within a specific area. The time spent on bundled jobs can be allocated to the individual jobs in different ways by using those allocation keys. Allocation keys consists of the following components: •

Sites

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Production units

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Resources

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Resource types

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Bundle type

If you bundle jobs, you need to define the total registered time for all jobs that would be allocated for each job. Additionally, if bundling jobs, you need to define how the total registered time for all the jobs should be allocated to each job. You can define allocation by selecting one of the following options in the Bundle type field on the Allocation keys page: •

Estimation - Time is divided between the jobs based on the estimated time for the jobs.

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Jobs - Time is divided according to total jobs bundled and how much time was spent finishing all the jobs.

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Net time - Time is divided equally between the jobs that are in the bundle at any time.

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Real time - Actual job time is allocated. The cost can be calculated based on the actual payroll cost.

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Set up calendars and resources Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/19-setup-calendars-resources Calendars and resources must be set up in the Organization administration module prior to using the Production control module. Resources are the physical equipment (more generally referred to as the "resources") that are used to create finished items. Because capacity on resources is limited, you should also consider the time that the resources are available (their "working times") when you are assessing the amount of time it will take to complete the item.

Set up working time templates Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/20-setup-working-time-template The first step in the process of setting up resources and calendars for use in the Production control module is to set up the working time templates. Working time templates are defined in the Working time templates page, which is located by selecting Organization administration > Setup > Calendars > Working time templates. You can use this page to set up templates that reflect normal working times in your company. This can be a 24-hour production sequence in which the resources are machines, or a work week of 9 to 5 for the Purchasing department, where the resources are individual employees.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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The templates will help you to create and manage working time calendars for your resources. Working time calendars use the work times that you define in this template. For example, one period might equal the time that the work day officially begins to the lunch break, while another period might be the time from the end of lunch to the official end of the work day. This is completed for each day that the Legal entity is in operation. The scheduled hours are then copied to the Working time calendar. Specify the normal or most-used hours of operation. You can use the From field to specify the time that the work period begins, and use the To field to specify the time that the work period ends. You can also use the Efficiency and Property fields to further define the use of each of the time periods that you set up.

Efficiency You can use this field to specify the efficiency percentage to be used in scheduling for the period in question, where: Scheduling time = Time * 100/Efficiency percentage

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For example, if the evening shift operates at an efficiency level of 75 percent (versus the day shift, which operates at 90 percent), you can note this in the Efficiency field. The effects of these rates are factored into the available capacity on the resources and throughout the system.

Properties You can use this field to assign properties to your templates. Properties are used in the scheduling and structuring of production. The idea is that productions that share the same properties can be produced simultaneously. Properties are used by resources to help optimize production schedules and are set up on the Properties page. It is useful to set up properties on your calendars for use in setting up properties on resources. For example, if you assign the property of red to a paint machine on Monday, when you run the schedule, this resource will paint items red only on Mondays. Resource properties are not required when you set up working time calendars.

Create calendars Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/21-create-calendars The next step in the process of setting up calendars and resources is to create the calendar. Calendars must be set up before you create resource groups. This is because when you create a resource group or a resource, you will have to specify in which calendar it should be used. Accordingly, calendars serve as the basis for calculating the capacity of the individual resources. Use the Calendars page to create one or more calendars to manage the working hours that are used in resources and resource groups. If you create more than one calendar, it is best to create a base calendar first. To do so, go to Organization administration > Setup > Calendars > Calendars.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Compose working times The Working times page is used to contain a record for each calendar day of the year. You can define working times by entering times individually or by copying the information in the calendar and making relevant changes. Enter the typical work days and times that are used in your production, and enter any consistent variations to these times such as holidays or weekends. You can use the Compose working times button on the Working times page to specify which calendar to use to create the working times, and define the period of time for which the calendar is to be updated. Alternatively, you can select an already-defined working time template. When the calendars and resources groups are set up, they can be associated with each other. This is done by selecting the appropriate resource group on the Calendars tab of the Resource groups page.

Resource capabilities Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/22-resource-capabilities The next step in the process is to create the Resource capabilities which describe what resources can do. When you are designing a route, the requirements that resources need to perform the various operations in the route can be expressed as the set of resource capabilities. This allows the allocation of resources to be deferred until production is scheduled.

Resources Resources are assigned to jobs and operations. Resources can be different types including machines, tools, human resources, vendors, facility, or locations. The scheduling engine aligns with the new resource model and can schedule resources based on their capabilities.

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Resources and capabilities replace work centers and task groups to provide more flexibility in setup and maintenance. In Finance and Operations, resources can be allocated to jobs and operations by matching the capabilities of the resources with the requirements of the operation. Alternative resources with the same capabilities are considered, unless there are requirements for a specific resource or resource group. This applies whether you select to run job scheduling or operations scheduling. The selection process consists of matching the requirements of the operation with the capabilities of the resources. Other requirements, such as location, resource working time, and resource type are also considered when planning the production.

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Capabilities - The ability of a resource to perform a given activity that is relevant to production. Capabilities are assigned to an operations resource. o

A resource can have more than one capability assigned to it, and a capability can be assigned to more than one resource. You can assign capabilities to resources on a temporary basis by defining a start date and expiration date on the capability assignment.

Capabilities that have expired on a resource will prevent the resource from being scheduled for production if the production requires that capability. A capability that has expired can be later renewed. Also, a capability can be assigned to any type of resource.

Skills - You can create and manage competencies that you will specify for employees or jobs. An operation might require a resource with a specific skill. o

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The scheduling engine can find resources with specific skills by searching for the skill information on the worker to which the resource is linked. This is only applicable for job scheduling, not operation scheduling. To set up skills, go to Human resources > Competencies > Setup > Skills.

Courses - Can be created and maintained. This page lets you track which courses your employees have attended. An operation might require a resource with a specific course. The scheduling engine is able to find resources with specific courses by searching for the course information on the worker to which the resource is linked. This is only applicable for job scheduling.

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Certificate - Can be added to a user in human resourcing, which lets you track what certificate your employees have. An operation might require a resource with a specific certificate. The scheduling engine can find resources with specific certificates by searching for the certificate information on the worker to which the resource is linked. This is only applicable for job scheduling.

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Title - The title an employee has can also be a requirement for a job. An operation might require a resource with a specific title. The scheduling engine can find resources with specific titles by searching for the title information on the worker to which the resource is linked. This is only applicable for job scheduling.

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Priority is used to determine which resource should be allocated first, if more than one resource could perform the same capability at the same level within the given time period. For a certain capability, the resource with the lowest priority number is selected first. In other words, the lower the priority number for a certain capability is, the higher the priority.

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Level is a qualification of a Capability that allows system search of a suitable resource if there are multiple capable resources. Level does not have any units and is a numeric value solely for the purpose of finding a resource. It is not used in capacity calculations in any manner. o

For example, if a level value of 100 is entered in the route, then it means all resources that can perform at more than or equal to 100 can be used. If a resource R1 has a level of 300, then it means that resource can perform the operations that need up to 300.

Resource groups Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/23-resource-groups After you create capabilities and resources, the next step in the process is to create the resource groups. The way in which resource groups are set up depends on the complexity of the manufacturing process. If several demands must be met and there are multiple classifications, based on the capacity or the capability of individual resources, then these factors must be reflected in the resource group setup. For example, you can post information on resources to the ledger by using the resource group instead of having to post financial data for each resource individually. As another example, a resource group can be viewed as representing a physical area where resources are located on the production floor, often delineated by a yellow line on the floor. Companies can determine both the operations scheduling percentage and the efficiency percentage for their resources and resource groups. These percentages specify the extent to which capacity is available in the resource or resource group that is associated with operation scheduling.

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Create operations and operation relations Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/24-create-operations-relations To create a route that is based on a series of sequential operations, the operations themselves must be available. An operation is a task or process that is connected with the production of an item. It includes the necessary details for an efficient production schedule. Operations are set up in sequence to establish an appropriate order and context for the total production process of an item. If you are also working with routes, operations must be defined for each production route that you set up. Go to Production control > Setup > Routes > Operations to create operations.

Operations are defined as a series of discrete tasks that have to be performed in sequence to produce an item. Operations must be set up for each route that you create. Because multiple operations linked in sequence constitute an operation network, and multiple operation networks constitute a production route, all data that is specified for the operation will automatically pertain to the route. Before setting operations, you should know: â&#x20AC;˘

Which task or activity must be completed

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The order of the processes and the operation priority

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How many and which resources are needed for performing the operation, and what those resources must be capable of doing

You should create capabilities and also create resources and resource groups before you set up the operations because operations are closely related to the existence of resources.

Operation relations Operation relations simplify and streamline the task of creating and maintaining operation base data. They are used to control which operation is tailored to specific route or item. The main characteristics of operation relations include: •

•

Each relation contains the information that is used by production orders when they are created or updated. This includes the resource requirement, route, consumption calculation, cost categories, measurement, times, and overlap quantity that applies to the order. o

If the information that applies to the operation is general and applies to all items, only one relation for the operation needs to be created.

If item or route has specific parameters for an operation that deviates from the standard parameters for that route, individual relations are considered (table/group relations are used). When the production order is created, information from the specific relation in question is copied to the production route.

The use of the operation relation is limited in the way it is attached to items and routes. Each relation is attached to an item, an item group, or all items. At the same time, each relation is attached to either a route or all routes. This means that one operation might include different information on times, cost categories, properties, and so on, that is specified in separate relations. Therefore, the same operation can be used in several routes by creating a relation for each route.

To set up and edit operation values that are associated with items and routes, select the Item relation/Route relation button of the Operations page. The fields in the Consumption calculation field group on the Setup tab are: •

Formula - Specify how Run time for the operation should be calculated.

•

Factor - If it has been specified that a user formula can be used, this field can contain an operation-based value. Typically, the field contains the number of capacity units of the current resource to be used for the production of a component of the finished item.

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Costing resource - You can use this field to default cost categories from the costing resource to the operation relation cost categories. Estimation for a route can be based on a specific costing resource.

The following is an example of how Run time is calculated on the basis of resource capacity: A machine with 1,000 rotations per hour is used to perform the operation, where 2 pieces of the finished item are finished per rotation, then the production of finished items per hour will be 2,000 pieces. You

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specify 1,000 for the resource's capacity per hour, and set the formula factor for the operation in the route to 0.5 (P). This gives the following calculation: Process quantity per hour = 1,000 (K) / 0.5 (P) = 2,000 pieces. The fields in the Route field group on the General tab of the Operation relation page are described below: •

Setup category - Set up resources. You can specify a cost price for the setup category to be used when you are making a cost estimate for a production order. Cost categories are managed on the Cost categories page. The cost is calculated as: Setup time * Hours/time * Load * Qty. of resources * Cost price. The sales price for the setup time is calculated through the cost group from the cost category (setup category). Each cost group can have one or more profit settings and corresponding profit percentages. When making a cost estimate for the production, you can specify which profit setting, and consequently which profit percentage, you want to use when calculating the sales price. The cost group is managed on the Cost groups page.

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Run time category - Indicates the run time category to be used when the operation is run. Cost categories are managed on the Cost categories page. The cost is calculated as: Quantity * Accumulated * (Run time / Process qty.) * Hours/time * Load * Qty. of resources * Cost price. The sales price for the operator time is calculated through the cost group from the Cost groups page.

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Quantity category - use this field to specify the cost price that is used when you are making a cost estimate for the production order. The cost is calculated as: Accumulated * Quantity * Cost price. The sales price for the quantity category is calculated through the cost group. The Production route page is filled in automatically with the quantity category that is given on the Operations page when an operation has been specified. The quantity category can, however, be changed for the current operation in the production route.

•

Queue time before - The queue time before the operation can start. The queue time must be positive. You can set up the field in the route group, where you determine whether the queue time is scheduled and which calendar is used. You can use the queue time, for example, with vendor work.

•

Setup time - The setup time, which must be a positive value, is the fixed time it takes to prepare a resource. The time is scheduled according to the calendar for the operations resource and is independent of the production quantity. In connection with scheduling, a capacity load is also registered for the time on the operations resource. The setup time is filled in automatically with the setup time that is specified for the selected operation route.

•

Run time - The time that is required to produce the process quantity. If a factor is not specified for the operation relation or the resource, run time is expressed in hours with two decimals. If a value is specified in the Hours/time field for the operation relation, that value overrides the Hours/time value for the resource. Process quantity must be a positive value. For a description of conversion to other time intervals, refer to the description of the Hours/time field. The

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operation's Route groups page determines how time is scheduled. The system calculates time as follows: Run time * (Load) * (1 + Accumulated) * Quantity / Process qty. If you selected Capacity in the Formula field for the production route, the Run time value is always set to 1, and the Process qty. value is calculated based on the factor, with the number of capacity units that you specified under Capacity for the current resource. •

Process quantity - The quantity that can be produced in the specified run time.

•

Transit time - The transport time for transporting items between two operations resources or from the last operation to inventory. How transit time is used depends on how the operation's route group is set up. The transport time must be a positive value.

•

Queue times after - The queue time following the time that the items must wait after the operation is finished and before the next operation can start. The value in the Queue time field must be positive. The field is scheduled according to the setup for the route group in the Working time calendar and can use either the Gregorian calendar or the current working time calendar. You can use the field, for example, to refer to the drying of items before the next operation can start.

•

Hours/time - The conversion factor for those times specified for the operation for conversion to hours with two decimals. Conversion uses the following formula: Hours equal operating hours * Hours/time. The following is an example of conversion of hours to hours with two decimals. The operation time is 0.50 (a half hour) and the Hours/time value is 10000. The time is calculated as: 0.50 * 10,000 = 5,000 hours. If the operation time is in minutes, then the Hours/time value is set to 0.0167. For an operation time of 30 minutes, for example, that time becomes 0.50 hours when you apply the conversion factor. Time calculation: 30.00 * 0.0167 = 0.50 hours.

•

Transfer batch - The quantity that can be moved between sequential operations resources.

Resource requirements define what requirements that resources must fulfil to be allocated to the current operation. An operation's requirements for a resource are defined on the Resource requirements tab described in an earlier unit. Resources that match the requirements of an operation, for a particular date, are considered applicable resources. The resource must satisfy all the resource requirements for the operation to be applicable.

Working with simultaneous operations Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/25-simultaneous-operations Simultaneous operations can be used in simple and complex route networks. A simultaneous operation is a process where several resources are used at the same time and where the resources must be scheduled with limited capacity.

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You must assign the same number to simultaneous operations. Simultaneous operations use the capacity of several resources at the same time, for example, they might use a machine, its operator, and possibly a specific tool. In addition, the simultaneous operations must be prioritized. To prioritize simultaneous operations, the same operation number is first applied to all simultaneous operations, and then the primary operation is specified. Characteristics of working with primary operations are: •

The primary operation is the one using a resource that represents a bottleneck or limits the simultaneous operations.

•

Only one primary operation is allowed for each operation number in a route.

•

All the other simultaneous operations are secondary; therefore, their capacity is not taken into consideration.

•

A total of 20 secondary operations for each operation number can be set up.

Setup route groups and routes Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/26-setup-route-groups-routes Routes are the paths that the item takes from operation to operation, starting with the beginning of the production process and continuing to the end. It is a set of sequential operations, or tasks, that are required to produce an item. It includes the resources and the standard time it takes to set up and run the operations. The operations on the route specify the tasks that are involved in manufacturing an item, and include the detail necessary to efficiently schedule production. Each route includes: •

Operations to be performed

•

Sequence of the operations

•

Resource requirements involved in completing the operations

•

Standard times for the setup and run of the production

A different route can be mapped for each product, depending on the product and the process. You can create an entirely new route, or you can base a new route on existing route information, and then adjust or update the information to match the new production process.

Set up route groups The parameters defined on a route group pertain to all routes in that group. You need to set up route groups before creating production routes. Route groups can be set up to define: •

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•

How planning will take place.

•

The kind of feedback that you want for the group.

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How the various job types such as setup, process, and queue can be handled when production scheduling is run.

•

How jobs can be managed.

•

How the working time calendar and details regarding capacity reservation must be applied.

Set up routes When you set up a customer's routing information, determine how to manage the routes and operations with the following considerations: •

If the customer's manufacturing consists of only a limited number of generic routes.

•

Whether a simple set of routes satisfy the customer's needs.

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The necessity of using route networks or other complex routing.

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If multiple products share the routes by way of item groups.

•

If the customer will benefit from using the route version concept.

•

If the customer requires multiple routes for the same item.

•

Controlling that the active route version based on the To date and From date works for the customer.

The creation of route groups means that parameters are set up for the entire group rather than for each individual route. You can specify automatic feedback on calculations and other parameters in a route group, or define job types that are related to scheduling, job management, operation time, and capacity. You can specify on the route group that the following conditions must be met when a job schedule is run: •

Job scheduling considers the current job type.

•

Job management uses the current job type.

•

Operation time is calculated based on the Gregorian calendar.

•

The job type reserves capacity in connection with job scheduling.

•

You must define routing groups, cost categories, and operations as prerequisites to the creation of routes.

•

You should set up parameters before you use a complex network.

•

If a route contains different kinds of operations, it can be assigned to more than one routing group at the same time.

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Route versions Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/27-route-versions Route versions are used to accommodate variations in the production of products, or to provide you greater control over the production process. They are alternative versions of the main route that accommodate variations in the production of the same item. For example, if you only need to change a few items on a route to meet the requirements of a specific production order, you can save costs by creating a new route version and changing it so that different machines that require less capacity are used instead of the machines that are used on the original route. When you select a route or a route version from the top of the Route page, you can view a breakdown of the items it contains in the Version section at the bottom. Each item in the route is listed and it contains details about the material and operations that are associated with the production order from which the item originates.

Example This example explains the definition of operation numbers in more detail. The first operation is shown as operation number 10 (Weld), the next as operation number 20 (Assemble), and the last as operation number 30 (Pack). As stated, each operation in the production route has an identifying number that identifies the tasks that are involved in manufacturing the item. The first operation is always represented by the lowest operation number in the sequence. The last operation is always represented by the value 0 (zero) in the Next field. •

10 Weld 20

•

20 Assemble 30

•

30 Pack 0

If an item does not have a route in base data, the production route is blank. You can make changes to production routes only on orders up to and including those assigned the Start status. If your changes affect cost estimation or job scheduling, run the estimation and/or operations/job scheduling procedures again before proceeding.

Copy route Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/28-copy-route If you want to use the functions that can be performed relative to the route, select the Functions button on the Route number page. The options include Copy and Route updating.

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You can select a BOM or route in either base data or production and make a copy of it. Additionally, you can define where you want to place the copy and whether you want the copy to be added to the new location or to replace existing lines in the new location. The following conditions apply when multisite functionality is active: •

When you copy an existing BOM to a different site, the warehouse on the BOM lines is cleared. If, however, the site that you copy from and the site that you copy to are the same, the warehouse is not cleared.

•

When you copy an existing route to a different site, the resource on the route lines is cleared, and the default resources for the route relations are also cleared.

•

When all options are selected on this page, select OK to begin the copying process.

Updates are run automatically each time a route is abandoned after having been edited in one of the two routing forms or on a specific item. If the Link type field is set to Soft, a time lapse might occur between operation numbers. During scheduling of a production order, the system is allowed to schedule the next operation later than the end time of the relevant operation. If the Link type field is set to Hard, no time lapse between operations is allowed. During scheduling of a production order, the system has to make sure that the start time for the subsequent operation equals the end time for the current operation. The only way to have a lapse between operations when you are using the link type of Hard is if queue or transport time is used for the relevant operation

Route networks Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/29-route-networks Operations in a route must be attached to each other in a logical way to reflect the production process. Depending on the complexity of the production, this can result in a route network. For simple routes, where the operations are run one after the other, a route network is not required. However, complex networks are frequently needed to reflect the production environment. If this is the case, you should construct routes that contain several operation branches that can be started independently. To activate the parameter Route network, select Production control > Setup > Production control parameters > General tab and select the Route network option located in the Routes field group. This allows you to manually set up the internal sequence of the production route. This means that instead of building the route as a chain of operations in sequential order, where operation 10 goes on until the start of operation 20, which in turn continues until the start of operation 30, and so on, the operation that follows the ongoing one must be specified manually.

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Working with primary and secondary routes Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/30-primary-secondary-routes A resource that is considered a bottleneck or restricting on a route might be defined as primary on one route and secondary on another route. The times that are specified for the primary operation are automatically applied to the secondary operations. Secondary operations are managed based on the times that are specified for the primary operation. The time for the secondary operation can only be adjusted by changing the Load and the Quantity fields on the Route numbers page. If no simultaneous operations occur on a route, all operations are set up as primary.

Exercise - Configure operations and routes Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/31-exercise-config-operations-routes As a production manager at USMF, you need to create an operation for an e-book as a finished good, assign relations to resource 1211, create a route by using the TV&Video item group with the name of ebook Route, with the following operations: •

Operation number: 10 e-book operation links to 20

•

Soft link to Operation number 20: Padding links to 30

•

Hard link to Operation number 30: secondary Packing

Before you begin To get the most out of this exercise, we recommend that you have the standard sample data available in Finance and Operations that is installed via Lifecycle services. 1.

Go to Production control > Setup > Routes > Operations.

Select New.

In the Operation field, type eBook.

In the Name field, type eBook assembly.

Select Relations.

Select New.

In the Route group field, enter or select Discrete.

Expand the Setup section.

In the Formula field, select Capacity.

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10. In the Costing resource field, enter or select 1211. 11. Select Save. 12. Close all pages. 13. Go to Production control > All routes. 14. Select New. 15. In the Name field, type eBook route. 16. In the Item group field, enter or select TV&Video. 17. Select Save. 18. Select Route details. 19. Select New. 20. In the Operation field, enter or select eBook. 21. In the Next field, enter 20. 22. In the Link type field, select Soft. 23. Select New. 24. In the Oper. No. field, enter 20. 25. In the Operation field, enter or select Padding. 26. In the Next field, enter 30. 27. In the Link type field, select Hard. 28. Select New. 29. In the Oper. No. field, enter 30. 30. In the Priority field, select Secondary 1. 31. In the Operation field, enter or select Packing. 32. Refresh the page. 33. Select Save. 34. Close all pages.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/32-configure-discrete-manufacturing-quiz

Configure discrete manufacturing in Dynamics 365 for Finance and Operations knowledge check 1.

Which one of the following reports shows surcharges and rates costs of a production order?

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a) Indirect costs in process b) Work in process c) 2.

Materials in process

Which one of the following reports displays the total time and amount for all transactions against the production order? a) Indirect costs in process b) Work in process c)

Materials in process

Which one of the following reports displays the component's quantity that is issued and the cost amount for each transaction of a production order? a) Indirect costs in process b) Work in process c)

Materials in process

Which one of the following production journal types record resource consumption? a) Route card b) Report as finished c)

Job card

Which one of the following production control parameters can post a picking list journal for the received quantity on a purchase order? a) Automatic BOM consumption (for auto-report as finished) b) Automatic route consumption c)

Automatic BOM consumption

d) Automatic route consumption (for auto-report as finished) 6.

Which one of the following production control parameters indicates purchases that are automatically created when productions are cost-estimated and grouped by vendor? a) Automatic BOM consumption (for auto-report as finished) b) Automatic route consumption c)

Automatic BOM consumption

d) Automatic route consumption (for auto-report as finished) 7.

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a) Automatic BOM consumption (for auto-report as finished) b) Automatic route consumption c)

Automatic BOM consumption

d) Automatic route consumption (for auto-report as finished) 8.

If a company sets up site-specific production control parameters for Site 1, but does not set them up for Site 2, what parameters will be used at Site 2? a) The site-specific parameters for Site 1 will be used at Site 2. b) The company-defined production control parameters will be used for Site 2. c)

No parameters will be applied to Site 2.

d) Site-specific parameters are required for every site.

Summary Link: https://docs.microsoft.com/en-us/learn/modules/configure-discrete-manufacturing-indynamics-365-finance-ops/33-configure-discrete-manufacturing-summary In this module you learned that inventory dimensions in Finance and Operations help to categorize inventory when you implement production transactions and specify how inventory items are stored. You have also learned that inventory dimensions are separated by three different types: •

Product dimensions - Which enable such things as color, size, and configuration to be defined

•

Storage dimensions - Which are used to define site, warehouses, locations in warehouses, and pallet numbers

•

Tracking dimensions - Which provide companies with the ability to trace their products by batch numbers or/and serial numbers. You can assign numbers manually or automatically. Marking and tracing helps track batches or serial numbers.

You were provided with an overview of how to set up the prerequisite production parameters and journal names that guide how production orders are created, estimated, scheduled, and consumed by the application, and how feedback and cost accounting is handled in your production. You learned how to implement the Production module and to set up BOMs, resources routes, operations and, if needed, the multisite functionality. Each of these must be configured to meet the specific needs of the organization. The list of operations must be created to define a route for production, and operations must be linked to resources to define the resources that are used to complete the production. The configuration of these items defines how production is completed and cost accounted.

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Module 4: Create and Complete Production Orders The life cycle of a production order reflects the actual steps that are taken to manufacture a product. It begins with the creation of a production order and ends with a finished, manufactured product that is ready for the customer. The production order is assigned a status that reflects where it is in the production life cycle. This module reviews the Release, Start, Report as finished, and End stages in the production life cycle in the order in which they are conducted. Release, Start, and Report as finished are considered part of production controlLessons •

Introduction

•

Capacity planning, scheduling, and subcontracting

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Scrap and waste

•

Practice Labs

•

Module summary

In this module you learned: •

Understand capacity planning

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Create discrete production orders

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Schedule a production order

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Process production orders

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Control and end production

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Module 5: Work with Cost Sheeting This module describes how to set up a costing sheet that includes material and manufacturing, and how the setup affects the BOM calculation results. Let’s learn how to configure and manage costing sheet in Finance and Operations. In this lesson you learned: •

How to work with the costing sheet

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Module 6: Use Manufacturing Execution Manufacturing execution is primarily intended to be used by manufacturing companies. Workers can register time and item consumption on production jobs and project activities using the Job registration form. All registrations are approved and subsequently transferred to the relevant Dynamics 365 for Finance and Operations modules. Continuous approval and transfer of registrations give managers the ability to easily track actual costs on production orders. Lessons •

Introduction

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Understand the manufacturing executions

•

Identify roles

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Planning considerations

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Configure manufacturing execution

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Control production

•

Practice Labs

•

Module summary

In this module you learned to: •

Understand the manufacturing execution

•

Identify the roles in manufacturing execution

•

Process production orders

•

Understand the process workflows to manage a production

Work with manufacturing execution in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/ The Manufacturing execution module is intended primarily for manufacturing companies. It can be used to register time and item consumption on production jobs or projects. Before you start to use manufacturing execution for job registrations, you must set up various production parameters that define how and when registrations are posted during the production process. The settings of production parameters affect inventory management, production management, and cost calculation. In this module, you will: •

Understand the manufacturing execution

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•

Identify the roles in manufacturing execution

•

Process production orders

•

Understand the process workflows to manage a production

Introduction to manufacturing execution Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/1introduction-manufacturing-execution Manufacturing execution is primarily intended to be used by manufacturing companies. Workers can register time and item consumption on production jobs and project activities using the Job registration form. All registrations are approved and subsequently transferred to the relevant Dynamics 365 for Finance and Operations modules. Continuous approval and transfer of registrations give managers the ability to easily track actual costs on production orders.

About Manufacturing execution Manufacturing execution (ME) is about immediate insight into what happens, letting workers know what to do, and providing the information required to instruct and guide workers. Additionally, ME provides the ability to record costs, monitor performance, and trace the history of production which is critical to the manufacturing execution process. Manufacturing execution serves several purposes in a manufacturing company including the following. •

Resource management: This includes the basic information about the resources (tools, machines, workers, or vendors) and their capacity, capabilities and requirements. The goal is to schedule and process production orders with resources that have the correct capabilities and availability.

•

Production scheduling: The scheduling process uses all the information available from resources and the inventory and master planning sub systems to determine how much to produce and then how to make optimal use of the resources available to meet the requirements of the demand.

•

Production order processing: Although the actual execution of the production order is completed in the Production control module, ME integrates with the Production control module to provide the details about the time and materials that are consumed for specific jobs or operations.

•

Performance analysis and tracing: ME tracks the detailed status of a production order. This is useful to provide accurate work-in-progress (WIP) information, resource performance statistics, or other performance indicators. It also provides the ability to trace the complete history of the orders, batches, or serial numbers that are processed.

Several pages directly related to Manufacturing execution can be found in the Production control module. The following list includes several of these forms.

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Production control > Manufacturing execution > Jobs and activities > Production job •

Production jobs: Display a list page with all of the production jobs that are released to Manufacturing execution.

•

Project activities: Display a list page with all of the project activities that are released to Manufacturing execution.

Go to Production control > Manufacturing execution > Handle messages to create and manage messages that will appear in the Job registration page. Production control > Inquiries and reports > Manufacturing execution > Raw registrations •

Raw registrations: Display a list of all registrations that are not archived.

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•

Registration history: Display a list of registrations that have been modified and their details.

•

Posted registrations: Display a filtered list of registrations that are approved and posted.

•

Raw registrations archive: Display the list of registrations that have been archived.

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Production control > Setup > Manufacturing execution > Manufacturing execution parameters •

Manufacturing execution parameters: Set up Manufacturing execution parameters in Production control.

•

Production order defaults: Define parameters that integrate the Manufacturing execution features with the Production control module.

•

Production order defaults by site: Define site-specific parameters that integrate the Manufacturing execution features with the Production control module.

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•

Configure job card terminals: Edit existing registration forms and configure new registration forms.

•

Configure job card for devices: Display a list of existing devices. You can also use this form to change the parameters for a device.

Production control > Setup > Document groups: Set up document groups. The groups define which workers can read different document types.

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Production control > Setup > Production > Allocation keys: Define which allocation key to apply to bundled job registrations within a specific area.

Understand the manufacturing executions Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/2understand-manufacturing-execution

Manufacturing execution and registration terminology The following list contains terms that pertain to manufacturing execution and related registration tasks:

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•

Manufacturing execution - A function that is used to register time, material consumption, costs on production jobs, projects, and indirect activities. Registration is done in a manufacturing execution registration client.

•

Job list - On the Job registration page, workers are shown the list of jobs that they must perform on a specific resource, such as a machine. A worker can register time and item consumption on each job or task in the job list.

•

Job bundling - If a worker starts more than one job at the same time on the Job registration page, this is called job bundling. The time that is spent on bundled jobs can be allocated to the individual jobs in various ways by using allocation keys. This makes it possible to start multiple jobs at a time in the Job registration (Job list) page. If you bundle jobs, you must define how the total registered time for all the jobs should be allocated to each job. You can define the allocation by selecting one of the following options in the Bundle type field in the Allocation keys page:

•

Estimation - Time is divided between the jobs based on the estimated time for the jobs.

•

Jobs - Time is divided according to total jobs bundled and how much time was spent finishing all the jobs.

•

Net time - Time is divided equally between the jobs that are in the bundle at any time.

•

Real time - Actual job time is allocated. The cost can be calculated based on the actual payroll cost.

•

Pilot/assistant registrations - A worker can register as an assistant to a resource, and can create a small team where several workers work on the same production jobs. Resources that workers are connected to as assistants are called pilots. Only the pilot resource must make registrations. All assistants automatically get the same registrations. For example, if a machine acts as the pilot, workers who have registered as assistants to that machine can make registrations on the Job registration page, and both the machine and the workers who are connected as assistants will receive the same registrations.

•

Indirect activity - An activity or task that isn't directly related to a production job or a project, such as a department meeting, a cleaning job, or a maintenance job on the shop floor. Workers can make registrations on indirect activities, in the same way that they can register on production jobs and projects.

Registration for manufacturing execution Manufacturing execution is intended to be used primarily by manufacturing companies. Workers can register time and item consumption on production jobs by using the Job registration page. All registrations are approved and are later transferred to the relevant modules. Continuous approval and transfer of registrations lets managers easily track actual costs on production orders.

Production parameters in Manufacturing execution The Manufacturing execution module is intended primarily for manufacturing companies. It can be used to register time and item consumption on production jobs or projects. Before you start to use

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Manufacturing execution for job registrations, you must set up various production parameters that define how and when registrations are posted during the production process. The settings of production parameters affect inventory management, production management, and cost calculation. Before workers start to make registrations on production jobs, you should carefully consider all settings on the Production parameters page. Click Production control > Setup > Manufacturing execution > Production order defaults. If your company uses the multisite functionality, you might want to set up different production parameters for each site. The parameters for integration with the Production module are set up on the following tabs on the Production parameters page: •

General - General parameter settings for production jobs in Manufacturing execution.

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Start -Parameters that are used when production operations are started.

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Operations - Parameters that are applied to production operations and feedback about operations during the production process.

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Report as finished - Parameters that are used when items are reported as finished on the last operation of a production order.

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Quantity validation - Parameters that are used to validate start up and feedback quantities on production orders.

Types of production jobs On the Operations tab, you select which types of production jobs require registration on the Job registration page. Typically, workers make registrations on setup jobs and process jobs. However, if job scheduling is applied, you can select other job types that workers must make registrations on when production orders are processed. For example, you can require registrations on transport jobs. Make sure that you select all relevant job types. Otherwise, jobs might not be available for registration on the Job registration page. Your selections should match the selections in the Job management column on the Setup tab of the Production control > Setup > Routes > Route groups page.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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If Job management is selected on the route group, this job type is reported as finished on the production order when the job is reported as finished in Manufacturing execution. When all job types that Job management is selected for have been reported as finished on an operation, Manufacturing execution reports the operation as finished. Some job types can be manually reported through production journals.

BOM consumption and picking list journals A consistent setup for bill of materials (BOM) consumption is important, because it helps guarantee that inventory management is efficient. For example, if BOM consumption parameters aren't set up correctly in Manufacturing execution, materials might be deducted from inventory two times or not at all. On the Production control parameters page, automatic BOM consumption is set up in three stages: 1.

At the start of a production. Set up this stage on the Start tab.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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During the production process when an operation is completed. Set up this stage on the Operations tab.

When a production order is reported as finished. Set up this stage on the Report as finished tab.

Go to Production control > Setup > Manufacturing execution > Production order defaults and select Report as finished tab. For each stage, the Automatic BOM consumption field lets you select one of three methods for picking items for a production order: •

Flushing principle - This option is used in combination with an option that is defined for the BOM in the Production module. If Flushing principle is selected in the **Automatic BOM consumption **field on the Start tab, all materials that are set to Start in the BOM are deducted from inventory when the operation is started. The Available at location option is used for

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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products that are enabled for advanced warehouse processes. If you select this flushing principle, material is flushed when warehouse work for raw material picking is completed. Material is also flushed when a BOM line that uses this flushing principle is released to warehouse and the material is available at the production input location. If the Flushing principle field is set on the Start tab in, you must select the same principle on either the Operations tab or the Report as finished tab. This requirement helps guarantee that materials are deducted from inventory on BOMs that use Finish as a flushing principle on the production order. If the same flushing principle isn't selected on either the Operations tab or the Report as finished tab, materials might be deducted from inventory two times. •

Always - If you select this option for a stage, materials are always deducted from inventory at that stage. For example, materials for the production are deducted when the production order is started. This setting requires that Never be selected on the Operations and Report as finished tabs. This requirement helps prevent items from being deducted from inventory two times.

•

Never - If you select this option for a stage, no BOM consumption occurs at that stage. For example, if you select Never on all three tabs (Start, Operations, and Report as finished), materials must be manually deducted from inventory.

Carefully consider your setup of the production parameters, and make sure that the parameters that are selected on the various tabs of the Production parameters page don't contradict each other.

Registrations in manufacturing execution Workers can make various types of registrations in manufacturing execution for work that is performed on production jobs. Depending on the system setup, workers might also be able to make registrations on project activities and nonproductive tasks, such as breaks, absences, and indirect activities. Here are the registration types: •

Clock-in/clock-out (available with time and attendance) - Workers clock in when they arrive at work and clock out when they leave to go home.

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Register on production jobs - Workers can make registrations, such as starting a job and reporting feedback for a job, on the production jobs that appear in their job list. Workers can start several jobs at the same time. This is referred to as job bundling.

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Register on inventory - Workers can make registrations on materials that are used on the shop floor, but that aren't directly related to production jobs. Examples include grease, lubricants, or other materials that are used to keep machinery running. Registration is performed in an inventory journal.

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Register on projects (available with time and attendance) - Workers can make registrations, such as starting and finishing work on the projects or project activities that appear in their job list.

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Register project fees and project items (available with time and attendance) - Workers can register fees (expenses) that are associated with a project in a project fee journal, such as mileage and bridge toll. Workers can also register item consumption on projects. This is done in a Project item journal.

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•

Register as assistant to another worker - If two or more workers will work together on a production job or a project, a worker can register as an assistant to a machine, or to another worker, who will then act as the pilot. The pilot can select another worker as the pilot, as required.

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Register absence (available with time and attendance) - Workers can register time on various absence codes that are set up. Absence can be indicated if a worker arrives late, requires absence during the work day, or leaves earlier than expected according to the standard work time profile.

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Register breaks (available with time and attendance) - During the work day, workers can register that they are leaving their workstation to take a break. Several break types can be set up. When a worker returns and logs on again, the system registers that the worker is back, and the break registration stops.

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Register indirect activities (available with time and attendance) - Indirect activities are nonproductive activities that workers might engage in during a workday, such as a department meeting, a team meeting, or a maintenance job that is performed on the shop floor. Workers can make registrations on the indirect activities that are set up.

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Register overtime (available with time and attendance) - Workers who have been asked to work longer hours can select whether the extra hours should be registered as flextime or overtime.

You can schedule production at the operation level and the job level. Scheduling at the operation level is the less detailed method, and provides a general estimate of the production process over time. Operations scheduling does not explode the operations for the production route into jobs. If you want to include more detail in the scheduling, such as information about current capacity, you can run job scheduling after operations scheduling. You can also run a job scheduling only. Job scheduling is typically used to schedule individual jobs on the shop floor for an immediate or short-term time frame. The main components of operations scheduling are the scheduling direction, the capacity of resources, and materials optimization. By using operations scheduling, you can do the following: •

Control the planning method by scheduling forward or backward from a given date.

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Optimize the use of resources by scheduling productions based on the capacity of the resources. This also helps identify when to use alternative resources.

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Optimize the use of materials by scheduling productions based on the availability of the required materials.

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Schedule and synchronize reference productions. The dates of the reference productions are adjusted when changes are made to the production order's schedule.

You must estimate the cost of a production order before you can run operations scheduling. If you have not run an estimate, it is run automatically before the operations scheduling process is initiated. Job scheduling is a more detailed form of scheduling than operations scheduling. You can use job scheduling to schedule individual jobs or shop orders and to control the manufacturing environment. It breaks down each operation into its individual tasks or jobs. These jobs are then assigned to the operations resources that will perform them.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Job scheduling also enables you to synchronize all jobs that are referenced by the selected job. You can specify a starting date and time or finishing date and time for the job, and then run scheduling. The time that you specify can be the starting time or the finishing time depending on the scheduling direction. This is useful, for example, when a job can be run only on one machine at a time, or to optimize the job that is run for each resource. The job scheduling process includes the following tasks: •

Split operations into jobs.

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Schedule jobs that are based on the dates and times for the resources that are specified for the related operation.

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Calculate starting times and ending times for each job. You can use finite capacity to make sure that there are no overlapping times.

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Determine which resources in the resource group to run the job on.

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To make this determination, a resource group must be specified for an operation. The job scheduling selects the resources or resource groups based on the shortest lead time and considers any previous reservations on the resources.

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Explode operations into jobs when you run job scheduling. The jobs are scheduled by date and time according to the order that is specified by the production route. The setup of the operation determines which jobs to explode during the scheduling process. The route group that is assigned to the operation controls whether jobs are generated. A job is generated only if it has a specific duration.

For example, a transport time job is generated if a transport time was specified for the selected operation.

Identify roles in manufacturing execution Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/3identify-roles

Key roles in Manufacturing execution There are many roles that can be involved in the life cycle of a production order or project. Some of the people in chain do not directly use manufacturing execution. However, they might affect the data that is viewed and used in manufacturing execution. The following topics review the primary roles that are involved in the chain. In addition the security roles in Dynamics 365 for Finance and Operations are reviewed for each role.

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Production manager The Production manager, works with product development, process engineering, and sales to make production decisions. He/she ensures the necessary resources are in place and the production plan is being carried out properly. The Production manager does not typically directly use Manufacturing execution. However, they enable the manufacturing execution process. These users are typically assigned to the Production Manager security role. The Production manager security role provides access for the user to set up and maintain parameters, and review production orders' registration settings in Manufacturing execution. The Production manager role includes many duties by default. The following list includes the primary duties included in the role that affect Manufacturing execution (the following list does not include all duties that are provided in the default). •

Enable calendar management process

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Enable manufacturing execution process

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Enable production process

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Enable resource management process

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Enable time and attendance process

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Inquire into manufacturing execution progress

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Inquire into production cost calculations

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Maintain indirect activities master

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Maintain indirect activities cost master

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Review time and attendance process performance

Production planner The Production planner, manages scheduling and planning of production. He/she often needs to reshuffle existing orders to make room for more urgent orders and considers exceptions to be the rule. The Production planner does not typically directly use Manufacturing execution except for making corrections and inquiries. However, they enable the production planning and production order process. These users are typically assigned to the Production planner and/ or the Production supervisor security role. The Production planner security role provides access for the user plan and schedule production orders. The primary duties that affect Manufacturing Execution include the following (the following list does not include all duties that are provided in the default). •

Inquire into manufacturing execution progress

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Inquire into production orders

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Inquire into resource capacity

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Maintain firming of planned orders

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Maintain master scheduling

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Maintain planned orders

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Production supervisor The Production supervisor role includes many duties by default that enable the production order process. The following list includes the primary duties included in the role that affect Manufacturing execution (it does not include all duties that are provided by default). •

Approve indirect activities

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Inquire into manufacturing execution progress

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Inquire into time and attendance progress

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Maintain job approvals

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Maintain job assignments

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Maintain job calculations

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Maintain job corrections

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Maintain production order completion

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Maintain production order preparation

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Maintain production orders

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Maintain time and attendance profiles

Shop supervisor The Shop supervisor, ensures that the machine operators are productive, trained, and motivated. He/she can perform any job in the shop, but may use their time primarily assisting more junior colleagues. The Shop supervisor is one of the primary user roles in the Manufacturing execution. These users are typically assigned to the Shop supervisor security role. The Shop supervisor security role provides access for the user to help ensure the day-to-day execution of orders/jobs. As such, the Machine operators know what to work on, and users know who is available and can respond to most requests from Machine operators. The Shop supervisor role includes the following duties by default (the following list does not include all duties that are provided in the default). •

Enable Kanban execution process

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Maintain inventory adjustment journal entries

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Maintain job corrections in registration pages

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Maintain project journals and journal transactions

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Maintain time registration

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Access to the Shop Supervisor role center

Machine operator The Machine operator is one of the primary user roles in the Manufacturing execution. These users are typically assigned to the Machine operator security role. The Machine operator security role provides access for the user to work on production orders and make registrations in Manufacturing execution. The Machine operator role includes the following duties by default. •

Maintain inventory adjustment journal entries

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Maintain production kanban execution

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Maintain production order feedback

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Maintain project journals and journal transactions

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Maintain time registrations

Project manager The Project manager, is responsible for project delivery. He works to provide adequate resources and staff. He has approval authority for all project related charges from his team as well as any other materials charges. The Project manager is typically assigned to the Project manager role which provides access to the project forecast/budget events and responds to project forecast/budget inquiries. Maintains project accounting master information and responds to project accounting master information inquiries. Authorizes project accounting process events. In addition to this role, when Manufacturing execution is used with projects, the user can be assigned to the Shop supervisor role which provides the access required to view and maintain Manufacturing execution entries. Refer to the Shop supervisor topic for more information.

Project team member A Project team member, works with other Project team members as directed by the Project manager to ensure timely project completion for customers. He/she reports the status and submits expenses to the Project manager. The Project team member is typically assigned to the Project assistant and/or Project timesheet user role. The Project assistant role provides access to document project accounting process events and responds to project accounting process inquiries. The Project timesheet user role enables the creation and approval of project timesheets.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In addition to this role, when Manufacturing Execution is used with projects, a user can be assigned to the Machine operator role which provides the access required to view and maintain Manufacturing execution entries.

Planning consideration for manufacturing execution Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/4planning-consideration

Plan ahead Finance and Operations contains planning tools to be used by supervisory personnel. The planning tools are useful and time-saving in relation to long-term planning. Use the tools for planning work tasks and absence, in addition to changing work time profiles or work tasks for employees for a specific period of time. Example Several employees are taking a three-week summer vacation in July. It saves time and improves planning in the summer months if supervisory personnel register the vacation beforehand instead of providing absence information on a daily basis during calculation and approval. The primary tools for planning ahead are: •

Profile calendar - Connect profiles to employees on specific days.

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Work planner - An add-in tool to the profile calendar enabling supervisors to plan two or three shift teams for the weeks ahead.

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Special days - Set up events for days that cannot be considered ordinary working days, for example national holidays.

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Planned absence - Schedule absence information in advance, for example vacation or long-term illness.

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Scheduled loan - Move employees to other calculation and approval groups for a limited period.

Resource scheduling Resource scheduling enables you to deploy your organization's resources efficiently and effectively when they are needed. Before you can run schedule resources, you must set up and define the resources, resource groups, resource capabilities, and resource requirements. Calendars and resources must be set up in the Organization administration module prior to using the Production control module. Resources are the physical equipment (more generally referred to as the "resources") that are used to create finished items. Because capacity on resources is limited, the time that the resources are available (their "working times") must be also being considered when assessing the amount of time, it will take to complete the item. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Operations resources Operations resources are the resources that are used to complete the production processes. They can be machines, tools, locations, people, or vendors that contribute to the production of an item or to completing a project. Open Organization administration > Common > Resources > Resources to set up and maintain resources. Operations resource properties are special attributes that you can assign to your resources for use in the scheduling process. Properties that you set up can be assigned to working time templates in the Working time templates form. A capability is the ability of a resource to perform a given activity relevant to production and the scheduling of resources for production. Capabilities are assigned to an operations resource. A resource can have more than one capability assigned to it and a capability may be assigned to more than one resource. Capabilities can also be assigned to resources on a temporary basis by defining a start date and expiration date on the capability assignment. Capabilities that have expired on a resource will prevent the resource being scheduled for production if the production requires that capability. A capability that has expired can be subsequently renewed. When defining resource requirements for a production route, you can specify one or more capabilities as requirements. When production scheduling is performed, the capabilities defined in the resource requirements on the route operation are matched with the capabilities defined for the resources. The resources with capabilities that satisfy the requirements are then selected.

Resource groups You should create resource groups before you create the operations resources that you will use in your production. These groups should be organized according to the logic and complexity of your manufacturing environment. The operations resources in a group should perform similar functions and share similar attributes so that they can be used interchangeably during scheduling. For example, you can group machines and machine operators that do the same type of work at the same capacity in one group and machines and machine operators that have other skills and capacities in another group. When you schedule production, you can select any machine or operator in the group to perform the operation. You can also use resource groups to manage system information. For example, if you post a particular resource group to the ledger, you do not have to post financial data for each of the operations resources individually.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Master planning Master planning allows companies determine and balance the future need for raw materials and capacity to meet company goals. Master planning assesses the following information. •

What is required to complete production(s)?

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What is currently available?

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What is needed (such as what must be manufactured, purchased, transferred, or set aside as safety stock)?

The Master plan calculates net requirements. It is based on actual current orders, and enables companies to control inventory replenishment on a short-term, day-to-day basis. Another term to describe it is the "Net requirements plan." It can also include a forecasted demand.

Production scheduling You can run scheduling after the production order has been created and estimated. Running scheduling raises the production order status to Scheduled. Since production cycle is sequential, if the production order has not already been estimated before it is scheduled, an estimation of the projected cost is run automatically. Scheduling is an important central step in the production's life cycle, whether production is run in-house, or outsourced to a subcontractor or vendor. It is an iterative activity that involves coordinating complex elements of the production process to find the most optimal delivery date. The main production scheduling concepts include the following. •

Scheduling options o o o o o

•

Scheduling direction Finite and infinite capacity Efficiency Finite materials

Resource allocation

Reschedule a resource

Gantt charts in connection with job scheduling o o o

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Scheduling levels: operation scheduling and job scheduling

Reschedule a job or operation Reschedule an order Cancel scheduling changes

Managing outsourced production schedules using subcontractors

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Configure manufacturing execution Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/5configure-manufacturing-execution

Set up parameters Before you set up production-related parameters, you must set up the manufacturing execution parameters that are required for using production features. Production parameter settings should always reflect your production environment. Production parameters determine when raw materials are deducted from stock in the production process. These parameters also determine what information is reported in other areas in Dynamics 365 for Finance and Operations regarding the execution and completion of production orders in manufacturing execution. Go to Production control > Setup > Manufacturing execution > Manufacturing execution parameters to set up manufacturing execution parameters. In the General tab consider the following fields: •

Use password - Select the check box if workers are required to use a PIN code for access to the terminal after the identification number is entered. When using terminals for time and job registration, PIN codes should be enabled to prevent workers from registering using an incorrect worker ID. PIN codes are activated by default. Remember to insert a PIN code for each worker in the Workers page.

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Use badge ID - Use Worker badge ID as identification instead of the Personnel number.

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Permanent teams - Select the check box to save pilot/assistant relations after clock-out registration for workers who registered either as assistants to other workers, or workers functioning as team pilots. This enables Finance and Operations to automatically re-create the teams the following work day. The first worker in the team who clocks in the following work day, becomes the pilot, and the other members of the team are automatically registered as assistants when they clock in. The pilot makes all the registrations for the team during the day.

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Job table synchronization - Select how to synchronize the Time and attendance job table with base data. If you select Online, every new or edited job will immediately be transferred or synchronized to the Time and attendance job table. If you select Offline, the job table must be updated periodically.

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Registration error mode - Specify whether registration should be prohibited or auto corrected if an error in raw registrations is detected.

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Get registration time from - Select where the registration time is taken from when a registration is made. The choices are Legal entity and User.

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Bar code setup - Select the type of bar code to be printed on items such as worker badges and job cards.

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Report as finished - Select the status to be displayed on production jobs when a worker reports feedback in the Job registration form. The choices are In progress, Stopped, and Completed. It is important to select the correct combination of parameters to avoid registering erroneous BOM consumption. For example, by selecting the correct combination, you avoid deducting materials two times from stock or not deducting them at all.

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Inventory adjustment - Select default inventory adjustment journal.

Configure job card terminals Go to Production control > Setup > Manufacturing execution > Configure job card terminals to configure job card terminals. The Setup of Action Pane button on a job card allows you to configure Action Pane configuration for users who are using the selected job card type.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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The Setup of grids button on a specific job card allows you to select fields which should appear and how they should appear for users who are using the selected job card type.

Control production with manufacturing execution Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/6control-production

Production feedback When workers register time and item consumption on production jobs that have been set up to use Time and attendance, the registrations are posted on the relevant production order. You can update operation quantity and status feedback when a worker has completed a production job, or when a process job is underway. Providing feedback regularly throughout the production process helps to improve inventory and production management. In the Report as finished field group in the Production parameters page, you can specify how a production order should be updated when the last job of the production order is reported as finished in Production control. The Production control > Manufacturing execution > Job card terminal page is typically opened from several terminals or locations throughout the shop floor. You need to select a configuration and click OK.

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In the Select resource and action page, select the resource group from which you want to move operations (jobs). Then click Open resource group.

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Production orders overview The production order contains information about what is to be produced, how much (quantity), and the planned finish date. The system assigns an order status to each step in the life cycle of the order. The status shows where the item is in the production process. In companies where production is conducted in-house, production orders are frequently created for the following reasons: •

Meet sales demand when inventory is insufficient.

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Supply a BOM as subassemblies to other items in demand.

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Meet forecasted end item demand.

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Increase safety stock.

If a production, or part of a production, is subcontracted and the component items are released and provided to the vendor, the subcontracted item must be created as a BOM. If the component that the vendor is producing is a sub-BOM, the line type Vendor must be used. When the production order producing the item is estimated, Finance and Operations automatically creates a vendor purchase order for the produced component item. If the vendor's capacity is not scheduled, do not attach the route for the sub-BOM. When no route is attached, the delivery time for the sub-BOM is taken from the component items' released products' base data. If you want to schedule the vendor's capacity, create the route for the component item and specify Vendor as the resource on the appropriate lines.

Production order process overview The creation of a production order is essentially a request to start the manufacturing of the quantity of items, specified on the order. All information associated with the item that is to be produced is contained in the production order. Production orders contain a list of raw materials from the BOM, the resources that will be used, the routes, and the operations. Each component of information in a production order can be modified, copied, and used to meet the requirements of the manufacturing facility. Whether the legal entity produces items that are made to order, made to stock, or engineered to order, the Production control module enables the manufacturing facility to change production orders so that they are streamlined to their specific production requirements. The production of items follows a sequential production life cycle. The life cycle reflects the actual steps taken to manufacture an item. It begins with the creation of a production order and ends with a finished, manufactured item that is ready for the customer.

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Production order statuses The status on the production order reflects the sequential step of the production life cycle. A production order may have the following statuses: •

Created - Status of the production order when it is first created.

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Estimated - Status of the production order after you run a material and cost estimation.

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Scheduled - Status after you run operation or job scheduling.

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Released - Status when production orders are scheduled and released to production. Only production orders with this status or higher such as Started, Report as finished and Ended are available in the Job registration form.

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Started - Status of the production order when production starts.

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Reported as finished - Status of the production order when production is finished.

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Ended - Status of the production order after final costs are applied, the item is complete, and the order is no longer active.

Jobs Job scheduling is used to produce an overall schedule for the jobs that are to be performed in the resources in the manufacturing facility, or on the shop floor. It explodes all operations in the resources into their specific jobs. It also dates and time-schedules them in the order specified by the production route. As stated, you can run job scheduling alone or following operations scheduling. A shop supervisor or manager can reprioritize jobs in a worker's job list. For example, a production may have been upgraded to a rush order that has to be completed as soon as possible. Consequently, the supervisor must be able to reprioritize jobs to make sure that all relevant jobs get the highest priority. A shop supervisor or manager can also prioritize jobs in a worker's job list and set the jobs to High priority. This is useful if you want to make sure that a worker does not change the sequence for certain jobs in his or her job list. All the jobs connected to a specific operation will be marked as High priority and moved to the top of the job list. This means that if an operation consists of three jobs, and you selected only one of those jobs, all three jobs will automatically be moved and set to High priority.

Resources An operations resource consists of one or more people or machines with identical capabilities that are considered as one unit for managing the planning of capacity requirements and detailed scheduling. After an operations resource is created, you can assign it to a resource group and specific productions. When you reassign resources to different resource groups, use the Expiration field to specify when the resource can be scheduled in production. That way, you share a resource across more than one site.

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You can create resources without assigning them to a resource group. However, a resource must be assigned to a resource group before it can be scheduled to perform work. A resource can only be assigned to one resource group at a time. Resources are assigned jobs during the job scheduling process. Job scheduling is the detailed planning of capacity and separates each operation into its individual tasks or jobs.

Documents In Manufacturing execution, you can view documents attached to jobs. For example, files can contain production instructions or a diagram. Workers can view the documents in the Job card terminal page when they start jobs or continue to work on jobs. You can attach documents or files to a product, a BOM, a production, or an operation. Settings in the Document groups page determine whether a worker must read instructions before they start a particular job in the Job registration page.

Configuring time and attendance workflows There are several benefits of using the time and attendance workflows in your organization: •

Consistent processes - The workflow system lets you define the approval process for specific documents. By default, you can only have one approver for registrations. By using the Time and attendance workflows, you can include multiple approvers, or include checks for certain situations. The workflows help ensure that documents are processed and approved in a consistent and efficient manner.

•

Process visibility - The workflow system lets you track the status, history, and performance metrics of a specific workflow instance. If a manager does not approve the registrations in a timely fashion it can be escalated to others or you can use the default reports to analyze this information. This helps you determine whether changes should be made to the workflow to improve efficiency.

•

Centralized work list - Shop Supervisors and Production Managers can view a centralized work list to view the workflow tasks and approvals assigned to them.

For more information on how to create a workflow please refer to Work with workflows in Dynamics 365 for Finance and Operations

Exercises - Manufacturing execution Before you begin: To get the most benefit from these exercises, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS).

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Exercises 1.

Backflush on operations

Automatic route consumption on setup jobs

Test the parameter setup

Use manufacturing execution

Backflush on operations The Production manager decided that the best way to post picking lists is to use the Operation quantity feedback (backflush on operations) method. If the actual consumption on BOM items differs from the estimated consumption, the employee can enter the actual item consumption when providing quantity feedback. 1.

Open Production control > Setup > Manufacturing execution > Production order defaults.

On the Start tab, select Status + quantity in the Update start on-line field

In the Automatic BOM consumption field, select Never.

Click the Operations tab.

Set the Setup option to Yes.

In the Automatic BOM consumption field, select Always.

Click the Report as finished tab.

In the Update finished report on-line field, select Status + Quantity.

In the Automatic BOM consumption field, select Never.

10. Close the Production order defaults form.

Automatic route consumption on setup jobs The estimation on operation setup is accurate, so the Production manager decides that it is not necessary for employees to register on setup jobs. The time consumption on setup jobs must be posted automatically. 1.

Open Production control > Setup > Routes > Route groups.

From the list, select Sfc Shop Floor Control Routing Group.

Click Edit.

On the General FastTab, in the Automatic route consumption group, enable the Setup time field.

Close the Route groups page.

Open Production control > Setup > Manufacturing execution > Production order defaults.

On the Start tab, in the Automatic route consumption field, select Route group dependent.

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Enable the Post route card now field.

Close the Production order defaults page.

Test the parameter setup In the previous exercises, you changed the picking list posting to backflush on operations, and arranged posting of setup time on a production order to be done automatically when you start a new production. Now, you need to test the setup. 1.

Open Organization administration > Number sequences > Number sequences.

Select Number sequence code "Prod_128", Name "Production Journal", Next "1900" or higher.

Click Edit in the Maintain group.

Click to expand Scope parameters FastTab, if it is not expanded already.

Verify that Company is "USMF".

Click to expand General FastTab, if it is not expanded already.

verify that Continuous field is set to No.

Close the Number sequences page.

To run the Synchronize job table periodic job, follow these steps. 1.

Open Production control > Periodic tasks > Update entities > Synchronize job table.

Enable all four options which are; Synchronize production, Synchronize Time and attendance, Synchronize project and Synchronize HRM absence.

Click OK. This process may take several minutes to complete.

Use Manufacturing execution You need to enable time registration for Shannon the machine operator in USMF. Shannon needs to use the Job card terminal to control the execution of the production order. 1.

Go to Human resources > Workers > Workers.

Use the Quick Filter to filter on the Name field with a value of 'SHANNON'.

Click Activate on registration terminals.

In the Calculation group field, enter or select Man

In the Default calculation group field, enter or select Man

In the Approval group field, enter or select AdmMan

In the Standard profile field, enter or select Standard

In the Profile group field, enter or select Man

Select Yes in the Use timecard field.

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10. In the Configuration field, enter or select Production 11. Select Yes in the Supervisor options field. 12. Click OK. 13. In the list, click on the Shannon link id to get to the Details page. 14. Click the Time registration tab. 15. Click Edit. 16. In the Identification field, type '069'. 17. In the Badge ID field, type '069'. 18. Click Save. 19. Close the page. 20. Go to Production control > Manufacturing execution > Job card device. 21. In the Personnel number field, type '069'. 22. Click Log in. 23. Click Start job. 24. Set Quantity to start to '1.00'. 25. Click OK. 26. Click Report progress. 27. Set Error quantity to '1.00'. 28. In the Error cause field, enter 'Material'. 29. Click OK. 30. Click Break. 31. In the list, select break from work 32. Click OK. 33. Click Stop break. 34. Click Activity. 35. In the list, find and select Equipment repair 36. Click OK. 37. Click OK. 38. Set Error quantity to '2.00'. 39. In the Error cause field, enter 'Machine'. 40. Click OK. 41. Click Close. 42. Click Next job. 43. Click Previous job.

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44. Click Report progress. 45. Set Good quantity to '5.00'. 46. In the Job status field, enter 'Completed'. 47. Click OK. 48. Close the page.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/8knowledge-check

Work with Manufacturing execution in Dynamics 365 for Finance and Operations knowledge check 1.

With which one of the following tasks, a worker can register time and item consumption on each job? a) Manufacturing execution b) Job list c)

d) Job bundling 2.

With which one of the following tasks, a worker can make registrations on materials that are used on the shop floor, but that aren't directly related to production jobs? a) Register on inventory b) Job list c)

d) Job bundling 3.

With which one of the following tasks, a worker can start more than one job at the same time on the Job card terminal page? a) Register on inventory b) Job list c)

d) Job bundling

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Summary Link: https://docs.microsoft.com/en-us/learn/modules/work-with-manufacturing-execution/9summary Production integration of Manufacturing execution to the Production control module is essential to get optimal use of the Manufacturing execution module. Companies must set up various production parameter settings in Manufacturing execution to reflect production requirements. Some key issues to consider are the: •

Level of scheduling when planning production orders (jobs or operations)

•

Time of posting of picking lists during execution of production orders

•

Calculating methods used for calculating time consumption and costs on production orders

•

Allocation of time when bundling operations or jobs.

Companies must test the production integration setup in Manufacturing execution before going live with the installation to verify that the setup meets production requirements.

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Module 7: Get Started with Product Configuration Product configuration is a constraint-based product configuration tool that uses the Microsoft Solver Foundation (MSF) product technology that is designed for modeling and constraint solving. You can use product configuration to create and maintain product configuration models, and to reuse components and attribute types. Attributes, constraints, subcomponents, user requirements, Bill of Material (BOM) lines, and route operations are implicitly reused when you reuse a component. Components can also reuse table constraint definitions. This module explains how to get started with product configurator in Finance and Operations. Lessons •

Introduction

•

Understand the product configuration model

•

Build a product configuration model

•

Practice Labs

•

Module summary

In this module you learned about: •

The terminology that is important for understanding the concepts and processes that are associated with product configuration

•

Product configuration end-to-end scenario

•

The different areas that span the product configuration process

•

The product configuration model

•

How to build a product configuration model

Get started with product configuration in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/ Product configuration is a constraint-based product configuration tool that uses the Microsoft Solver Foundation (MSF) product technology that is designed for modeling and constraint solving. You can use product configuration to create and maintain product configuration models, and to reuse components and attribute types in Dynamics 365 for Finance and Operations. In this module you will learn about:

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•

The terminology that is important for understanding the concepts and processes that are associated with product configuration

•

Product configuration end-to-end scenario

•

The different areas that span the product configuration process

•

The product configuration model

•

How to build a product configuration model

Introduction to product configuration Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/1introduction-product-configuration

Overview Product configuration is a flexible tool that promotes reusability for areas that require constant setup, and it lets users quickly satisfy customer requirements by providing access to frequently selected data by using configuration templates. This can save you time when you configure items on sales orders, sales quotations, purchase orders, and production orders. The product configuration user interface also benefits users by providing a visual overview of the product configuration model structure, and lets you easily arrange components and attributes by organizing them into logical groups.

Why use a constraint-based product configuration model? The need to configure a product to meet special requirements is quickly becoming the rule instead of the exception in both business-to-business and business-to-consumer relationships. For a manufacturer, the ability to support configure-to-order scenarios represents an opportunity to more carefully respond to the needs of the customer and reduce high costs tied to inventory. Stocking semifinished goods in the form of generic components instead of finished products can help achieve this goal.

Terminology and concepts •

Microsoft Solver Foundation - Product configuration uses MSF to solve expression constraints and conditions. Microsoft Solver Foundation is used to find one or more valid solutions, and to eliminate invalid values for product configuration models.

•

Optimization Modeling Language - MSF includes an algebraic modeling language called Optimization Modeling Language (OML) that is designed exclusively for modeling and solving. The language includes identifiers, comments, string literals, Boolean constants, and arbitrary numeric literals.

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•

Product - The term product is used to provide a single entity that represents both tangible and intangible deliverables. Items (tangible) and services (intangible) are both supported.

•

Product Configuration Model - Represents a generic product structure that can be differentiated to specific instances based on values selected by the user.

•

Distinct Product - A distinct product represents the first level of specialization of the generic product term. It might be a shirt or a home theater system.

•

Product master - A product master serves as a template for models for variants. The variants of a product master can be predefined or created in sales scenarios by using product configuration.

•

Product Configuration - A product configuration is the representation of a product model with specific values selected for all mandatory attributes.

•

Configuration Template - A partly completed product configuration. Its objective is both to reduce the time that is required to configure common product variants and also to promote particular configurations.

•

Component Instance - A component instance represents an instantiation of a component in the product configuration. One component can be instantiated into several component instances. For example, a TV component can be instantiated into a "kitchen TV" and a "living room TV" in the product configuration.

•

Attribute Value - A specific value for a product characteristic. For example, the color "red" for the attribute type named "color."

•

Attribute Group - An attribute group can be defined to increase the usability of the configuration user interface. A subset of attributes defined for a component can be grouped and a title is attached to the group.

•

Domain - A set of all permitted values. In the product model context, it represents the permitted attribute values. For example, all instances in an enumerated text type attribute.

•

Configuration User Interface - The User interface page displays the attribute groups that are created to help a person configure a product, because the selections are arranged in a certain context by the product designer.

•

Translation Text - Text translated from the base text with the purpose of making the configuration user interface available in different locales. For example, the attribute value "red" can be translated into the French text "rouge."

•

Version - The version represents the relationship between the product configuration model and a product master. An approved and activated version must exist to configure an order line.

•

Constraint Model - The concept of constraint models is used to describe our product models. The number of permitted attribute and component combinations is reduced by imposing constraints on the model.

•

Expression Constraint - A constraint type, in the form of an expression. The MSF constraint solver will be used. All constraint expressions must follow the syntax defined by MSF.

•

Table Constraint - A constraint type specifying allowed attribute combinations. Each row in the table represents a legal combination of values. User-defined table constraints consist of Attribute types. www.dynamicscompanions.com Dynamics Companions

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Understand the product configuration model Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/2understand-product-configuration-model

Product configuration process The following figure illustrates the flow and activities needed to create a configuration model:

Now let's discuss the processes in the above diagram. Go to Product information management > Setup > Product information management parameters to set up Constraint-Based product configuration models parameters before you create a product configuration model. The following parameters are available: â&#x20AC;˘

The number sequence for Constraint-Based product configuration model that uniquely identifies all the configurations that you create. A number sequence must be defined to uniquely identify the product variants that you create.

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For example, when Susan the Order Processor configures an item on a sales order, a number is pulled from this number sequence. The number is stored in the Configuration dimension field for the product on the order line. •

The Item lookup method determines whether configurable items display together with all the other items, or if you want them to display on a separate tab.

The following values are used: •

Default: displays product configuration models on a list together with other items that are available when you select an item on a sales order line.

•

Configurable displays product configuration models on a separate tab when you select an item on a sales order line.

•

The Configuration documentation type lets you add a note to the order line. The note will show the results of the configuration that you just created.

•

The Default configuration ID sets the initial name of the configuration for product variants that, as a standard, are released together with constraint-based product masters.

•

The Use cache for configuration is used to reduce the amount of time it takes to launch the Product configuration models page.

•

The Attach enables you to attach a sales price breakdown that is created for a product configuration model from a sales order line. Select this option to choose a format such as a file or an image for the sales price break down.

•

The Default currency for a price configuration model. You must specify a default currency if you want to set up a price model for a product configuration model.

After setup the parameters, there are several processes are typically used when you build a product configuration model.

Components Components are the main building blocks of a product configuration model and most information about the model is related to them. Components are defined one time and can be used many times in one or more product configuration models.

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After you assign a component to a product configuration model, you can add information to the component so that it suits that particular product configuration model. This can include information about user requirements, attributes, constraints BOM lines, and route operations. A component can also include other components as subcomponents. You can use a component multiple times in a product configuration model, and the component can be reused in multiple product configuration models. For example, when you are creating a product configuration model for a home theater system, you can create components such as a video system and audio system. The audio system can also consist of two components such as receiver and speakers. The receiver and speakers are known as subcomponents of the audio system. Only items that have constraint-based configuration as the Configuration technology in the Released product details form can be used as components to build a product configuration model. Otherwise, the item cannot be selected on the Subcomponents FastTab in the Constraint-based product configuration model details form. â&#x20AC;˘

Attribute types - Attribute types specify the set of data types or domains for attributes that are used in a product configuration model. The following data types can be used in a product configuration model: text, boolean, integer, and decimal.

You can use decimal values, text without a fixed list, and integers without ranges in a product configuration model. However, you cannot use these data types when you write a constraint. Microsoft Solver Foundation (MSF) constraint solver only supports text with a fixed list, boolean values, and integers with ranges. Currency and DateTime data types are displayed in the list in the Type field. However, they cannot be used in a product configuration model.

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•

Product configuration model - A product configuration model is created to represent a generic product structure.

•

Attributes - Each component has one or more attributes that identify its properties. The attributes are what the users will have to select from during the configuration process.

Product model attributes are defined by using a domain that restricts the values that a user can select. Attribute values can be used in constraints to additionally reduce variability. You can also specify that an attribute value is used only when a certain condition is present. Like expression constraints, conditions are written as an Optimization Modeling Language (OML) expression. Attributes describe the properties of the components. You can use attributes to specify the features that can be selected when a distinct product variant is configured. Each component has one or more attributes that identify its properties. The attributes are what you will select from during the configuration process. A default value can be set for an attribute. The default value is used in the configuration user interface when the product configuration model is configured. Attributes can be mandatory. If an attribute is mandatory, a value must be set when the product is configured. You can also set a condition for a mandatory attribute. If the condition is met, a value must be entered for the mandatory attribute. •

Constraints - Constraints describe the restrictions of the product configuration model. Constraints are used to guarantee that only valid values are selected when the product configuration model is configured.

Product configuration supports expression constraints and table constraints. Use expression constraints to express relations between attributes to confirm that compatible values are selected when you configure a product.

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•

Table constraints - Are expressed in a table that explicitly defines the combinations to turn on for a specified set of attributes. The constraints are processed by the MSF constraint solver.

•

Calculations - Represent a mechanism for performing arithmetic operations in a configuration model. For example, a calculation can determine the length of a specific piece of raw material or the processing time for a polishing operation. Calculations are imperative and set the value for a target attribute after all the attribute values that are included in the calculation expression become available.

•

Subcomponents - Reflect the tree structure of the product configuration model. Because subcomponents reference existing components, they encourage the reuse of components in multiple product configuration models.

A subcomponent is used to create a parent/child relationship between two components. •

User requirements - User requirements represent a user-friendly abstraction between user requirements and specific components and attributes. A user requirement has all the properties of a subcomponent. However, you cannot map a user requirement to a product master.

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BOM lines - BOM lines are included to identify the manufacturing BOM for each component. A BOM line must reference a product master or any released product, and all properties can be set to a fixed value or mapped to an attribute.

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Route operations - Route operations are included to identify the manufacturing route and must reference a defined operation.

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•

Tailoring the configuration user interface - Organize and arrange attributes and subcomponents into attribute groups or by moving them up and down in the user interface tree structure.

•

Validating a product configuration model - Validation of a product configuration model can occur on several levels in the model and could include validation for the following: constraints, BOM line conditions, route operation conditions, or the complete product configuration model.

•

Testing a product configuration model - After you set up a product configuration model, you can test that the model performs as expected by simulating the configuration process.

•

Building Configuration Templates - One or more configuration templates can be created to either speed up the configuration process or promote certain attribute combinations. The latter case could be a response to a sales campaign that places the focus on a certain set of product features.

•

Adding Configuration Translations - If the product is to be sold in different countries/regions, translations can be created for all text appearing in the configuration user interface.

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â&#x20AC;˘

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Creating, Approving, and Activating Versions -The final and most important step in the process is to create a version for the product configuration model. The version represents the relationship between the product master and the product configuration model. You can select the version to configure an order or quotation line. A version must be approved and activated before it can be used in a configuration session. Product Configuration Access The purpose of the configuration process is to create a distinct variant of the product that meets the requirements of the customer.

Scenario Emil, the Product designer, must create a new product model from scratch that includes several components for a home theater system, and make the product model available in many countries/regions. Attributes must be defined that characterize the capabilities for each component, and constraints must be created for the components to restrict the allowed product variants. BOM lines are added to represent the parts that are required to build the product, together with the route operations. Different types of services must be offered to the customer. These services allow for setup and installation of the home theater system, and include repair services. Emil must be able to test the configuration, and verify that the attributes and constraints are correctly defined. To help speed up the configuration process when Susan enters customer sales orders, Emil will create templates for the most popular versions of the home theater system. Susan, the Order Processor, must be able to select from the templates that Emil created, or manually configure the sales order by using the options that Emil has provided to satisfy the customer requirements.

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Build a product configuration model Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/3-buildproduct-configuration-model

Product configuration As many products have become commodities, a need to differentiate them has arisen. The immediate response of manufacturers to this challenge has been to create variants of each product, so that customers have more alternatives. This strategy has led to increased forecast challenges, and also to an increase in inventory cost and unsold products that become obsolete. The key to success here is to carefully analyze the product portfolio, and to look for patterns in both product features and processes. The goal is to identify generic components that can be manufactured by the same equipment and used in all variants. The Product configuration feature set includes a user interface (UI) that provides a visual overview of the product configuration model structure, and also a declarative constraint syntax that doesn't have to be compiled. Therefore, companies that want to support a configuration practice can get started more easily. As the following sections explain, a product designer no longer requires the support of a developer to build a product configuration model, test it, and release it to the sales organization.

Building a product configuration model There are several approaches that a user can take to build a product configuration model. One option is to follow a sequential flow by first creating all the reference data, such as product masters, distinct products, and operational resources, and then including them as components, bill of materials (BOM) lines, route operations, and other elements of the product configuration model. Alternatively, you can select a more iterative approach by first creating the model and then adding reference data as the need arises. Let's review the building blocks of a product configuration model:

Components A product configuration model consists of one or more components that are tied together through subcomponent relationships. Components are defined one time, and can then be used many times in one or more product configuration models. The components are the main building blocks of a product configuration model, and nearly all information about the model is related to them.

Attributes Each component has one or more attributes that identify its properties. The attributes are what users will choose during the configuration process. Attributes control both inter-component and intra-component

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relationships through inclusion in constraints or calculations. Through conditions that are applied to BOM lines, the attributes can be used to determine which physical parts the configured product will consist of. Additionally, an attribute can control the property of a BOM line through a mapping mechanism. Similar functionality exists for route operations regarding both inclusion and property settings.

Expression constraints and table constraints in product configuration models Constraints control the attribute values that you can select when you configure products for a sales order, sales quotation, purchase order, or production order. You can use expression constraints or table constraints, depending on how you prefer to build the constraints. Constraints are used to control the attribute values that you can select when you configure products for a sales order, sales quotation, purchase order, or production order.

Expression constraints Use of a constraint-based product configuration model implies that some limitations exist when the user selects values for the various attributes. Such limitations can be implemented as expression constraints by using the Optimization Modeling Language (OML). Expression constraints are characterized by an expression that uses arithmetic and Boolean operators and functions. An expression constraint is written for a specific component in a product configuration model. It can't be reused by or shared with another component. However, the expression constraints for a component can reference attributes of the component's subcomponents. Alternatively, a constraint can be implemented in the form of a table constraint.

Table constraints A table constraint is included in a product configuration model by referencing the table constraint definition and mapping the relevant attributes in the model to the columns in the table constraint. Table constraints can be user-defined or system-defined: •

A user-defined table constraint is built by the user. The user selects a combination of attribute types to represent the columns of the table and then enters values from the domains of the selected attribute types to form the rows in the table constraint. A user-defined table constraint is static and consists of columns that represent attribute types. Each row is a legal combination of attribute values taken from the attribute types.

•

A system-defined table constraint is defined by selecting which Finance and Operations table to use as a reference and then selecting fields from this table to form the columns in the constraint. The rows of the table constraint are the rows of the Finance and Operations table that are present at configuration time.

Table constraints list the combinations of values that are allowed for attributes when you configure a product. Table constraint definitions can be used generically. When you create a table constraint for a

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component in a product configuration model, you select a table constraint definition. To create the combinations that are allowed, you add attributes of specific types to the components. Each attribute type has a specific value. This example shows how you can limit the configuration of a speaker to specific cabinet finishes and fronts. The first table shows the cabinet finishes and fronts that are generally available for configuration. The values are defined for the Cabinet finish and Front grill attribute types. Attribute type Values Cabinet finish Black, Oak, Rosewood, White Front grill

Black, Metal, White

The next table shows the combinations that are defined by the Color and finish table constraint. By using this table constraint, you can configure a speaker that has an oak finish and a black grill, a Rosewood finish and a white grill, and so on. Finish

Grill

Oak

Black

Rosewood White White

Black

White

Black

Metal

Syntax: You must use Optimization Modeling Language (OML) syntax when you write constraints. The system uses Microsoft Solver Foundation constraint solver to solve the constraints.

Using table constraints or expression constraints You can use either expression constraints or table constraints, depending on how you prefer to build the constraints. You build a table constraint as a matrix, whereas an expression constraint is an individual statement. When you configure a product, it doesn't matter what kind of constraint is used. The following example shows how the two methods differ. When you configure a product by using the following constraint setups, these combinations are allowed: â&#x20AC;˘

A product in the color Black, and in size 30 or 50

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A product in the color Red and in size 20

Table constraint setup: Color Size Black 30 Black 50 Red

Expression constraint setup (Color == "Black" & (size == "30" | size == "50")) | (color == "Red" & size = "20") You can write an expression constraint by using either the available prefix operators or infix notation. For the Min, Max, and Abs operators, you can't use infix notation. These operators are included as standard operators in most programming languages.

User requirements A user requirement has all the constituents of a subcomponent. The only difference is that a user requirement isn't bound to a product master. The practical effect of this difference is that any BOM lines or route operation that are defined in the context of a user requirement are collapsed into the parent component BOM structure or route. This behavior resembles the behavior of a phantom BOM.

BOM lines BOM lines are included to identify the manufacturing BOM for each component. A BOM line must reference an item, and all item properties can be set to a fixed value or mapped to an attribute.

Route operations Route operations are included to identify the manufacturing route. A route operation must reference a defined operation, and all operation properties can be set to a fixed value. All properties except resource requirements can be mapped to an attribute instead of a value.

Validating and testing a product configuration model After you add information to the product configuration model, it is time to check that the information is correct and that it displays in a logical and understandable format. When you must make corrections, you can change information in the product configuration model after validating and testing. The validation and testing of the product configuration model can be performed repeatedly as you correct the errors and refine the information in the product configuration model.

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Validation of a product configuration model can occur on several levels in the model and can therefore cover various scopes. The lowest level is for a single expression constraint. In this case, validation is typically performed by the product designer to verify that the syntax of an expression is correct. Similarly, a condition for a BOM line or a route operation can be validated in isolation. Validation can also be done for a user-defined table constraint definition. In this case, the user can verify that the values that are entered for each field are inside the domain of the corresponding attribute types. Finally, validation can be done for a complete product configuration model to verify that the complete syntax is correct, and that all naming and modeling conventions have been respected. Validating checks that the constraints for the product configuration model are valid. If the syntax for any constraint is incorrect, the system will display an Infolog message. You can continue to work with the product configuration model. However, you will not have a passing validation or be able to test it. We recommend that you validate the product configuration model before you test it. If you test the product configuration model first, and errors are present, the system displays a generic Infolog message that will not help you resolve the error.

Testing Testing displays the Configure line form and you can visually inspect the configuration experience and select the values for all the defined attributes. The purpose of testing is for the product designer to verify that the complete configuration experience is in order, for example, attribute values, constraints, default values, mandatory and hidden attributes, and so on. You can review that the attribute groups that you created display the attributes for the components and subcomponents the way that you intended. Testing a model is similar to running an actual configuration session. The user can walk through the configuration pages and verify that the model structure supports the configuration process. The user can verify that the attribute values are correct, and that the attribute descriptions guide the user to select the correct values. Finally, after a test session is completed, the system tries to create the BOM and the route that corresponds to the selected attribute values, and presents an error message if anything goes wrong.

The Configuration pages To navigate between components, click Next, or click a component in the product configuration model tree to set focus on it.

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Finalizing a model for configuration When a product configuration model is ready to be used in configure-to-order scenarios, a version must be created. However, there are several options that can enhance the modeling experience.

User interface The configuration UI can be modified by introducing attribute groups in one or more subcomponents. Such a grouping can highlight the relationships between specific attributes and help the configuration user identify the area of the product that is currently in focus.

Templates One or more configuration templates can be created to speed up the configuration process. Alternatively, templates can be created to promote specific attribute combinations, such as when a sales campaign focuses on a specific set of product features. A configuration template is a completely or partly configured product configuration model. Configuration templates are created to reduce the work needed to configure products. One or more configuration templates can be created for a product configuration model to either speed up the configuration process or promote specific product attribute combinations. For example, when you configure a sales order line, you can load a configuration template, and the configuration settings are included. Promoting specific product attribute combinations could be a response to a sales campaign that places focus on a certain set of product features. Your company could have excess inventory for components with specific attributes that it wants to sell quickly. You can create a configuration template that uses the attributes of these components to help the order entry team with the increased demand that is expected.

Translations If the product will be sold in different countries/regions, translations can be created for all text that appears in the configuration UI. This text includes not only name and description fields, but also attribute text values. With the translation functionality included in the product configuration feature, you can create translated text for the name and descriptions of product configuration models, components, subcomponents, attributes, attribute groups, and configuration templates.

Versions The last and most important step in the finalization process is to create a version for the product configuration model.

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To configure an order line, an approved and activated version of the product configuration model must exist. A version represents the relationship between the product configuration model and a product master. If all three steps are not completed, the version cannot be used in a configuration session. The version represents the relationship between the product master, which can be selected for configuration on an order or quotation line, and the product configuration model. A version must be approved and activated before it can be used in a configuration session. A product configuration model that has an active version can be configured from a sales order, sales quotation, purchase order, and production order. Multiple versions of the product configuration model can be created that are valid for different date periods. Multiple versions can help track the number of orders that are created during specific dates. The number of orders created during specific dates helps evaluate company sales trends. To compile this type of data, you must review the From date and To date fields on the Versions form. You can then review the sales orders that have a configuration ID and the product that represents the version during the same date range.

Set up a product configuration model This unit describes the steps for setting up and creating a product configuration model. Task

Description

Create a product master.

Create a product master from the Product master list. Release the product master to all relevant companies. For a product master that is used as a version for a product configuration model or as a subcomponent, Constraintbased configuration must be selected as the configuration technology, and the configuration dimension must be selected only for the product dimension group.

Create components.

Create components on the Components page. Components are the building blocks of a product configuration model and can be reused in multiple product configuration models.

Create attribute types on the Attribute types page. Attribute types specify the set of data types for all attributes that are used in product configuration Create attribute types. models. Attributes of the Boolean, Text with a fixed list, and Integer with a range types list the set of values that are available when you configure a product variant based on a product configuration model. Create a product configuration model.

Create a product configuration model on the New product configuration model page.

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Description

Add attributes to a Create an attribute on the Attributes FastTab on the Constraint-based product configuration product configuration model details page. Attributes describe the features model. of the product configuration model. Create constraints on the Constraints FastTab on the Constraint-based Add constraints to a product configuration model details page. Constraints are limitations that a product configuration product configuration must satisfy. Constraints are either expression model. constraints or table constraints. Create subcomponents on the Subcomponents FastTab on the Constraintbased product configuration model details page. Subcomponents are Add subcomponents to related to components and are linked to items that represent the a product subcomponent. When you add subcomponents to a component, each configuration model. subcomponent should be associated with a constraint-based configurable product by using a BOM line. User requirements are similar to subcomponents, but they don't reference an Add user requirements item. You can think about user requirements as a phantom BOM. Any BOM to a product lines or route operations that are placed directly under the user requirement configuration model. will be collapsed into the parent component.

Calculations for product configuration models Calculations can be used for arithmetic or logical operations. They complement expression constraints in product configuration models. You can define calculations on the Constraint-based product configuration model details page and then build expressions for the calculations in the expression editor. A calculation is an element that you can use in a product configuration model. Calculations complement constraints by letting you use decimal numbers to calculate values when you configure a product. Additionally, calculations have a larger set of available operators than constraints have. Like a constraint, a calculation is associated with a specific component in a product configuration model, and can't be reused by or shared with another component. One important difference between calculations and constraints is that calculations are imperative (unidirectional), whereas constraints are declarative (bi-directional). A calculation consists of a target attribute and a calculation expression.

Target attribute A target attribute is an attribute that receives the result of the calculation expression. In the following expression, the target attribute is a tablecloth measurement:

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Expression: If [decimalAttribute1 <= decimalAttribute2, True, False] DecimalAttribute1 is the table length, and decimalAttribute2 is the tablecloth length. The expression returns the value True to the target attribute if decimalAttribute2 is greater than or equal to decimalAttribute1. Otherwise, the expression returns False. Therefore, the tablecloth measurement is acceptable if the tablecloth length is the same as or exceeds the length of the table. All attribute types that the product configurator supports can be set to target attributes, except text without a fixed list. The value of a target attribute cannot restrict the values of the input attributes, because calculations are unidirectional. Therefore, the value of the target attribute is set based on changes in the value of the input attributes, but a change in the value of the target doesn't affect the value of the input attributes. This behavior differs from the behavior for constraints. Constraints occur in both directions. Example: In the following expression, the target for the calculation is the length of a power cord, and the input value is a color: Expression: [If Color == "Green", 1.5, 1.0] When you configure the item, the length of the power cord is set to 1.5 if you specify Green as the value of color attribute. If you specify any other color, the length is set to 1.0. However, because calculations are unidirectional, the calculation doesn't set the value of the color attribute to Green if you specify a length of 1.5. If a target attribute is of the integer type, but a calculation generates a decimal number, only the integer part of the calculated result is returned. The decimal part is removed, and the result isn't rounded. For example, a result of 12.70 is shown as 12. Calculations occur when a value has been provided for all input attributes. You can overwrite the value that is calculated for the target attribute, unless the target attribute is set as hidden or read-only.

Set up a target attribute as hidden or read-only To set an attribute as hidden or read-only, follow these steps. 1.

Click Product information management > Products > Product configuration models.

Select a product configuration model, and then, on the Action Pane, click Edit.

On the Constraint-based product configuration model details page, select the attribute to use as a target attribute.

On the Attributes FastTab, select Hidden or Read-only.

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A calculation cannot overwrite the values that you set. The values that you set when you configure a product are the values that are used. The calculation that occurs when the input values in a calculation are changed can't overwrite the values that you provide for a specific attribute. If you remove an input value in a calculation, the value of the target attribute is also removed.

Error message - the model is in contradiction This errror message is shown when a calculation includes an error, or when a contradiction exists in one or more constraints. Here are some situations where errors can occur in calculations: •

A value is divided by 0 (zero).

•

A conflict exists between the following two elements: o o

•

The values that are available for an attribute and are limited by a constraint A value that is generated by a calculation

The values that are returned by the calculation are outside the domain of the attribute. An example is an integer from [1..10] that is calculated to 0.

Error message - after successfully validating a product model Calculations are not included in the validation. You must test the product configuration model to find errors in calculations. To test a product configuration model, follow these steps. 1.

Click Product information management > Products > Product configuration models.

Select a product configuration model, and then, on the Action Pane, in the Run group, click Test.

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System-defined and user-defined table constraints Now let's explains the two types of table constraints for components in a product configuration model user-defined and system-defined. Table constraints represent matrices of the allowed attribute combinations, where each row defines one set of possible attribute values. Table constraints represent matrices of the combinations of attributes that are allowed for components in a product configuration model. Each row in the table defines one set of possible attribute values. You can declare two types of constraints in a product configuration model: •

Expression constraint -- Create an expression that defines relations between attributes to guarantee that only compatible values can be selected during product configuration.

•

Table constraint -- Create a table that defines all the combinations that are allowed for a specified set of attributes. Two types of table constraints are available: user-defined table constraints and system-defined table constraints.

User-defined table constraints A user-defined table constraint is a type of matrix that is used to describe the combinations of attribute values that are defined by attribute types. For example, if you produce speakers, you can include columns for the cabinet finish and the front grill in the user-defined table constraint. The attribute type for the cabinet finish has four values, and the attribute type for the front grill has three values. Therefore, if constraints aren't used, there are 4 × 3 = 12 possible combinations. However, in this example, only six combinations are allowed, as shown in the following table.

This information is displayed on the Allowed combinations tab on the Edit table constraint page.

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System-defined table constraints A system-defined table constraint creates a dynamic mapping between an attribute type and a field in a table. When a system-defined table constraint is included in a product configuration model, the mapping guarantees that the data in the table is shown instead of the values of the attribute type. The result is a dynamic constraint, because the table contents can be modified (for example, by other modules). When you create a system-defined table constraint, you select a table, optionally define the query to use, and then associate attribute types to the fields in the selected table. The types of fields must match the types of attribute types. Before a table constraint can take effect on a product configuration model, the table constraint must be included in a constraint on one of the model's components. The procedure is to create a new constraint, select the table constraint type, and then select the table constraint definition to use. Finally, all fields in the table constraint must be mapped to attributes in the product configuration model. When you create a system-defined table constraint, you can select a table, define the query to use as an option, and associate attribute types to the fields on the selected table. The types of fields must match the types of attribute types. However, it is not required to match such values as enumeration values and integer ranges. The attribute type values are replaced by the values in the field from the selected table. After you create a systemdefined table constraint, you can add the constraint to a component, and then map the attribute to the column names in the table constraint.

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Solver strategy for product configuration A product configuration model can be formulated as a Constraint satisfaction problem (CSP). Microsoft Solver Foundation (MSF) provides two types of solver strategies to solve the CSPs that can be used from product configuration models. These solver strategies rely on heuristics (rules of thumb), which are used to determine the order that the variables of the CSPs are considered in when the problem is being solved. Heuristics can significantly affect performance when a problem or class of problems is being solved. In Finance and Operations, the solver strategy for product configuration models determines which solver is used with heuristics. The Default, Minimal domains first, and Top-down strategies use the two solvers from MSF, whereas the Z3 strategy uses the Z3 solver.

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Real customer implementation studies have shown that a change in the solver strategy for a product configuration model can reduce the response time from minutes to milliseconds. Therefore, it's worth the effort to try different solver strategies to find the most efficient strategy for your product configuration model.

Change the settings for the solver strategy To change the solver strategy, on the Product configuration models page, on the Action Pane, select Model properties. Then, in the Edit the model details dialog box, select a solver strategy. Currently, there is no logic that automatically detects which solver strategy will be the most efficient strategy for constraint-based product configuration. Therefore, you must try the solver strategies one by one. The following table provides recommendations about the solver strategy to use in various scenarios. Solver strategy

Use the strategy in this scenario

Default

The Default strategy has been optimized to solve models that rely on table constraints. Customer implementation studies have shown that this strategy is the most efficient strategy in scenarios where table constraints are used extensively.

Minimal domains first

The Minimal domains first and Top-down strategies are closely related. Customer implementation studies have shown that the Top-down strategy, outperforms the Minimal domains first strategy. However, the Minimal domains first strategy is kept in the product for backward compatibility. Both these solver strategies have been shown to be more efficient at solving models that contain several arithmetic expressions where no table constraints are used. However, in some cases, the Default strategy outperforms these two strategies. Therefore, remember to try each strategy.

The Minimal domains first and Top-down strategies are closely related. Customer implementation studies have shown that the Top-down strategy, outperforms the Minimal domains first strategy. However, the Minimal domains first strategy is kept in the product Top-down for backward compatibility. Both these solver strategies have been shown to be more efficient at solving models that contain several arithmetic expressions where no table constraints are used. However, in some cases, the Default strategy outperforms these two strategies. Therefore, remember to try each strategy. Z3

We recommend that you use the Z3 strategy as the default solver strategy. If you're concerned about performance and scalability, you can evaluate the other strategies.

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Reuse product configurations You can specify that you want to automatically reuse an existing configuration for a product. Then, when a user has completed a configuration session, the system verifies whether a configuration that matches the user's selections already exists. If a matching configuration is found, the configuration ID, corresponding bill of materials (BOM), and route are reused.

Requirements for reusing configurations To enable configurations to be reused, you must specify the following information for the components and attributes on the Product configuration model details page: •

Components and subcomponents - On the General FastTab, in the Reuse configurations field, select Yes.

•

Attributes - On the Attributes FastTab, select the Include in reuse option. This option appears only when the related component is enabled for reuse. If you don't select any attributes for reuse, the configuration is always reused, regardless of the user's selections during a configuration session. The attribute values in the existing configuration must match the user's selections. For example, if the user selects Blue as the color during a configuration session, the system verifies whether an existing configuration of the component has the color blue.

Resetting configuration reuse When you reset configuration reuse, previously created configurations are no longer considered. You might want to reset configuration reuse if the BOM or route was changed, but no related attributes were changed. You reset configuration reuse on the General FastTab for the component.

User requirements User requirements can also include soft requirements for a product, especially where you are more familiar with the product than the customer. When you add a user requirement to a product configuration

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model, you must add attributes and BOM lines to the corresponding component to represent the user requirement. You might have constraints that you want to use in multiple configuration models, or have BOMs or operations that you want to use across several models. The BOM and route operations of user requirements are pulled up into the parent item in a phantom BOM way. A phantom BOM is a BOM structure that is not an item. It represents the recipe of something that you do not intend to store as a unit. Scenario: The company USMF offers services to customers. These services include how to set up a product with several components, maintenance and repair of products, and how to refine or increase the overall performance of a product. These types of services can be added as a user requirement to the product configuration model. Emil, the Product designer at USMF must add a user requirement to the home entertainment system. This requirement will represent potential services the company offers to increase customer satisfaction. Contoso Entertainment Systems offers installation services, maintenance and repair services, and other professional services. After Emil adds the user requirement to the product configuration model, he adds attributes for each of the three types of services so that you can select the services when you configure the product. Finally, Emil adds BOM lines for each of the three types of services. When any of the services are selected during product configuration, the cost of the services will be included in the sales price of the home entertainment system.

BOM lines BOM lines are included in the product configuration model to identify the manufacturing BOM for each component. A BOM line can reference an item or a service, and all item properties can be set to a fixed value or mapped to an attribute. BOM lines are held together in a BOM structure that is created for the subcomponent and the item that is represented. Conditions for BOM lines can be used in a product configuration model to include or exclude a specific BOM line when you configure a product. When the condition is true, the designated BOM line and corresponding item number is included in the configured product.

Route operations Route operations are included in product configuration models to identify the manufacturing routes for the subcomponents. A production route in Finance and Operations is composed of a sequence of steps or operations which defines a manufacturing process. Similar to a production BOM, a route must be

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approved before it can be used, and it must also be marked as active. The approval and activation is completed by the system, and the user does not have to perform these manual steps. An operation in a route is attached to a specific resource or the capabilities that the resource must own. This defines a person, machine, tool, or vendor who will perform the work. A route can be defined and attached to more than one item exactly like an operation can be defined and attached to more than one route. A company can build up a library of operations that can be reused on many routes. A route only contains operations and does not depend on BOM components.

Preparing a product configuration model for release After you have built a product configuration model, and before it is ready to use in configure-to-order scenarios, there are several processes to finalize the product configuration model. You must create, approve, and activate a version for the product configuration model before you can use it to configure order lines. However, there are also several additional options that you can complete to complement the product configuration model and they include the following. •

Customizing the configuration user interface - The configuration user interface (UI) can be changed by introducing attribute groups in one or more subcomponents. These types of groupings can highlight the relationships between certain attributes, and help the user identify the area of the product that is currently being configured.

•

Validating and testing a product configuration model - Validating a product configuration model can occur on several levels and cover different scopes. Validation can vary from checking a single expression constraint to validating that a whole product configuration model has the correct Microsoft Solver Foundation (MSF) syntax and naming conventions. Testing a product configuration model resembles running an actual configuration session. With this process, the user can review the configuration screens for the components and subcomponents and verify the product configuration model structure is displayed as designed. Testing also includes testing constraint behavior and attribute values. If the user concludes a test session by clicking OK, the system will generate the corresponding Bill of Materials (BOM) and a route. If there are errors, the system displays a message to the user. If there are no errors, the BOM and route are deleted without a message displayed.

•

Building configuration templates - Configuration templates are created to encourage specific attribute combinations. They can facilitate the configuration process by predicting the customers' needs by providing popular versions of the product.

•

Adding configuration translations - When the product is sold in different countries/regions, the manufacturer might provide translations. Translations can be created for all text that displays in the configuration user interface.

•

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model. After you activate the version, you can configure an order line by using the product that represents the version.

Customizing the Configuration user interface In the "Build a product configuration model" topic, you examined how to add subcomponents to the product configuration model, and you also added attributes for each component to help describe the features associated with the components. There are several options that are available to use to further customize how and when subcomponents and attributes display on the Configure line page. The options include the following: •

Attribute groups - An attribute group is used to group the attributes for a root component or subcomponent in a product configuration model. You can group similar attributes to display together to help the user better understand the product features.

•

Arranging attribute groups and subcomponents - You can arrange attribute groups and subcomponents to display in a specific order on the Configure line form. Ordering the attribute groups can help organize the attributes in a logical sequence that display when testing the user interface or configuring an order line.

•

Hiding attributes - Attributes can be hidden and not display in an attribute group on the Configure line form when testing or configuring an order line.

Exercise - Build and use a product configuration model Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/4exercise-build-test-product-configuration-model

Create components for product configuration models As a product designer in the company USMF, you need to create components before a product model can be built. Constraint-based product configuration models use components as building blocks to establish the product model structure. •

Go to Product information management > Products > Product configuration models.

•

Click Components.

•

Click New.

•

In the Name field, type 'eBook'.

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Click Save.

Create a product configuration model 1.

Go to Product information management > Products > Product configuration models.

Click New.

In the Name field, type 'eBook II'.

Click Ok.

In the Reuse configurations field, select 'Yes'.

Expand the Attributes tab.

Click Add.

In the Name field, type 'Case color'.

In the Solver name field, type 'CaseColor'.

10. In the Description field, type 'Available colors for eBook'. 11. In the Attribute type field, enter or select Cabinet finish. 12. Select the Set default check box. 13. Select the Include in reuse check box. 14. In the Default value field, enter or select Oak. 15. Select the Include in reuse check box. 16. Click Add. 17. In the Name field, type 'Front grill'. 18. In the Solver name field, type 'FrontGrill'. 19. In the Description field, type 'Select the type of front grill for your eBook'. 20. In the Attribute type field, enter or select Front grill. 21. Clear the Set default check box. 22. Select the Include in reuse check box. 23. In the Default value field, enter or select Black. Click Add. 24. In the Name field, type 'Corner protection'. 25. In the Solver name field, type 'CornerProtection'. 26. In the Description field, type 'Should the eBook have corner protection?'. 27. In the Attribute type field, enter or select Corner protection. 28. Select the Include in reuse check box. 29. Collapse the Attributes tab.

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Add sub components 1.

Expand the Subcomponents section.

Click Add.

In the Name field, type Insurance.

In the Solver name field, type Insurance.

In the Description field, type Do you need Insurance?

In the Component field, enter or select Insurance.

Click Save.

Collapse the Subcomponents section.

Add sub BOM lines 1.

Expand the BOM lines section.

Click Add.

In the Name field, type M0055.

In the Description field, M0055.

Click Save.

Click BOM line details.

In the Item number field, enter or select M0055.

Select Yes in the Calculation field.

Click the Setup tab.

10. Set Quantity to '1.0000'. 11. Set Per series to '1'. 12. Click the Dimension tab. 13. In the Warehouse field, type '11'. 14. Click OK. 15. Collapse the BOM lines section.

Add an expression constraint to a product configuration model 1.

Expand the Constraints section.

Click Add.

In the Constraints field select Expression constraint.

Click Create.

In the name field type eBook Oak.

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Click Save.

Click Edit expression.

In the Expression type Implies[FrontGrill != "Metal",!CornerProtection].

Click Validate.

10. Ensure there is no error. 11. Click Close. 12. Click OK. 13. From the MODEL action pane, click Validate. 14. From the MODEL action pane, click Test. 15. In the Case color select Rosewood. 16. In the Front grill select White. 17. Note that the Corner protection is not available and is set to false. 18. In the Front grill select Metal. 19. Note that the Corner protection can be set to either true or false. 20. Click Next. 21. Click OK. 22. Close all pages.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/5knowledge-check

Get started with product configuration in Dynamics 365 for Finance and Operations knowledge check 1.

Which of the following parameters cannot be controlled by Product configuration parameters? a) Product configuration model node structure b) Configuration documentation type c)

Default configuration ID

d) Number sequence for constraint-based product configuration 2.

What is the definition of a product model configuration template? a) A configuration template is a completely or partly configured product configuration model

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b) A configuration template is a completely configured product configuration model c) 3.

A configuration template is a partly configured product configuration model

Which product configuration model element can you not create a translation for? a) Constraint b) Product configuration model c)

Component

d) Subcomponent

Summary Link: https://docs.microsoft.com/en-us/learn/modules/get-started-product-configuration/6summary You can use product configuration in Finance and Operations to create many product variants that meet individual customer requirements. You can achieve this by reusing a small set of components that you can define and use in many combinations. You create a product configuration model to represent a generic product structure. After you have a complete product configuration model, you can create distinct product variants that have their own unique BOMs and routes. Some key areas discussed in this module included the following: •

Product configuration parameters - Errors will occur if the parameters are not defined when you try to test a configuration or configure a line.

•

Components - Must be created or existing components must be used to add subcomponents to a product configuration model.

•

Attribute types - Define the possible values that can be assigned to an attribute. They can be used for any attribute in all product configuration models.

•

Subcomponents - Represent the tree structure of a product configuration model.

•

Attributes - Describe the features of the product.

•

Constraints - Represent conditions that a product configuration must satisfy.

•

User requirements - Resemble subcomponents, except they do not have the item master mapping, and behave like a phantom BOM.

•

BOM lines - Identify a manufacturing BOM for each component and can reference an item or a service.

•

Route operations - Include route operations to identify the manufacturing routes for the subcomponents.

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Course MB-320T02-A: Configure and use lean manufacturing in Dynamics 365 for Finance and Operations Link: https://www.microsoft.com/en-us/learning/course.aspx?cid=MB-320T02 Organizations use Dynamics 365 for Finance and Operations to run smarter with connected operations, by selecting best-fit manufacturing processes, improving operational procedures, simplifying resource management, accelerating product delivery, and increasing quality and customer satisfaction. This course discusses how to configure and use lean manufacturing in Dynamics 365 for Finance and Operations.

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Module 1: Get Started with Lean Manufacturing This topic explains how to get started with the Lean manufacturing in Finance and Operations. Lessons •

Introduction

•

Concepts and terminology

•

Module Summary

In this lesson you learned to: •

Understand Lean manufacturing

•

Understand Lean concepts and terminology

Get started with lean manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-lean-manufacturing/ In striving for perfection, lean manufacturing is a journey of continuous improvement. The goal is to produce exactly what the customer wants, when the customer wants it, and to do it economically. Perfection is an aspiration. You can use lean manufacturing in a unified (mixed-mode) manufacturing environment that combines various supply, production, and sourcing strategies. These strategies include production orders, batch orders for process industries, purchase orders, and transfer orders. The lean manufacturing architecture in Dynamics 365 for Finance and Operations consists of production flows, activities, and Kanban rules. In this module, you will: •

Understand Lean manufacturing

•

Understand Lean concepts and terminology

Introduction to lean manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-lean-manufacturing/1introduction-to-lean-manufacturing Let's first start by understanding the concepts for lean manufacturing in Dynamics 365 for Operations.

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Per Womack and Jones, a Value is defined as a the "capability provided to customer at the right time at an appropriate price, as defined in each case by the customer." Value is the critical starting point for lean thinking, and can only be defined by the end customer. The end customer, or the user of the product, is contrasted with interim customers, such as sales, marketing, distribution, suppliers, and more. Value is also product-specific. The core concepts for lean manufacturing in Finance and Operations provide a base level understanding of lean concepts necessary to work within Finance and Operations. In their fundamental work for lean, (Womack & Jones, 2003) defined the following five Lean principles: •

Customer value

•

Identify the value stream

•

Flow

•

Pull

•

Perfection

Customer value When identifying the value, you specify what creates value from the customer's perspective. Consider the following. The customer defines the value of product in a lean supply chain. Value-adding activities transform the product closer to what the customer actually wants. An activity that does not add value is considered to be waste. The value stream is a sequence of processes all the way from raw material to final customer or from product concept to market launch.

Identify the value stream Value stream mapping is an important tool to help model the lean transformation.

Production flow You want to create flow wherever possible in the process. For example, you can use one-piece flow by linking all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste. With one-piece flow, the waiting time of work in progress between processes is eliminated. And that leads to adding value more quickly. Make only what is needed by the customer.

Pull The pull is the response to the customer's rate of demand. The customer demand drives the supply chain. If we look at the supply chain from downstream to upstream activities, the upstream supplier produces nothing until the downstream customer signals a need.

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Perfection In striving for perfection, lean is a journey of continuous improvement. The goal is to produce exactly what the customer wants, when the customer wants it, and to do it economically. Perfection is an aspiration. Remember, anything and everything can be improved.

Understand Lean concepts and terminology Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-lean-manufacturing/2understand-lean-concepts-terminology

Lean terminology There are ten basic lean terms that are used throughout the Lean manufacturing module: •

Value Stream- The Value Stream is represented by one or multiple production flows. It can also be modeled as an operating unit costing purpose.

•

Kaizen - Japanese for "continuous improvement" Kaizen is a management philosophy emphasizing employee participation, where every process is continuously evaluated and reevaluated to eliminate waste.

•

Work cell - A work cell is a resource group, where resources are grouped to execute a process flow. The work cell represents the effective capability of all resources assigned to the cell. It is handled as a black box, meaning that the internal structure of the cell is not documented in the system.

•

Cycle time - The average cycle times for each activity of a production flow are determined at the validation of a production flow version based on the takt requirement of a production flow version. The actual cycle times are calculated for a defined period and compared to the average through the cycle time performance control.

•

Takt time- The takt requirements are defined on a production flow version. For production flows that feed into other flows, the takt requirements can be calculated based on the target cycle times of the consuming activities.

•

Supermarket- A supermarket is a central storage location where (raw) materials are stored near their point-of-use so customers (or consumers) can pull them as needed. Supermarkets are used to:

•

Minimize transaction costs

•

Facilitate visual management

•

Establish the framework for a point-of-use Kanban system (pull)

Production flow - A production flow is linked to an operating unit that plays the role of the Value Stream. The flow of material and products throughout work cells and locations for a specific

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production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow. •

Backflush costing - Backflush costing omits recording some or all of the journal entries that relate to the stages from the purchase of direct materials to the sale of finished goods. Since some stages are omitted, the journal entries for a subsequent stage use normal or standard costs to work backward to "flush out" the costs in the cycle for which journal entries were not made.

•

Kanban - Japanese for "visible record." Kanbans have been adopted by many industries as a method of controlling production and internal supply. A Kanban can apply to a paper ticket or a physical container. A Kanban is a pull signal that represents demand and triggers process and transfer activities for a unit of a specific item or item family.

•

Cell and line design is a hierarchical process from factory layout to detailed workstation ergonomics that include several processes and activities that come into play in lean manufacturing such as product family or value stream identification, value stream mapping, strategy and subcontract issues, plant layout and location of supermarkets, activity timings and sampling, calculate Takt and sales cycle time, identify any constraints, paper Kaizen, theoretical minimum activity times, theoretical minimum operators, cell reference costs and savings calculation, cardboard simulation, cell layout design, operator balancing, workstation ergonomics, and pull system design.

Identifying value for the customer When identifying the value, you would specify what creates value from the customer's perspective. •

The customer defines the value of product in a Lean supply chain.

•

Value-adding activities transform the product closer to what the customer actually wants.

•

An activity that does not add value is considered to be waste.

Understanding the value stream The value stream is the sequence of processes from raw material to final customer, or from product concept to market launch. If possible, look at the whole supply chain. The value stream is modeled as an operating unit in Finance and Operations, which allows the use of the value stream as a financial dimension. Value stream mapping is an important tool to help model the lean transformation. The value stream consists of activities required to design and make a family of products or services that are undertaken with a group of functions that are linked together to chain processes from the point of customer specification to the raw material source, which is the inventory of the lean manufacturer. The objectives of the value stream are to correctly specify value to the ultimate customer, and to analyze and focus so that it does everything from product development and production to sales and service in a www.dynamicscompanions.com Dynamics Companions

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way that actions that do not create value are removed and actions that do create value proceed in a continuous flow as pulled by the customer. The future state value stream can be modeled in Finance and Operations as a production flow. All processes of the value stream are modeled as process activities. Movements or transfers can be modeled as transfer activities, if the transfer status has to be registered or if an integration to inventory picking or consolidated shipments is required. Therefore, the value stream, along with the production flow, is used to model the structure of the lean manufacturing in Finance and Operations.

Creating a production flow Production flows are the flow of material and products throughout work cells and locations for a specific production or supply scenario. A production flow can also be described as a sequence or small network of process or transfer activities. Create flow wherever possible in the process. You can use a one-piece flow by linking all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste. The waiting time of work in progress between processes is eliminated; hence, adding value more quickly. The result of the mapping process to future state value stream can then be modeled in Finance and Operations as a production flow version. Many production flows can make up the value stream. The production flow can produce products for consumers or other production flows. All processes of the value stream are modeled as process activities. Movements or transfers can be modeled as transfer activities if the transfer status has to be registered or if an integration to inventory picking or consolidated shipments is required. The term feeder flow is where products of a production flow are used in another flow. Production flows are introduced as the backbone of lean manufacturing because they define the process and transfer activities of the value stream, support the kanban rules in defining activities a kanban goes through, provide an activity-based context for the planning and production processes, and establish a cost context for the various kanban production scenarios. To support continuous improvement, the production flows are implemented in time-effective versions. This allows you to copy an existing production flow version including all related kanban rules to a draft version of the production flow and model the future stay production flow before validating and activating it for production. The activity-based model allows the setup of a wide range of scenarios, without adding complexity for the production (shop) floor workers, because all scenarios use the same activity-based user interface.

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Introduction to kanbans The word "kanban" means "visible record" in Japanese. Kanban has been adopted by many industries as a method of controlling production and internal supply. When a kanban has been consumed, it should be passed or triggered to the source of supply to replenish it. This source of supply is defined through the production flow activities that the kanban is linked to, providing a definition of how the Kanban is filled. Kanban rules in Finance and Operations are important to production flows as they define the activities that a kanban rule goes through. The value stream is different from the classical material requirements planning (MRP) approach where individual items are linked to individual and independent resources or resource groups such as work centers and workgroups. The value stream unifies the process for a product family in a top-down approach before defining or possibly eliminating exceptions on the item level.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-lean-manufacturing/3knowledge-check 1.

What constitutes a feeder flow in a production flow? a) The incremental adding of components to a product b) A production step that improves efficiency c)

When products in one production flow are used in another flow

d) Allowing a product to be completed in separate stages 2.

What is the name for the simplest form of a production scenario for lean Manufacturing? a) Basic product flow b) Production flow c)

Basic activity flow

d) Activity flow 3.

Which one of the following terms means "continuous improvement"? a) Value stream b) Kaizen c)

Production flow

d) Kanban 4.

Which one of the following terms means "visible record"?

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a) Value Stream b) Kaizen c)

Production flow

d) Kanban 5.

Which one of the following is an Operating unit in Finance and Operations? a) Value Stream b) Kaizen c)

Production flow

d) Kanban

Summary Link: https://docs.microsoft.com/en-us/learn/modules/get-started-with-lean-manufacturing/4summary Value is the critical starting point for lean thinking, and can only be defined by the end customer. The end customer, or the user of the product, is contrasted with interim customers, such as sales, marketing, distribution, suppliers, and more. Value is also product-specific. In this module you learned about lean manufacturing concepts and terminology.

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Module 2: Configure Lean Manufacturing This topic explains how to configure Lean manufacturing in Finance and Operations. A Lean manufacturing scenario is usually more than an accumulation of unrelated Kanban rules or materialsupply policies. The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow. The activity-based production flows are introduced in Finance and Operations to establish a production and cost context for various Kanban scenarios. All Kanban rules are directly connected to this pre-defined structure. The activity-based model allows users to set up a wider range of scenarios than supported by previous versions of Lean manufacturing for Finance and Operations, without adding complexity for the shop floor workers because all scenarios use the same activity-based user interface. Lessons •

Introduction

•

Configure parameters

•

Create value streams and production flow models

•

Create production flows

•

Practice Labs

•

Module summary

In this module you learned to: •

Configure parameters

•

Configure value streams

•

Create Production Flows

•

Configure lean manufacturing work cells

Configure lean manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/ The lean manufacturing architecture in Dynamics 365 for Finance and Operations consists of production flows, activities, and Kanban rules. You can use lean manufacturing in a unified manufacturing environment that combines various supply, production, and sourcing strategies. In this module, you will: •

Configure parameters

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•

Create value streams

•

Create production flows

•

Configure lean manufacturing work cells

Introduction to configure lean manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/1introduction-to-configure-lean-manufacturing A lean manufacturing scenario is usually more than an accumulation of unrelated Kanban rules or material-supply policies. The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow. The activity-based production flows are introduced in Finance and Operations to establish a production and cost context for various Kanban scenarios. All Kanban rules are directly connected to this pre-defined structure. The activity-based model allows users to set up a wider range of scenarios than supported by previous versions of lean manufacturing for Dynamics 365 for Finance and Operations, without adding complexity for the shop floor workers because all scenarios use the same activity-based user interface.

Work cell A work cell is a type of resource group that can be used in lean manufacturing process activities. Work cells have input and output locations and a capacity definition based on a production flow model.

Semi-finished products In traditional manufacturing within Finance and Operations, production orders allow users to report jobs on an operation level. With each finished operation, the product reaches a different state of semi-finished product. However, this status is not registered in inventory unless the last operation of a production order has been completed and the next BOM-Level is reached. Semi-finished products that do not represent a BOM-Level are usually identified by the product ID of the next BOM Level and the last completed operation. An activity that consumes semi-finished products cannot be the first activity in a production flow. With lean manufacturing for Finance and Operations, this concept can be applied to production with the manufacturing Kanbans through the underlying production flow activities. The following is a list of semi-finished options:

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Update on hand receipt - Select this check box if the activity outputs products that are finished products (BOM level), and the product receipt is registered in inventory. o

When you use this check box, the value of the finished product is moved out of the production flow at standard cost.

When you clear this check box, the value of the received product remains in the WIP of the related production flow. The value is moved out of WIP when the goods are transferred or consumed by the succeeding activity in the production flow.

•

Pick up - Select this check box if the activity consumes semi-finished products. A semi-finished product is any intermediate state of a product that is between two BOM levels.

•

Receive - Select this check box if the activity outputs semi-finished products. You can only select this check box if the Update on hand receipt check box is not selected.

Configure parameters Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/2-configureparameters

Lean manufacturing parameters Go to Production control > Setup > Production control parameters and select the Lean manufacturing tab. In the Production instruction field, you can select the type of document that is used for production instructions that are displayed on the kanban board.

Production flow costing Lean manufacturing disrupts the traditional cost concepts of job costing, because the context of a production order is not available. Lean manufacturing for Finance and Operations uses the production flow as the cost accumulator. Cost of material, and semi-finished and finished products are tracked for each item and cost group. Work in process (WIP) is tracked for every production flow. To set up WIP accounts for subcontracting go to Production control > Setup > Production > Production groups and expand the Ledger-Lean subcontracting and assign ledger accounts.

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The production group defines the set of accounts that are used for the financial postings that are related to the production flow. The most important accounts are the WIP and Offset accounts, which are the basis of variance calculation for the production flow.

Lean schedule group Lean schedule groups are defined to group and distinguish products in kanban scheduling. The grouping can be done as generic association per company or specific to a work cell. Each group has a color code assigned for visual indication in the kanban scheduling list page. Go to Product information management > Lean manufacturing > Lean schedule groups to create a schedule group, set a color and add lean schedule items to show kanbans for assigned items with different colors for better visibility.

Create value streams and production flow models Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/3-createvalue-streams-production-flow-models This unit explains how to create value streams and production flow models in Finance and Operations.

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The value stream The value stream is defined as the sequence of processes from raw material to final customer or from product concept to market launch. The value stream should encompass the entire supply chain. In Finance and Operations, the value stream is represented by one or multiple production flows. It is also represented as an operating unit in the organization hierarchy of the enterprise. The value stream should be analyzed to eliminate any non-value adding activities. Go to Production control > Setup > Lean production flow > Value streams to create and manage value streams. Value stream mapping is the process of identifying and charting the flows of information, processes, and physical items across the entire supply chain, from the raw material supplier to the possession of the customer. When you are considering an implementation of lean manufacturing in Finance and Operations, the ground work must be laid through defining the value streams, mapping them, and eventually setting them up. The value stream is configured as an operating unit. This allows you to use it as a financial dimension. Multiple production flows can exist for a company that uses this operating unit for each company.

Production flows A lean manufacturing scenario is usually more than an accumulation of unrelated Kanban rules or material-supply policies. The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow. The result of the mapping process, the future state value stream, can then be modeled in Finance and Operations as a production flow version. All processes of the value stream are modeled as process activities. Movements or transfers can be modeled as transfer activities, if the transfer status has to be registered or if an integration to inventory picking or consolidated shipments is required. Many production flows can make up the value stream. The production flow can produce products for consumers or other production flows. In the case where the products of a production flow are used in another flow, this is called a "Feeder Flow." Production flows are introduced as the backbone of lean manufacturing, as they perform the following tasks: •

Define the process and transfer activities of the value stream.

•

Support the Kanban rules in defining the activities a Kanban goes through.

•

Provide an activity-based context for the planning and production processes.

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Establish a cost context for the various Kanban production scenarios.

To support continuous improvement, the production flows are implemented in time-effective versions. This allows you to copy an existing production flow version, including all related Kanban rules to a draft version of the production flow, and model the future-state production flow before validating and activating it for production.

Production flow model The production flow model predefines the calendar and capacity usage for a group of work cells and for the detailed settings in the production flow processes. It also predefines the structure and behavior of the Kanban schedule for the cells. A unique production flow model should be defined for a category of work cells that have similar behavior. You can create a production flow model in Production control > Setup > Lean production flow > Production flow models. Consider the following when creating a new Production flow model: •

The Model type field can be either Throughput or Hours.

•

The EPE Cycle in days field defines the EPE (every product every) cycle that is used in automatic planning. The value in this field is used to calculate the period when a kanban job is scheduled: Start date = Due date - EPE cycle. After you create a production flow model, you can change the value of this field. The change does not affect jobs that are created.

•

The Planning period type field can be set to: o

Day (the kanban schedule consists of periods of calendar days; the Kanban schedule board displays days per column)

Week (the kanban schedule consists of periods of weeks; the Kanban schedule board displays weeks per column).

•

The Planning time fence field determines the planning periods. Planning periods can be either days or weeks. The Kanban schedule board displays the kanban jobs that are scheduled during the planning time fence that is defined.

•

The Capacity shortage reaction can be set to any of the following values: o o o o

Postpone Cancel Add to request period Distribute

Model type The most important property of the production flow model is the model type, which selects the method to measure capacity for the work cell.

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The production flow model defines the capacity settings for the work cell. The options are: •

Throughput - The capacity and load of a work cell are measured in quantities of product that are produced.

•

Hours - The capacity and load of a work cell are measured in periods of hours and minutes. After you create a production flow model, you cannot change the value of this field.

EPE cycle in days **Every Product Every (EPE) **defines the number of days within the EPE cycle that is used in automatic planning. The value in this field is used to calculate the period when a Kanban job is scheduled: •

Start date = Due date - EPE cycle.

After you create a production flow model, you can change the value of this field. The change does not affect jobs that were previously created.

Capacity shortage reaction The Capacity shortage reaction defines the method of Kanban scheduling to use if there is no capacity available during the required period. This parameter is only used when the Kanban auto planning is used for Process jobs. The options are: •

Postpone - The job is postponed until the day that throughput becomes available.

•

Cancel - Automatic planning of the Kanban job is cancelled.

•

Add to request period - The job is added to the scheduled period of the required date. The result is that the work cell is overloaded during the scheduled period.

•

Distribute - The Kanbans of a single event are distributed to the available production periods, starting with the first available period.

Planning period type The planning period is used for planning Kanbans automatically and using the Kanban schedule board. The options are: •

Day - The Kanban schedule consists of periods of calendar days. The Kanban schedule board displays days for each column for scheduling.

•

Week - The Kanban schedule consists of periods of weeks. The Kanban schedule board displays weeks for each column for scheduling.

Planning time fence The Planning time fence defines the number of planning periods that are defined in the Planning period type to use in the planning time fence.

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Planning periods can be either days or weeks. The Kanban schedule board displays the Kanban jobs that are scheduled during the defined planning time fence. Kanbans can only be scheduled within this planning time fence.

Simple production flow The simplest form of a production scenario for lean manufacturing is a production flow where all operations are grouped to a single process activity in a single work cell.

Scenario: You have set up a production flow to model the process of painting covers. The speaker cover paint shop is picking unpainted covers from the warehouse. The painted covers are supplied to a supermarket where they can be picked for other manufacturing processes or for sales. The production flow is set up for the general activity "painting," no matter what item variant, color, or specific painting process is applied, providing it is happening in the same group of resources at the same physical location. The activity times and cycle times for a production flow activity are initially set for an average process. A fixed quantity Kanban rule is then created for the process activity for "painting," which manages the Kanban signal for the painted speaker covers that replenish the painted speaker cover supermarket.

High level production flow The high-level production flow shows the interconnection between activities and Kanbans. Here to understand the high-level production flow, we have a complex business requirement that consists of different scenarios in a sequential order as follow:

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Scenario 1: Replenish the warehouse that processes the jobs You have set up a production flow and Kanban rules for company USMF to model the process of assembling and packaging car speakers to be sold to the customer. Beginning with the customer pull, the various elements of the production flow are broken down into a Packaging activity and Transfer to warehouse activity. Therefore, USMF replenishes the warehouse where material is packaged and transferred to the customer. A process activity controls the packaging and a transfer activity controls the transfer to warehouse. A sales event Kanban is used to trigger the Kanban based on sales order demand and pulls the finished good through the Packaging process to the warehouse that runs the jobs. Scenario 2: Replenish the sales warehouse A process activity controls the packaging, and a transfer activity controls the transfer to the Sales warehouse. A scheduled Kanban is used to trigger the Kanban based on demand and pulls the finished good through the Packaging process to the Sales warehouse. Scenario 3: Packaging materials replenishment The Packaging process requires packaging materials stored in another warehouse to be used in the process. A transfer activity moves the packaging parts from a Packaging material warehouse to the Packaging work cell. A fixed quantity withdrawal Kanban is used to control this movement. Scenario 4: Assembly and packaging activities A process activity controls the car speaker assembly process that is performed before the packaging process. A sales line event Kanban is used to trigger the Kanban based on the upper level sales demand to perform the assembly. Scenario 5: Mechanical parts replenishment The Car Speaker Assembly process requires mechanical parts that are stored in another warehouse to be used in the process. A transfer activity moves the packaging parts from a Mechanical parts warehouse to the Car speaker assembly work cell. A fixed quantity withdrawal Kanban is used to control this movement. Scenario 6: Electrical and speaker assembly The Electrical Assembly process supplies a supermarket in WIP for the Car Speaker Assembly process. The parts are not posted in inventory. A fixed quantity manufacturing Kanban replenishes the supermarket for these mechanical pre-assembly parts. The Car Speaker Assembly process posts this material to WIP.=

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Create production flows Production flow versions To better support continuous improvement, the production flows are implemented in time-effective versions. This allows users to copy an existing production flow version including all related Kanban rules to a future version of the production flow, and model the future-state production flow before validating and activating it for production. Existing Kanbans from old production flow versions are automatically related to the new version to ensure a seamless material flow on the transition date and beyond. To map a lean manufacturing scenario to Finance and Operations, the definition of a production flow is mandatory. The production flow defines the organizational context of a manufacturing scenario and relates to accounting and costing, since this operating unit can be configured to be used as a financial dimension. The following fields are used to set up and view the takt and cycle times for the production flow version: •

Per cycle unit of measure - Enter the unit of measure that is used to define the product quantity for each cycle. If the Default quantity unit field is set in the production parameters, the value is displayed here by default, but you can change it. If the production flow version is activated, you cannot change the value of this field. All items produced in the production flow that have a different inventory unit of measure must have a conversion factor to convert to this unit of measure when jobs are

•

Quantity per cycle - Enter the product quantity that is produced for every one takt cycle of the production flow version. The default values 1, but you can change it.

•

Takt unit - Select the unit of measure to use with takt times and cycle times of the production flow. If the Default time unit is set in the production parameters, the value is displayed here by default, but you can change it.

•

Average takt time - Enter an average takt time for the production flow version. You can use this field to monitor and analyze the performance of the work cell. You can compare the average takt time that you set against the actual takt time that is calculated.

•

Minimum takt time - Enter the minimum acceptable takt time for the production flow version. If the actual takt time is less than the minimum takt time, the production flow is running too quickly. A warning message is displayed in the Cycle time performance indicator in the Kanban board, and the indicator color moves to the red area. The default value is 1, but you can change it.

•

Maximum takt time - Enter the maximum acceptable takt time for the production flow version. If the actual takt time is more than the maximum takt time, the production flow is running too slowly. A warning message is displayed in the Cycle time performance indicator in the Kanban board, and the indicator color moves to the red area. The default value is the Average takt time x 2, but you can change it.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

Required takt time - For feeder production flows, the required takt time is the takt time that is needed to supply the related downstream activities of the production flow version. The value is calculated from the cycle times of the downstream activities. This formula is used: o

•

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Required takt time = 1 / Σ (ratio (activity relation)/cycle time (downstream production flow activity)).

Actual takt time - The takt time that is calculated based on the actual jobs that are completed during a defined period. If the production flow version is active, this field is calculated by using this formula: o

Actual takt time = working hours of cycle time period / quantity produced in cycle time period.

The output quantity of the production flow version is determined from the last activity of the production flow. If a production flow version has multiple delivery branches, the quantities from the last activities of all branches are summed. For Example, the working shift is eight hours, from 8:00 to 16:00. The cycle time period is two days. The working hours of the cycle time period are 16 hours, which is equal to 960 minutes. Assuming that 600 pieces were produced during the last 16 hours of working time (on Wednesday at 24:00 all jobs that were completed between Monday 24:00 and Wednesday 24:00 are included), the actual takt time is: 960 / 600 = 1.6 minutes. •

Period for actual cycle time (days) - Enter a number of days for which the actual takt time is calculated. The actual takt time is calculated based on the jobs that are completed during this period. You can change this value on production flow versions regardless of the activation status.

Activity cycle times The activity cycle times (average, minimum, and maximum) for each activity are calculated based on the takt settings of the production flow version. A cycle time ratio is used among activities within the cycle time calculation of the production flow as well. The initial calculation is done on validation /activation of the version, but can be recalculated with the Recalculate button at any point in time. However, the cycle time for a Kanban job is calculated on job creation. The recalculation of the activity cycle times will not affect existing jobs.

Takt and cycle times The production flow version details specify the takt requirements of the production flow. These are used at the activation to calculate the actual cycle time requirements of each activity in the production flow. For a single activity production flow, the takt requirements of the production flow version are equal to the cycle time of the activity.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

At the validation and activation of a production flow version, the calculated activity cycle times are verified against the capacity of the assigned work cells. If the capacity needed to support the average cycle time is higher than the available capacity of the work cell, a warning message is displayed.

Cycle time ratio When adding a successor or predecessor you need to enter a value to describe the ratio between the cycle times of the related activities. The cycle time ratio defines how many cycles of a predecessor activity are required to supply the material or semi-finished products that are needed for one cycle of the successor activity. The ratio is used to calculate the average cycle times for all activities of the production flow. The ratio is also used to calculate the Required takt time time of a feeder activity that is related to a downstream (successor) activity of a different production flow. You can include a scrap factor in the ratio. For example, A cycle time ratio with the value 1 means that the activity cycle time is equal to the Average takt time time of the production flow version. This is the default value. A cycle time ratio with the value 2 means that the activity has to feed two activities per cycle time. Item A is produced in work cell A. Item A consumes two units of item B which is produced in the upstream work cell B. The cycle time ratio is 2.

Activities setup The production flow is composed of a series of process and transfer activities.

Single process activity production flow The simplest form of a production scenario for lean manufacturing is a production flow where all operations are grouped to a single process activity in a single work cell. The demo data for Finance and Operations contains an example of this type of production flow.

Creating a process activity Once a production flow version is created, activities can be defined for the production flow. The activities are automatically associated to the version that they are created for. The creation of a production flow activity is done with the activity wizard. The different wizard pages are displayed based on the selected settings. All activity time types are added up to calculate the throughput time of the activity. Based on the due date of a Kanban job, the throughput time is used to determine the issue time for the material. The queue times are not taken into account on cost calculation, only in scheduling.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

For a single activity production flow, no more interactions need to be done. With the creation of the activity, it is now possible to create Kanban rules that use this single process activity. However, to create Kanbans, the production flow version needs to be activated.

Activity relations If a production flow version has more than one activity, the sequence and structure of the activities in the production flow version must be defined before the production flow version can be activated. This definition is done by adding activity relations.

Predecessors and successors The activities, process and transfer, are connected within the same production flow using predecessors and successors to define the activity relations between the two. Production flows will generally have predecessors and successors defined, unless the flow has only a single activity. Predecessors are the upstream activity or activities that are defined for the selected activity. The activity relations that are configured for these activities can carry sequence constraints. Successors are the downstream activity or activities that are defined for the selected activity. The activity relations that are configured for these activities can also carry sequence constraints. When defining predecessors and successors, you only need to define either the predecessor or the successor. Once a predecessor is defined for an activity, the downstream successor activity is automatically defined for that step. If a successor is defined first, then the upstream predecessor is automatically defined.

Validations Before Kanbans can be created for activities of a production flow version, the version needs to be activated. The activation initiates the validation and activates the production flow version if no errors are found. The validation checks the consistency of the activities and Kanban rules of a production flow version. This can be done at any state before or after activation. For a single activity production flow, the validation is of low importance because there is only one process activity and no connecting activities to validate. With any production flow, the validation check will ensure that the first and last activities of the production flow are selected to have update on hand activated on pick or receipt. This occurs as material consumption and product supply of a production flow must be posted to inventory, as is the case with a production order. This is why a single activity production flow must have update on hand activated on both. You can only add or remove activity relations on production flow versions that are not previously activated.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exercises - Configure lean manufacturing Links: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/5exercises-configure-lean-manufacturing

Before you begin: To get the most benefit from these exercises, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS).

Exercise - Create a value stream After defining and mapping the lean manufacturing value stream for company USMF, you must create the value stream in Finance and Operations. Follow these steps: 1.

Go to Production control > Setup > Lean production flow > Value streams.

Click New to create a new value stream.

Enter the following details for the new value stream:

•

Name: 'SeaLeanVS'

•

Search name: 'SeaLean'

•

Manager: 'Jodi Christiansen'

Click Save.

Exercise - Create a production flow You, as the production (shop) floor supervisor, have a logical grouping of work cell capacity with similar behavior in capacity load for the work cells used to model the Car Speaker production flow. You must create a new production flow (SeaPFModel) to model the process of painting the covers for the car speakers. The capacity and load of the production flow will be measured in quantities of product that are produced (Throughput). The cycle for this production flow will define as 1 day - the number of days used in automatic planning (EPE cycle is 1 day). The Add method of Kanban scheduling will be used if there is no capacity available during the required periods; the planning period type is Day and the planning time fence is 10. 5.

Go to Production control > Setup > Lean production flow > Production flow models.

Click New.

In the Production flow model field enter SeaPFModel

In the Model type field enter Throughput

In the EPE Cycle in the Days field enter 1

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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10. In the Capacity shortage reaction field enter Add 11. In the Planning period type field enter Day 12. In the Planning time fence field enter 10 13. In the Capacity shortage reaction drop down select Postpone. 14. Click Save. You must also create a production flow version for the USMF eBook production flow and set up the Takt and Cycle times as part of the configuration. Details for the production flow: •

Name: eBookProdFlow

•

Description: eBook Production Flow

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Legal entity: USMF

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Value stream: SeaLeanVS

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Production group: 10

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Per cycle unit of measure: pcs

•

Quantity per cycle: 1

•

Average takt time: 1

•

Minimum takt time: 1

•

Maximum takt time: 2

•

Period for actual cycle time (days): 1

Go to Production control > Setup > Lean production flow > Production flows.

Click New on the action pane. A new production flow record is created.

In the Name field, enter eBookProdFlow.

In the Description field, enter eBook Production Flow.

In the Legal entity field, select USMF.

In the Value stream field, select LeanProduction.

In the Production group field, select 10.

Click Save.

On the Versions FastTab, click Add.

10. Click OK. Configure the Takt requirements for the new production flow version. 1.

Expand Versions and Version details FastTabs.

In the Per cycle unit of measure field, select pcs.

In the Quantity per cycle field, enter 1.

In the Average takt time field, enter 1. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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In the Minimum takt time field, enter 1.

In the Maximum takt time field, enter 2.

In the Period for actual cycle time (days) field, enter 1.

Click Save in the action pane.

Note the Plan status field is set to Draft.

10. Close all forms.

Exercise - Create a process activity A new eBook Stylus is being developed to compliment the eBook kits that are sold at USMF. The Stylus is purchased from an outside vendor and configured at USMF. A process activity is needed to configure the Stylus and place it in stock for use elsewhere. Details for the process activity: Name: Transfer Activity Process quantity: 10 pcs Operating unit: LeanProduction Work cell: 1260 1.

Go to Production Control > Setup > Lean Production Flows > Production flows.

Open the Mid Range Speaker 2PF production flow.

On the Versions FastTab, click the Activities button.

Click the Create new plan activity button.

Click Next..

Enter Transfer Activity in the Name field.

Enter 10 in the Process quantity field.

In the Unit drop-down list, select pcs.

In the Operating unit drop-down list, select LeanProduction.

10. Click Next. 11. In the Work cell drop-down list, select 1260. 12. Set the Update on hand on receipt option to Yes. 13. Click Next. 14. Select 1260 in the Replenishing field. 15. Select Finished product in the Product type field. 16. Click Next. 17. Select Warehouse 13 in the Transfer from location warehouse field.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

18. Select location 13 in the Transfer from location -location field. 19. For the transfer to location: 20. Select 22 in the Warehouse field. 21. Select location 01-01-2-1 in the Location field. 22. Select Shipper in the Freighted by field. 23. Click Next. 24. Select Queue time after record. 25. Enter 4 in Time field. 26. Select hr in the Time unit field. 27. Enter 10 in Per quantity field. 28. Select the Runtime record. 29. Enter 2 in Time field. 30. Select hr in Time unit field. 31. Enter 10 in Per quantity field. 32. Click Next. 33. Click Finished.

Exercise - Configure process and transfer A new car speaker remote is being developed to compliment the car speaker kits sold at Contoso. The CarSpeakProdFlow production flow needs to be amended to include a transfer activity to move the configured remote to the Electrical Component warehouse. Details for production flow transfer activity: •

Name: RemoteTransfer

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Process quantity: 10

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Operating unit: PFModel_1

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Replenishing resource group: 1250

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Update on hand on receipt: Yes

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Update on hand on pick: No

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Transfer to warehouse ElComp, location Output

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Freighted by shipper

•

Runtime: 1 min per 25 pcs

Deactivate the current production flow version 1.

Go to Production Control > Setup > Lean manufacturing > Production flows..

Open the CarSpeakProdFlow production flow. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

On the Versions FastTab, select Version 1.

Click Deactivate.

**Create a new transfer activity ** 1.

On the Versions FastTab, click Activities. The Production flow activities form opens.

Click Create new plan activity in the action pane.

Click Next.

Enter RemoteTransfer in the Name field.

In the Activity type drop-down list, select Transfer.

Enter 10 in the Process quantity field.

In the Unit drop-down list, select pcs.

In the Operating unit drop-down list, select PFModel_1.

Click Next. The Create transfer activity page opens.

10. In the Replenishing drop-down list, select 1250. 11. Set the Update on hand on receipt check box to Yes. 12. Set the Update on hand on pick check box to No. 13. In the Product type field, select Finished product. 14. Click Next. The Assign transfer locations page opens. 15. In the Transfer to location group, in the Warehouse drop-down list, select ElComp. 16. In the Location drop-down list, select Output. 17. In the Freighted by drop-down list, select Shipper. 18. Click Next. The Assign activity time page opens. 19. In the Time field for the Runtime row, enter 1. 20. In the adjacent Time unit drop-down list, select min. 21. In the Per quantity field, enter 25. 22. Click Next. The Confirm selection page opens. 23. Click Finish. The wizard closes, and a new production flow activity appears in the list. 24. Click Save in the action pane. Create the predecessor/successor relationship between the process and transfer activity with no constraints 1.

Highlight the RemoteConfig Process activity and, on the Successor tab, click the Add successor button.

Select the Successor Activity of RemoteTransfer.

Select the OK button.

Activate the production flow version. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Close the Production flow activities form.

On the Versions tab, click the Activation > Activate menu button.

Click OK

Exercise - Create activity relations Pierre needs to revise the Mid-Range Speaker 2 PF production flow to have the Transfer_W12_to_W11 activity succeeded by the Process_Activity_1 activity. Details for production flow transfer activity relations: •

Constraint: 1 hour

•

** Cycle time ratio**: 2

Add a successor to the production flow activity 1.

Go to Production control > Setup > Lean production flow > Production flows.

Click the Name of the Mid-Range Speaker 2 PF production flow.

On the Versions FastTab, click Activities.

In the list on the left, select the 00074 -- Transfer from Warehouse 13 to 51 activity.

On the Successors FastTab, click Add successor. The Create activity relation dialog opens.

In the Successor group, in the Activity drop-down list, select Activity 000082.

Select the Constraint check box.

In the Constraint value field, enter 1.

In the Units drop-down list, select hr.

10. In the Cycle time ratio field, enter 2. 11. Click OK. 12. Click Save in the action pane. 13. Close the pages.

Exercise - Perform validation and activation Pierre needs to validate the Mid-Range Speaker 2 PF production flow, Version 2, to confirm that the changes have been correctly implemented. 1.

Go to Production control > Setup > Lean production flow > Production flows. The Production flows form opens.

Click the Name of the Mid-Range Speaker 2 PF production flow. The Production Flows form for the selected production flow opens.

On the Versions FastTab, select Version 1.

Click Validate. The Validate production flow dialog opens. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Click OK.

Click Save in the action pane.

Close the pages.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/6knowledge-check

Configure Lean manufacturing in Dynamics 365 for Finance and Operations knowledge check 1.

In a value stream, what becomes of actions that fail to create value? a) These actions are combined with actions that create value. b) These actions are removed. c)

These actions are highlighted for improvement.

d) These actions are ignored. 2.

What is a planning time fence? a) Provides a safeguard against production promises that cannot be met. b) Defines the number of planning periods defined and used in the planning period type. c)

Divides the production flow model into levels of capability.

d) Describes the maximum limits of production flows in a specific time period. 3.

Which one of the following properties is used to monitor and analyze the performance of the work cell? a) Minimum takt time b) Average takt time c)

Maximum Takt time

Summary Link: https://docs.microsoft.com/en-us/learn/modules/configure-lean-manufacturing/7-summary In this module you learned that Unified (mixed-mode) manufacturing and lean manufacturing can be introduced in different ways.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

While some companies start with the Lean philosophy and try to apply the lean principles, value stream by value stream, others take a more local approach and start from specific work cells where resources and demand structure allow or even require a sean approach. Finance and Operations supports Unified (mixed-mode) manufacturing environments where both lean manufacturing and traditional manufacturing exist. It uses master planning to reconcile and manage approaches where a mixture of traditional production orders and Kanbans are used. Where lean transformations are currently in progress, the concept of the pull point is supported throughout the Kanban architecture. Within the pull point, the buffer is the limit of "pusj" and its size and method of fulfillment are under the control of traditional techniques, such as forecasting and master planning. Beyond the buffer, inventory will be pulled through Lean processes. Finance and Operations has provided various Kanban scenarios to help link traditional push and lean pull systems.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Module 3: Create and Process Fixed Kanban Rules In Dynamics 365 for Finance and Operations, a Kanban is implemented as a framework to plan, track, and process based on Pull signals. A Kanban is an essential part of a pull system of supply, which is a critical element of Lean production/supply. When a Kanban has been consumed, it should be passed (triggered) to the source of supply to replenish it. This source of supply is defined through the production flow activities to which the Kanban is linked. Kanban rules in Finance and Operations are tied to production flows as the foundation that defines the activities of a Kanban. Kanban rules can be set up to support a variety of make-to-stock and make-to-order scenarios. Lessons •

Introduction

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Kanban boards

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Configure a fixed Kanban rule

•

Process fixed Kanbans

•

Practice Labs

•

Module summary

You understood an overview of Kanbans and Kanban types, and learn how to configure and process Fixed Kanban rules. You learned how to configure and work with: •

Kanban rules

•

Manufacturing Kanbans

•

Withdrawal Kanbans

•

Fixed quantity Kanbans

Create and process fixed Kanbans in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/ The Kanban schedule board lets the production planner control and optimize the production plan for kanban jobs. It makes the flow of kanban jobs transparent, and gives the production planner a tool that optimizes and adjusts the production plan for the lean manufacturing work cell. Kanban rules in Finance and Operations are tied to production flows as the foundation that defines the activities of a Kanban.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Kanban rules can be set up to support a variety of make-to-stock and make-to-order scenarios. Here you understand how to work with Kanban boards and learn about Kanban types, Kanban Replenishment Strategies, Fixed Quantity Kanban rules. In this module, you will: •

Kanban rules

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Manufacturing Kanbans

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Withdrawal Kanbans

•

Fixed quantity Kanbans

•

Kanban quantity calculations and circulating kanbans

Introduction to create and process fixed Kanbans Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/1introduction-create-process-fixed-kanbans

Overview of Kanbans In Dynamics 365 for Finance and Operations, a Kanban is implemented as a framework to plan, track, and process based on Pull signals.

Kanban Replenishment Strategies The various Kanban replenishment strategies are fixed quantity Kanbans, scheduled Kanbans and event Kanbans. These strategies are used to handle common manufacturing and replenishment scenarios. In next lesson, we help demonstrating the purpose of the various Kanban replenishment strategies for triggering Kanban pull signals and the benefit that those mechanisms can offer to Lean organizations. The Replenishment strategies are as follow: •

Fixed: This is usually used in Make to stock

•

Scheduled: This is usually used in Make to stock

•

Event: This is usually used in Make to order

A Kanban is an essential part of a pull system of supply, which is a critical element of Lean production/supply. When a Kanban has been consumed, it should be passed (triggered) to the source of supply to replenish it. This source of supply is defined through the production flow activities to which the Kanban is linked. Kanban rules in Finance and Operations are tied to production flows as the foundation that defines the activities of a Kanban. Kanban rules can be set up to support a variety of make-to-stock and make-toorder scenarios.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Kanban Types The two Kanban types are: Manufacturing and Withdrawal. These Kanban types 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. Manufacturing Kanbans relate to at least one process activity. The first activity of a manufacturing Kanban must be a process activity. A process activity can be followed by a transfer or another process activity, allowing a Kanban to span multiple activities. Subcontracting activities are also modeled as activities and use manufacturing Kanbans for the processing that occurs at the vendor. New or unplanned process jobs appear on the Kanban schedule board to be scheduled, if they are not configured to be automatically planned. If they are automatically planned, these are added directly to the Kanban schedule and can be processed directly with the Kanban board for process jobs.

Planning Period and Time Fence Kanban process jobs are planned based on the configuration of the production flow model associated with the work cell. The Planning period and Planning time fence set on the production flow model define the periods for the Kanban schedule board. Planning periods can be either days or weeks. The Kanban schedule board displays the Kanban jobs that are scheduled during the defined planning time fence. Kanbans can only be scheduled within this planning time fence.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Capacity Storage Reaction The Capacity shortage reaction defines the method of Kanban scheduling to use if there is no capacity available during the required period when Kanbans are automatically planned. The options are: •

Postpone: The job is postponed until the day that throughput becomes available.

•

Cancel: Automatic planning of the Kanban job is cancelled.

•

Add to the requested period: The job is added to the scheduled period of the required date. The result is that the work cell is overloaded during the scheduled period.

•

Distribute: The Kanbans of a single event are distributed to the available production periods, starting with the first available period.

Schedule Board for Process Jobs After being planned, the shop floor then uses the Kanban board for process jobs for performing against the various Kanban jobs.

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.

Schedule Board for Transfer Jobs Withdrawal Kanbans are implemented on the shop floor using the Kanban board for transfer jobs. The Kanban board for transfer jobs form enables a waterspider the visibility to gather materials to replenish line side supermarkets and to support the picking of materials from supermarkets. Physical traceability requirements are also supported. This is an example of the Kanban board for transfer jobs.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Fixed Quantity Kanban A fixed quantity Kanban rule relates to a fixed number of handling units; meaning, the numbers of active Kanbans are constant. Whenever the products of a Kanban are consumed and handling units are manually emptied, a new Kanban of the same type is created. The Fixed quantity which is the number of kanbans in the flow should be calculated based on historical and future demand and service factor. If the quantity is too low, you risk running out of stock to meet demand and if it is m, then there a high risk for building up stock. Finance and Operations offers you a process a job called Production control > Periodic tasks > Kanban quantity calculation > Calculate kanban quantity that can help the user calculating the fixed kanban quantity.

The Calculation kanban quantity is based on Kanban quantity calculation policy:

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You can assign the Kanaban quantity calculation policies per Kanban rule:

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Fixed quantity Kanbans are often used with fixed circulating cards, but can also be used with single use cards. A fixed quantity Kanban is a make-to-stock scenario.

Understand Kanban boards Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/2understand-kanban-boards

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Process Actions The process actions of prepare, start, and complete can only be performed when a process job is planned. Process jobs that are not explicitly planned must have the automatic planning quantity in the Kanban rule set to 1. All not planned process jobs that are related to this rule are automatically planned when created and can now be prepared, started, or completed.

Automatic Planning of Kanbans The capacity parameters for automatic planning of the Kanban schedule are defined in the Kanban rule and Lean production flow model that are linked to the work cell capacity. Kanban process jobs are automatically planned when the number of unplanned jobs that are related to the Kanban rule reaches the automatic planning quantity. Any value of 1 or greater placed in this field will cause the Kanbans to automatically plan. If the automatic planning quantity is greater than 1, the Kanbans triggered together are planned in a sequence.

Planning Period Fence When the planning period fence in the production flow model is 1, the Kanbans jobs are added to the end of the planning period of the work cell schedule. If one period is completely loaded, the next period is opened automatically. The Kanbans can be set as priority by designating them as such on the Kanban schedule board. When more than one period is defined in the production flow model, the latest possible start period is determined for each Kanban job by this formula: Start date = due date - EPECycle The EPECycle is configured in the production flow model.

Capacity Shortage Reaction If the calculated start date is in the past, the start date is set to today. The automatic planning tries to load the Kanban jobs on the period that is related to this date. If this is not possible, the automatic planning proceeds according to the capacity shortage reaction setting in the Lean production flow model. The possible settings are: •

Postpone: the job is postponed until the day that throughput becomes available.

•

Cancel: automatic planning of the Kanban job is cancelled and a message displays, indicating that the job could not be planned.

•

Add to the requested period: the job is added to the scheduled period of the required date. The result is that the work cell is overloaded during the scheduled period.

•

Distribute: the Kanbans of a single event are distributed to the available production periods, starting with the first available period. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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An example of this would be if the automatic planning quantity is 3, the automatic planning looks for a period that has enough capacity for the three triggered Kanbans.

Distribute Method If the capacity requested by the triggered Kanbans is higher than the daily capacity of the cell, the "distribute" method is applied automatically (because a free slot could never be found). Starting from the period that is related to the start date, the periods are checked going backward in time until the actual period (today). If no slot can be found before the due date, the search continues after the due date and continues in the future unless a period with enough capacity can be found. The planning period fence defines the number of available periods for planning, starting from the period that is related to the actual day. If no available capacity can be found to slot in all available periods, the automatic planning is cancelled and an error message is displayed.

Loading Kanban Jobs on the Kanban Schedule The Kanban schedule for each work cell consists of periods that correspond to the settings in the lean production flow model. The periods can be daily or weekly. The availability of each period in hours is defined by the working time of the period that is assigned to the calendar. If the capacity model is "throughput" and the period type is "standard work day", the capacity is calculated as: capacity = throughput (standard day) * working time (period) Ăˇ length of standard day (calendar) The load of each Kanban is calculated depending on the throughput ratio of the item that is related to the work cell in the lean schedule group setup. The calculation depends on the capacity model. For throughput, the load is calculated as: capacity load = throughput ratio * Kanban quantity * unit correction factor For hours, the load is calculated as: capacity load = cycle time (activity) * throughput ratio * quantity correction (job quantity) * unit correction factor The load of each planned Kanban is added for each period to determine the period's load. The capacity load of a Kanban process job is calculated whenever a Kanban process job is planned for the first time. Unit correction factors are used for the case where the unit of measure of a job is different than the unit of measure of the capacity of the work cell. The quantity correction is used if the job quantity differs from the activity quantity or the cycle time quantity.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Lean Schedule Groups Product information management > Lean manufacturing > Lean schedule groups form allows users to assign colors and throughput ratios for Kanban scheduling to items or item groups. This can be done globally or specifically for a work cell. The colors can be used to visually understand the different characteristics of items that are produced in the cell for scheduling purposes.

Lean Schedule Items Specific items or groups of items can be assigned to a Lean schedule group with a specific throughput ratio using the Lean schedule items form.

Kanban Schedule Board The Production control > Kanban > Kanban schedule board displays the Kanban jobs that are scheduled during the planning time fence that is defined on the work cell. Kanbans can only be scheduled within this planning time fence.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Kanban job scheduling In the Production control > Kanban > Kanban job scheduling form, PLAN tab, different job status can be reset to other statuses using the Revert Job Status button. The reset function reverses the previously processed actions to reach the correspondent status. If more than one status has to be reset, all reverse actions are performed step by step.

Kanban Job Status for Process Jobs The Kanban job status is important for understanding the planning process for Kanbans. A Kanban job of the process type can have these statuses: •

Not planned

•

Planned

•

Prepared

•

In progress

•

Completed

In the Revert job status you can use the following options as illustrated in the image below:

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

On Production control > Kanban > Kanban board for process jobs the buttons for processing certain activities for that Kanban job (example Prepare/Start) are activated depending on the Kanban job status.

Changing Kanban Job Statuses: Preconditions The various preconditions and results of resetting Kanban jobs are:

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Reversal Statuses

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Pre-Conditions

Result

Completed to in progress

The related financial transactions (if any) are not processed. There must be enough on hand to reverse the physical transactions. The related Kanban is not of the empty status.

Reverse the physical transactions (receipt and issues). If this was the last job in the Kanban, reset the Kanban status to "In progress."

Planned to not planned

If the automatic planning quantity is assigned to 1, this step is not performed on the reset; the job remains at status planned.

Removes the planned starting date and the related sequence.

Prepared to planned

None

Reverse the forward flushing issue transactions, if any. If the circulating cards are used and the assignment method is “manual,” the card assignment is reversed. If it is the first job of the Kanban, also reset the Kanban status to "Not planned".

In progress to prepared

None

Resets the job status to "Prepared."

After a reset to a specific status, the automatic planning is not automatically launched. If automatic planning should be run again for this Kanban, the automatic planning needs to be started manually for the Kanban rule. You also have the following options: •

Plan entire pegging tree: Upon planning a Kanban job with multiple activities, this plans the remaining upstream Kanban jobs.

•

Use alternative kanban rule: Uses an alternative Kanban rule to fulfill selected requirements. This is used where a product can go through alternate activity.

•

Pegging tree supply status: Checks the supply status of all lower level Kanbans in the pegging tree.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Kanban Printing The printing of Kanban cards and pick lists is not required but can be used to signal processes on the production floor. Finance and Operations offers several scenarios of printing pick lists and Kanban cards, including: •

Printing of circulating cards on creation of the circulating cards.

•

Manual printing of Kanban cards.

•

Automatic printing of Kanban cards.

•

Manual printing of pick lists.

•

Automatic printing of pick lists with the Kanban card.

•

Priority designation on Kanban card.

Use the printed Kanban cards to scan and report the progress of a Kanban using the Kanban boards.

The manual printing of Kanban cards can occur from any of these forms: •

Kanban board for process jobs

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

Kanban board for transfer jobs

•

Kanban job scheduling

•

Kanban rules form

•

Kanban details form

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Automatic Printing of Kanban Cards and Pick Lists In some cases, it might be desirable to automatically print the Kanban cards. Kanban cards can be set up to automatically print when a Kanban reaches a specific status. To change these settings, go to: Production control > Setup > Lean manufacturing > Kanban rules. The options are: •

None

•

Creation

•

Plan

•

Prepare

•

Start

•

Receive

When a Kanban reaches the specified status as set up in the Kanban rule, the Kanban card will automatically print. If desired, a pick list could print at the same time.

Configure a fixed Kanban rule Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/3-configurefixed-kanban-rule

Fixed Quantity Kanban Fixed quantity Kanbans are often used with fixed circulating cards, but can also be used with single use cards. A fixed quantity Kanban is a make-to-stock scenario.

Circulating and Single Use Cards Fixed quantity Kanbans are often used with fixed circulating cards, but can also be used with single use cards. A fixed quantity Kanban is a make-to-stock scenario. For a circulating Kanban card, the printed cards are reused and circle physically between the item origin and the point of consumption. After you define the Kanban quantity, the needed cards are printed once.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Fixed circulating cards can move between item origin and point of consumption multiple times a day. This replenishment strategy is mostly applied between cells of one site that have physical proximity, as an example to replenish a cell supermarket out of the main material warehouse. Kanbans created for single usage can be used to cover additional demand to level specific exceptional demand. Only single use Kanbans are always based on fixed quantity rules and no specific rules need to be created for this replenishment strategy. Instead, the Kanbans have a flag that marks them as single use. You can also use event Kanbans for exceptional demand above a certain quantity to maintain the buffer stock of a fixed quantity Kanban.

Kanban Quantity Calculations Determining the fixed Kanban quantity is one of the most important tasks of Kanban planning and is often one of the most difficult tasks to perform. Finance and Operations can calculate the Kanban quantity by taking forecast, current demand, and historical demand into account.

Kanban Rule Setup Kanban rules are a material supply policy that governs process and transfer activities that are based on Kanbans. The Kanban rule defines the way in which an item is produced or transferred, and links the item to the activities within the production flow. Kanban rules are linked to a specific version of a production flow, because the Kanban rules are linked to these activities to define how they produce or transfer the various items. On creation, a Kanban rule inherits the effective and expiration date of the production flow version. A Kanban rule cannot be valid outside the validity period of the production flow version that it relates to. An expired Kanban rule can have a replacing Kanban rule that models the changed behavior for the product selection. The replacing Kanban rule can be part of the same production flow version or the next production flow version. At the point in time when a Kanban rule expires, the active Kanbans of the expired rule are counted as Kanbans of the replaced rule. When a Kanban handling unit for an expired fixed quantity rule is registered as emptied, a new Kanban is used for the replaced rule. The circulating cards of the replaced rule are inherited to the replacing rule just the same. Navigate to Product information management > Lean manufacturing > Kanban rules to create new Kanban rules.

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The following list describes the fields in Kanban rule fast tab: •

Type: Specifies whether the Kanban is a manufacturing Kanban that creates a Kanban process job or a withdrawal Kanban that creates a Kanban transfer job.

•

Replenishment strategy: Choose "fixed' when creating a fixed quantity Kanban rule.

•

Kanban rule: Automatically assigned number identifying the Kanban rule.

•

Product selection: The identification of the product selection of the Kanban rule. For fixed Kanban rule this field is faded.

•

First plan activity: Select the first activity of the Kanban rule. This links the Kanban to the production flow version activity. The first activity of a manufacturing Kanban rule must be a process activity. The first and only activity of a withdrawal Kanban rule must be a transfer activity.

•

Multiple activity: Select this check box to configure multiple activities for the Kanban rule. Only manufacturing Kanbans can have multiple activities.

•

Last plan activity: When the Multiple activities check box is selected, select the last activity of the Kanban rule. When Multiple activities are selected, the activity flow based on the production flow activity relations can be chosen to produce the Kanban specific flow. The lookup form displays all activities that are downstream from the first activity in the same production flow version.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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•

Register as empty: Select an option to define when material handling units are registered as empty. The options are as follows:

•

When handling units are received: It is when the last job of a kanban is completed, the kanbans are registered as empty and disappear from the kanban quantity overviews; this is the default setting for scheduled kanbans, and it can also be used for the other replenishment strategies; when used with the fixed quantity strategy, a new kanban is created whenever the last job of the previous kanban is completed.

•

When the source requirement is registered: it is when the products that are supplied by event kanbans are consumed by the demand source, the kanbans are registered as empty; they disappear from the kanban quantity overview in the kanban boards.

•

Manual (includes scanning empty): The kanbans must be explicitly registered as empty; use this setting when products are stored in supermarkets before they are consumed or shipped; this is the default setting for fixed quantity kanbans.

The following list describes the fields in Default fast tab: •

Product selection: Fixed quantity Kanban rules must always specify a product selection of the type Product, and the product cannot have optional product dimensions.

•

Product: When the Product option is selected in the Product selection field, select the item from the lookup list. If the product carries product dimensions, the Product dimension fields are activated. For fixed quantity Kanban rules, the product dimensions are mandatory.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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•

Product family: This field is not enabled for fixed quantity Kanban rules.

•

Valid -Effective and Expires: Select the dates when the Kanban rule becomes effective and when it expires.

•

Replaced rule: The rule used when a Kanban rule expires. The rule can belong to the same version or a new version of the same production flow and needs to have the same item relation and last activity of the Kanban flow.

•

Lead time: View the lead time that is needed to replenish the Kanban. The lead time is the actual lead time that is agreed upon to replenish a Kanban in a supermarket when the handling unit is empty. It is probable that the actual lead time is longer than the calculated lead time.

•

Unit of measure: The unit of measure that is used with the Lead time. When the unit of measure is changed, the lead time is recalculated according to the defined conversion of the old and new units of measure. Only units of measure of the class Time can be used.

The following list describes the fields in Quantities fast tab: •

Default quantity: Enter the target product quantity to use for each Kanban. This field is mandatory for fixed quantity rules.

•

Minimum quantity: This field is disabled for fixed quantity Kanbans.

•

Maximum quantity: This field is disabled for fixed quantity Kanbans.

•

Product quantity variance: Upon completion of a Kanban job, a quantity tolerance can be set up for each Kanban. Select this check box to allow the finished product quantity to

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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differ from the specified product quantity for each instance of a Kanban job that references the Kanban rule. •

Variance below: Enter the quantity by which the finished product quantity can be less than the specified product quantity.

•

Variance above: Enter the quantity by which the finished product quantity can exceed the specified product quantity.

•

Fixed kanban quantity: Enter the number of Kanbans that are required to cover the forecasted demand during the validity period of the Kanban rule. Kanban quantity calculations can be used to set the fixed Kanban quantity. The calculation is based on actual demand, forecast demand, or historic consumption.

•

Alert boundary minimum: A visual alert can be set up for Kanbans to show where planned Kanbans are below a defined level. Enter a number of Kanbans to define the minimum Kanban quantity for each work cell or supermarket. When the number of jobs for active Kanbans that are planned does not meet the specified minimum alert quantity, the background color is red instead of green. Active Kanbans can have any handling unit status except Empty. The Kanban rules are sorted by planning importance based on this alert boundary minimum.

•

Alert boundary maximum: Enter a number of Kanbans to define the maximum Kanban quantity for each work cell or supermarket. This boundary helps to visualize excess inventory in a supermarket. It also gives a visual signal when more scheduled or event Kanbans than expected are created for a Kanban rule.

•

Automatic planning quantity: To automatically plan a Kanban instead of manually loading it onto a work cell, an automatic planning quantity should be set. Enter the number of unplanned jobs that cause automatic planning to occur. An unplanned Kanban job has the status of not planned.

•

Maximum planned jobs: This field is disabled for fixed quantity Kanbans.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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The following list describes the fields in Quantities fast tab: •

Card number sequence: The Kanban card number sequence that is assigned to this Kanban rule. When a Kanban rule is created, the default number sequence from the production parameters is used.

•

Automatic printing: Select the event that causes automatic printing of Kanban cards. The options are: o

None: Automatic printing is not used. We recommend that you use this setting when circulating cards or electronic Kanban processing is used.

Creation: Print Kanbans when the Kanban is created. We recommend that you use this setting when a physical planning board for event Kanbans is used and circulating cards cannot be used.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Plan: Print Kanbans when the first job of the Kanban is planned. We recommend that you use this setting when a printed Kanban card triggers the processing of Kanban jobs on the shop floor.

Prepare: Print Kanbans when the first job of a Kanban flow is registered as prepared.

o o

Start: Print Kanbans when the first job of a Kanban flow is registered as in progress. Receive: Print Kanbans when the first job of a Kanban flow is registered as completed. This option is often used if batch or serial numbers of the finished items are printed on the Kanban card.

•

Print picking list with card: Select this check box to print the picking list with the Kanban card.

•

Kanban print instructions: Select the information to print on the Kanban card. The options are: o

Work instructions -- print the production instructions document that is attached to the Kanban.

Shipping instructions: it is only used for event Kanbans.

•

Circulating cards: Select this check box to use circulating cards with the current Kanban rule.

•

Number of active cards: Enter the number of active circulating cards that are in circulation at a given time for the Kanban rule.

•

Card assignment: Select the method of assigning circulating cards. The options are: o

Automatic: When a Kanban is created, a card is assigned automatically when these conditions are true: an unassigned active Kanban and an unassigned active card exist for a Kanban rule. This is the default setting.

When Kanbans are created before circulating cards are created, the cards are assigned automatically when the cards are created. If there is a shortage of cards, when a Kanban is registered as empty, the card is automatically assigned to a new Kanban. This is especially useful when circulating cards correspond to a limited number of conveyers, racks, or bins. •

Manual: You must assign a card manually in the Kanban board. You can do this when you prepare a Kanban job.

•

Single use kanbans use circulating cards: For fixed quantity Kanban rules, select this check box to use circulating cards with single use Kanbans. When the check box is not selected, single use Kanban cards are created for single use Kanbans. Circulating cards are then reserved for use with Kanbans that are not created for single use.

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The following list describes the fields in Production flow fast tab: •

First activity: View the production flow and version that the first activity references. If there are no Kanbans created for this rule, you can edit this field in the activity lookup form.

•

Last Activity: View the production flow and version that the last activity references. If there are no Kanbans created for this rule, you can edit this field in the activity lookup form.

•

Register as empty: Select an option to define when material handling units are registered as empty. The options for fixed quantity Kanbans are:

•

When handling units are received: When the last job of a Kanban is completed, the Kanbans are registered as empty and disappear from the Kanban quantity overview in the Kanban boards. When used with the fixed quantity strategy, a new Kanban is created whenever the last job of the previous Kanban is completed.

•

Manual (includes scanning empty): The Kanbans must be explicitly registered as empty. This setting is used when products are stored in supermarkets before they are consumed or shipped. This is the default setting for fixed quantity Kanbans.

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•

Inventory transactions: This option is enabled if the first activity, last activity, or both activities of the Kanban rule are configured to create inventory transactions. This field is automatically selected based on the activities in the production flow version.

•

Financial transactions: This option is enabled automatically when the Kanban rule creates inventory transactions, and one or more of these conditions are true: o

The Kanban type is "manufacturing".

The Kanban type is "withdrawal", and the picking and receipt locations are managed by subcontractors.

The Kanban type is "withdrawal", and the picking and receipt locations are on different sites.

•

The picking activity updates the on-hand inventory, and the receipt does not update on hand inventory but is transferred to work in process (WIP).

•

The picking activity does not update on hand inventory, but the receipt is transferred from WIP and does update on hand inventory.

•

Kanban flow defined: This option is enabled when a valid Kanban flow is defined for the Kanban rule. The Kanban flow defines the specific activity flow that this Kanban rule goes through if multiple activities are selected.

•

Warehouse: View the warehouse where products are supplied.

•

Location: View the location where products are supplied.

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The following list describes the fields in Kanbans fast tab: •

Kanban: The identification of the Kanban.

•

Item Number: The item number and any product dimensions that are selected in the Storage dimension groups form that describes the product that is replenished by the Kanban.

•

Kanban quantity: The product quantity that is replenished by the Kanban.

•

Handling unit status: The status of the material handling unit that references a Kanban. Handling unit status is determined by the corresponding Kanban job status. The handling unit status is assigned automatically. The options are: o

When the Handling unit status is Not assigned and the job status is Planned or Not planned, the first job is not prepared or started.

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When the Handling unit status is Assigned and the job status is Prepared, the material for the first job is picked. The handling unit is prepared and a Kanban card must be assigned.

When the Handling unit status is Received and the job status is Completed, the output from the last job is received at the incoming warehouse.

When the Handling unit status is Empty, the output supplied by the Kanban is consumed. The handling unit is now empty. Circulating cards are unassigned and reused.

Kanban Job Planning In Finance and Operations there are several methods to support planning Kanbans for various production scenarios in Lean manufacturing. Kanbans do not have to go through a manual planning process, but rather can be automatically planned onto the work cell. Various options exist to help support common planning scenarios such as automatic planning, Kanban schedule boards, and Heijunka leveling. For fixed quantity Kanbans, a planned Kanban based on this replenishment strategy cannot be manually firmed, because Kanbans are only re-created based on consumption. The initial number of Kanbans is defined manually or calculated based on the Kanban quantity calculation. Let's discuss planning Kanbans, and the mechanism to plan these Kanbans jobs on the Kanban schedule board.

Planning a Process Kanban Job The three possibilities to plan/prioritize a Kanban job are: •

Plan manually in the Kanban schedule board: the Kanban schedule board allows leveling and planning for a number of days or weeks ahead (depending on the period type that is related to the Lean production flow model.

•

Automatic planning based on the automatic planning quantity: whenever the number of unplanned jobs corresponds to this level, the automatic planning method is called for that exact number of Kanbans.

•

Denote a Kanban as a priority Kanban on the Kanban board for process jobs.

When the process job is not planned, the estimated start date and time of the job is determined out of the due date of the Kanban based on the Kanban flow entries that describe the various activities that the Kanban goes through. The Due Date of the process job is calculated as follow: Due Date of the process job = Due date of the Kanban -- sum of all the lead times of all activities of the Kanban flow after the process The planned period date of the job is set when the job is planned; it holds the start of the planning period.

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Work Cell Capacity A Kanban job is planned by assigning it to a period and a sequence within the period on a work cell.

The period types and the number of periods are defined on the resource groups in the Work cell capacity FastTab. The defined capacity will show as the available capacity for the period on the Kanban schedule board and will be consumed as automatic and manually scheduled Kanban jobs are loaded onto the schedule for that work cell.

Process a fixed Kanban Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/4-processfixed-kanban

Kanban processing Process Jobs Once a Kanban is planned, either automatically or by adding to the Kanban schedule board, the Kanban is then available for reporting on the Kanban board for process jobs. The Kanban can be prioritized, picked, or manufactured using this form. The Production control > Kanban > Kanban board for process jobs is designed to support the normal production flow, minimize interaction with the system, and give the work cell an overview of the current situation allowing the work cell to make ad hoc decisions.

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The board is also designed to support barcode scanning for the reporting of Kanbans, if that is desired. Consider the following options: •

Prepare: Sets scan mode to prepare Kanban jobs.

•

Select kanban: Sets scan mode to select a Kanban job in the job list.

•

Empty: Sets scan mode to empty handling unit of Kanbans.

•

Start transfer: Sets scan mode to start transfer jobs.

•

Complete transfer: Sets scan mode to complete transfer jobs.

•

Pick list: Used to manually print the pick list for the selected Kanban job(s).

•

Kanban: Use to manually print the Kanban card.

•

Start: Start one or multiple selected Kanban jobs.

•

Complete: Complete one or multiple selected jobs with the requested quantity.

•

Update registration: Update inventory receipts and register storage and tracking dimensions for the lot.

•

Complete (details): Complete one or multiple selected jobs and report detailed production data. This button will allow the reporting of a different quantity completed, scrapped quantities, updating the date/time and designating first time through.

•

Print: Prints the Kanban cards of the selected Kanbans in the process jobs list.

•

Cancel: Resets the status of a Kanban job from planned, prepared, in progress, or completed to not planned. To delete a Kanban, the status must be not planned.

•

Refresh cycle: Sets the refresh cycle for automatically refreshing the Kanban board for process jobs. By setting a refresh cycle time to the Kanban board, 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.

•

Job details: Sets the dimensions display for the various elements on the Kanban board for process jobs.

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There are several FastTabs available to display complementary data and support specific processes. When they are closed, the FastTabs do not consume runtime on update of the board. Therefore, we recommend that you close any FastTab that is not needed. When closing the board, the status of open/closed FastTabs is remembered (in the session data) and the board will be restored with this status when next used. The Production instructions FastTab displays a related document or picture that contains instructions or information related to the product or process for the machine operators. The Picking list FastTab displays the sum of material to pick for the selected jobs, one or multiple. The on-hand status is displayed for the picking list lines to display the availability of material. The picking list can be printed as a separate document or as an attachment to each Kanban card.

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The Pegging FastTab shows the Kanbans needed for selected jobs and the handling unit status of the pegged Kanbans. The Cycle time performance indicator FastTab 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. 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 only active, 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, and the control is inactive.

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 the Transfer jobs FastTab. The jobs can be selected and registered as started or complete in this control. A registration mode Start and Complete transfer can also be set. This FastTab supports the work of a user dedicated to a specific work cell. The user can control transfer in, transfer out, and picking processes in a single User Interface (UI), filtering all transactions related to the selected work cell. For a machine operator, the Transfer jobs FastTab should be kept closed.

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The Finished goods displays the Kanban rules for products supplied by the work cell. For each Kanban rule, all active jobs are shown sorted by job status. If a planned Kanban job is overdue, it has a time alert. The Kanban rules are sorted by urgency. The most urgent Kanban rule displays on the top of the overview. The shop floor supervisor controls how to plan incoming jobs based on the urgency and priorities.

You can also view the graphical report by selecting Chart view:

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The Materials displays the Kanban rules that supply material consumed by the selected work cell. The shop floor workers see an overview of the supply situation and the on-hand supply in the supermarkets to make priority and picking decisions.

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You can also view the graphical report by selecting Chart view:

Prepare Kanban Prepare is an optional status update performed with the Prepare button. The prepare function picks materials and prepares jobs to be in process. Materials with the flushing principle set to "Start" are physically posted when the prepare method is processed. A Kanban job that has components that are pulled through an event Kanban can only be prepared if the component Kanbans have been received.

Start Kanban Start is an optional status update performed with the Start button that starts one or multiple selected Kanban jobs. The start update sets the realized start date and time of the Kanban process job. If the Kanban job has not been through the prepare status, the start update will also prepare the Kanban job.

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Complete Kanban Complete must be performed to update the selected jobs and complete the Kanban process jobs with the requested quantity. The complete update sets the realized end date and time of the Kanban process job. If the Kanban job has not been through the prepare or start statuses, the complete update will also prepare and start the Kanban job. Completion of the Kanban can also be performed using the Complete Details button, which allows one or multiple selected jobs to report detailed production data. This button allows the reporting of a different quantity completed, scrap quantities, updating of the date/time and designation of first time through.

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The complete update performs the physical receipt and inventory transactions of the product at the location, if the receipt is inventory controlled. On the last process job of a Kanban, the components with flushing principle "Finish" are physically posted upon completing the Kanban. If a Kanban process job is completed with a different "Good quantity" than the product quantity (provided that the reported quantity is valid in terms of the Kanban rule), and the job is not the last job of the Kanban, all subsequent Kanban jobs are updated to the "Good quantity" of the reported job. The subsequent Kanban process jobs cannot process more items than are produced by the dependent job.

Kanban processing Transfer Jobs Transfer jobs are planned automatically upon original creation of the transfers or upon emptying of the Kanban. Transfer jobs do not go through the Kanban schedule board for processes. While transfer jobs are not planned, it is possible to select a Kanban as a high priority Kanban by selecting the Prioritize button on the Kanban transfer board.

Transfer jobs are visible and can be processed on either the Kanban board for process jobs or Production control > Kanban > Kanban board for transfer jobs. If a waterspider is used to pull the materials, the Kanban board for transfer jobs would typically be the best choice because it only shows transfers. If the cell personnel are performing the transfers, the Kanban board for process jobs could be used for reporting process and transfer Kanbans. This board has the many options such as: •

Update picking list: Opens the Pick form to allow updates to the picking list warehouse, location, and quantity of the item being picked.

•

Start: Registers a Kanban transfer job as in process.

•

Update registration: Allows registration of batch or serial numbers and splitting of a batch if required.

•

Complete: Registers a Kanban job as completed. www.dynamicscompanions.com Dynamics Companions

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Processing a Transfer Job A Kanban job of the transfer type can have these statuses: •

Not planned

•

Started

•

Completed

When the transfer job is not planned, the due date and time of the job is determined out of the due date of the Kanban based on the Kanban flow entries: Due date of transfer job = due date (Kanban) -- sum of all the activity times of all activities of the Kanban flow after the transfer When a transfer job is started, the status is changed to "In progress"; when a transfer job is completed, the status is changed to "Completed". The inventory transaction of the job is physically posted (if any) upon either status depending on the activity settings in the production flow.

Kanban quantity calculations and circulating kanbans Links: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/5-kanbanquantity-calculations-circulating-kanbans

Kanban Quantity Calculation Policies In Finance and Operations, a Kanban quantity calculation policy is used to define the parameters for the Kanban quantity calculation and group the Kanban rules that are usually calculated in the same regularity with the same parameters. The Kanban quantity calculation policy is then associated with the Kanban rules and used to perform the Kanban calculation. Navigate to Production control > Periodic tasks > Kanban quantity calculation > Kanban quantity calculation policies to create a new policy.

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•

Name: Identification of the Kanban quantity calculation policy.

•

Master plan: Actual demand is determined from the result of a master plan. Assign the master plan or forecast plan to be used when calculating Kanban quantities for this policy.

•

Minimum kanban quantity: The additional number of Kanbans that are added in the Kanban quantity calculation.

•

Safety factor: Safety factor is used in the calculation of the fixed Kanban quantity, for example if the 0.1 is used 10% is added to the calculated demand.

•

Include safety stock: When Include safety stock is not selected, the demand during lead time is considered constant, so the calculation of safety stock is not included in the calculation. In this case the formula equals:

Kanban quantity = (Average demand * Lead time * (Safety factor +1)) ÷ (Product quantity per handling unit) + 1 When Include safety stock is selected, the variation in demand during lead time should be included by calculating and adding safety stock. Kanban quantity = (Average demand * Lead time * (Safety factor +1) + Safety stock) ÷ (Product quantity per handling unit) + 1

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The safety stock is calculated considering the demand, variance and service level. •

Service level: If Include safety stock is selected, a service level must be defined. If, for example, the value 90 is used, the fixed Kanban quantity is calculated from an assumption that the probability of not experiencing stock out is 90%.

•

Period: Defines the period code for the calculation of demand. If the field is selected, the related fields of Days ahead and Days behind are enabled to define the period for the calculation. o

Days behind: Days behind looks at inventory transactions or Kanban jobs, in case the Kanban is not updating inventory. If, for example, a sales order has been shipped and invoiced 20 days before the calculation date and the demand period is 30, the already fulfilled demand from the sales order will be included.

Days ahead: Days ahead from the calculation date that demand will be included in the calculation of the fixed Kanban quantity, the result is dependent on the plan that has been used. If, for example, a sales order has a requested ship date 20 days from the calculation date and the demand period is 30, the demand and derived demands from the sales order will be included.

•

Season: Defines the period code for the calculation of demand. If the field is selected the related fields of Start day and month and End day and month are enabled.

•

Start day and month: Start day and month specifies the start day of the season. This day will be the starting day for calculating fulfilled demand from the present year and demand from the next year.

•

End day and month: End day and month specifies the end day of the season. This day will be the ending day for calculating fulfilled demand from the present year and demand from the next year.

Kanban Quantity Simple Formula The parameters configured in the Kanban quantity calculation policy build the formula to use when calculating the Kanban quantities. An example of a simple formula only includes the average daily demand and does not include safety factor or safety stock. This would be useful in scenarios where average daily demand during the lead time is considered constant. Kanban quantity = (Average daily demand * Replenishment lead time of Kanban rule) ÷ (Product quantity per handling unit or a Minimum Kanban Quantity)

Kanban Quantity Including Safety Stock Where demand during the lead time has a greater variation, including the safety stock and a service level in the calculation of the Kanban quantity is recommended. This formula includes the safety stock in the Kanban quantity calculation. Kanban quantity = (Average daily demand * Lead time of Kanban rule + Safety stock) ÷ (Product quantity per handling unit or a Minimum Kanban Quantity) + 1

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Kanban Quantity Including Safety Factor and Safety Stock A safety factor can be applied to both types of equations. It can also be used as an alternative to safety stock in the calculation. The safety factor is configured in the Kanban quantity calculation policy and adds a certain percentage to the calculated demand. Kanban quantity = (Average daily demand * Lead time of Kanban rule * (Safety factor + 1) + Safety stock) ÷ (Product quantity per handling unit or a Minimum Kanban Quantity) + 1

Associating Kanban Policy to Kanban Rule The Kanban quantity calculation policy is associated with the Kanban rule to define which parameters to use when calculating the Kanban quantity. This is done on the Kanban quantity calculation policies FastTab on the Kanban rule.

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Consider creating Kanban quantity calculation policies scenario USMF has been struggling with defining the right Kanban quantity for the Kanban work cells. This has led to stock outs in the work cells or an unnecessary buildup of Kanban inventory. It has been decided to calculate the Kanban quantity in a systematic way and to categorize the Kanban rules in different Kanban calculation policies. There is a huge variation in the demand for Contoso's products between the first and second half year. In the first six month of the year, the demand is very stable. In the second half year, the demand is unstable and stock outs in the Kanban work cells are experienced. It is Pierre's goal to define Kanban quantity calculation policies for the first and second half of the year with two determining parameters for calculating the right Kanban quantities. The scenario steps are: 1.

Pierre creates a Kanban quantity calculation policy for 1st half year. He sets up a period from 1st of January to 30th June. As the demand is stable in the 1st half year, Pierre does not select to include the calculation of safety stock in the policy.

Pierre creates a Kanban quantity calculation policy for 2nd half year. He sets up a period form 1st of July to 31st of December. As the demand is unstable in the 2nd half year, Pierre selects to include the calculation of safety stock in the policy.

Pierre associates the Kanban quantity calculation policies to the Kanban rules.

Calculating Kanban Quantities To calculate the Kanban quantities for Kanban rules, a Kanban quantity calculation is created and associated with the Kanban quantity calculation policy. The process of running the calculation includes generating the list of Kanban rules associated with the Kanban quantity calculation policy, calculating the Kanban rules, and updating the Kanban rules. When a Kanban quantity calculation is created, a Kanban quantity calculation policy is associated with the calculation. The periods of the Kanban quantity calculation are preset based on the Kanban quantity calculation policy and can be overwritten manually before calculating. To create a new Kanban quantity calculation, navigate to Production control > Periodic tasks > Kanban quantity calculation and click New.

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•

Name: Identification of the Kanban calculation

•

Policy: This field has reference to the Kanban calculation policies. The Kanban quantity will be calculated based on the determining parameters set up on the chosen policy. Only fixed quantity Kanban rules associated with the chosen policy will be included in the calculation. The field should be mandatory.

•

Status: The Kanban quantity calculation can be in these three states: o o o

Created: is the initial status. When lines have been created. Calculated: When the user calculates the lines for the first time, the status is Calculated. Updated: When the user chooses to replace Kanban rules generated from the Kanban status from Calculated to Updated.

•

Rule effective date: When the user chooses to replace Kanban rules, generated from the Kanban calculation, the new rules will be active on the specified Rule effective date.

•

Rule active as of date: The Rule active as of date determines which fixed Kanban rules that are going to be selected when Kanban calculation lines are generated. Only rules that are active on the selection date will be generated. This date is defaulted by the Rule effective date.

•

Fulfilled demand period start date: The Fulfilled demand period start date determines the date from when transactions, representing fulfilled demand, should be included in the calculation of the fixed Kanban quantity.

•

Fulfilled demand period end date: The Fulfilled demand period end date determines the date until when transactions, representing fulfilled demand, should be included in the calculation of the fixed quantity Kanban.

•

Demand period start date: The Fulfilled demand period start date determines the date from when transactions, representing demand, should be included in the calculation of the fixed Kanban quantity.

•

Demand period end date: The Fulfilled demand period end date determines the date until when transactions, representing demand, should be included in the calculation of the fixed Kanban quantity.

Calculation of Kanban Quantity Proposals Once the list of Kanban rules is generated, the Calculate button is used to perform the Kanban quantity calculation. The results update the Kanban quantity proposals of the Kanban rules. When the Kanban calculation lines are calculated for the first time, the status of the Kanban calculation changes from Created to Calculated. The calculation can also be configured to perform in a batch job. •

Fulfilled demand: The calculated average daily fulfilled demand in the defined period for fulfilled demand on the Kanban calculation.

•

Demand: The calculated average future demand in the defined period for demand on the Kanban calculation.

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•

Safety stock: The calculated safety stock in the defined period. Safety stock is only calculated if this is configured in the policy of the Kanban calculation. The defined period to calculate safety stock is from: Fulfilled and future demand in the period start date to demand period end date.

•

Product quantity: The product quantity is defaulted to the Kanban calculation from the relating Kanban rule. It is possible to change the value on the line, and in that case a new value for the Kanban quantity is calculated. The value can only be edited if the status of the Kanban calculation is Calculated.

•

Kanban quantity: The Kanban quantity is calculated by the Kanban calculation rounded up. It is possible to change the value of the Kanban quantity, and in that case a new value for the product quantity is calculated. The value can only be edited if the status of the Kanban calculation is Calculated.

•

Unrounded: This field shows the unrounded calculated value of the Kanban quantity.

The Kanban quantity calculation proposals are generated under the Kanban quantity proposals FastTab of the Kanban quantity calculation form. To generate the list of all Kanban rules that apply to the Kanban quantity calculation policy, select the Generate button. The generation will search the Kanban rules against the subsequent policies and generate a list of Kanban rules that apply in the Kanban quantity calculation lines. The Kanban quantity calculation policy of the Kanban calculation should match the Kanban quantity calculation policy associated with the Kanban rule. The Kanban rules must have an active date before or on the Rule active as of date field on the Kanban quantity calculation. Only rules that are active on this date will be selected. Additional Kanban rules can be added to the Kanban calculation by selecting the Add button. Kanban rules can be removed from the Kanban calculation by selecting the Remove button.

Calculating Safety Stock In the general formula for calculating safety stock, it is assumed that both lead time and material demands are not constant, but vary over time and that the variation of these sizes will follow a normal distribution. Within Dynamics 365 for Finance and Operations, it is assumed that lead time does not vary over time, thus the deviation over lead time will be zero. The service factor is calculated from a chosen cycle service level that is designated on the Kanban quantity calculation policy. For example, a 90% service level results in a service factor (z) of 1.29. The higher z is, the lower the risk of stocking out, but the higher the average inventory level is.

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Calculating Average Daily Demand The average daily demand for the periods in the Kanban calculation is calculated for both inventory controlled and non-inventory controlled Kanban rules. These consider both fulfilled demand and future demand. Average daily demand = Σ Demand (period) / number of working days in the period. For inventory controlled (last activity of the Kanban rule updates inventory): •

Fulfilled demand is calculated from the inventory transaction table.

•

Demand is calculated from the required transactions according to the plan provided in the Kanban quantity calculation policy. If no plan is given, the demand is determined from the inventory transaction table.

For non-inventory-controlled Kanban jobs: •

Fulfilled demand is calculated from Kanban jobs in job status Completed.

•

Demand is calculated from Kanban jobs where the job status is less than Completed.

Updating Kanban Rules To update the Kanban rules, select the Kanban rules to update and select the Update button. The Kanban rules can only be updated when the calculation is in status "Calculated". When the rules are updated, the Kanban calculation changes from status "Calculated" to "Updated". The update can also be configured to perform in a batch job. Try reducing the Kanban quantity or change the lead time on the Kanban rule and re-calculate to see different results.

Circulating and Single Use Cards For a circulating Kanban card, the printed cards are reused and circle physically between the item origin and the point of consumption. After you define the Kanban quantity, the needed cards are printed once. Fixed circulating cards can move between item origin and point of consumption multiple times a day. This replenishment strategy is mostly applied between cells of one site that have physical proximity; an example of this is to replenish a cell supermarket out of the main material warehouse. Kanbans created for single usage can be used to cover additional demand to level specific exceptional demand. Single use Kanbans are only (and always) based on fixed quantity rules and no specific rules need to be created for this pull type. Instead, the Kanbans have a flag that marks them as single use. You can also use event Kanbans for exceptional demand above a certain quantity to maintain the buffer stock of a fixed quantity Kanban.

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Exercise - Configure a fixed quantity Kanban rule Before you begin: To get the most benefit from this and other exercises in this module, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS). A new car speaker remote has been developed to compliment the car speaker kits that are sold at USMF. The production flow is already configured with multiple activities and now the products and Kanbans required to process the flow must be created. Products have been set up for the purchased un-programmed remote and for the remote that will be programmed through the activities of the production flow. The Bill of material (BOM) has also been created, adding the purchased unprogrammed remote as a BOM line. Once the BOM is created, Kanban rules are set up for the process activity to program the remote and for the transfer activity to transfer the programmed remote (now a finished good) to the warehouse and location where it will be stored until it is sold.

Creating the Kanban Rule for the Process Activity 1.

To create a new Kanban rule for the process activity, navigate to Product information management > Lean manufacturing > Kanban rules.

Click New.

Select the First plan activity called SpeakerTestAndPackaging.

Expand the Details FastTab.

In the Product., select L0001.

Expand the Quantities FastTab.

Enter a Default quantity of "100".

Enter a Fixed Kanban quantity of "4".

Expand the Kanban and cards FastTab.

10. Select the Circulating cards check box. 11. Change the Card assignment to "Automatic". 12. Click Save. 13. Click the Create cards button. 14. Deselect the Print new cards box. 15. Click Create. 16. Switch to the Kanbans FastTab. 17. Click Add.

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18. Verify that the default number of new Kanbans is 4. 19. Click Create. 20. Close all forms.

Creating the Kanban Rule for the Transfer Activity 1.

To create a new Kanban rule for the transfer activity, navigate to Product information management > Lean manufacturing > Kanban rules.

Click New.

Change the Type to "Withdrawal".

Update the First plan activity to "ReplenishSpeakerComponents".

Expand the Details FastTab.

Enter the Product L0001.

Switch to the Quantities FastTab.

Enter the Default quantity of "10".

Enter the Fixed Kanban quantity of "4".

10. Click Save. 11. Switch to the Kanbans FastTab. 12. Click Add. 13. Verify that the number of new Kanbans defaults to 4. 14. Click Create. 15. Close all forms.

Planning a Kanban on the Kanban Board When the Kanban jobs are not automatically planned, they must be dragged and dropped onto the desired period on the Kanban schedule board. 1.

To plan the Kanban, navigate to Production control > Kanban > Kanban job scheduling.

Change Work cell to "1250".

In the Display job status field select Not scheduled.

Select a Kanban job from the unplanned Kanban jobs, and then Click Schedule button. Repeat for the remaining Kanban jobs of your choice.

Exercise - Fixed Kanban job processing Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/7-exercisefixed-kanban-job-processing www.dynamicscompanions.com Dynamics Companions

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Kanban processing on the Kanban Board for Process Jobs The scheduled Kanbans are now ready to be processed. The Production control > Kanban > Kanban board for process jobs will be used to prepare, start, and complete the Kanbans. 1.

To prepare the Kanban, Production control > Kanban > Kanban board for process jobs.

For the first time when you open this form, all jobs from all work cells are shown. You can select the Work cell to filter the jobs.

Change the Work cell to 1250.

Select the appropriate Kanbans to prepare.

Click Prepare.

To start the Kanbans, click Start button.

To complete the Kanbans, click Complete.

Kanban processing on the Kanban Board for Transfer Jobs The manufactured Kanban is now ready to be transferred to its final location. The Kanban board for transfer jobs will be used to start and complete the Kanban. 1.

To begin the transfer process, navigate to Production control > Kanban > Kanban board for transfer jobs.

If entering the board for the first time you see all jobs from all production flows. Alternatively, you can expand Filters FastTab and change Production flow to only show jobs for a specific production flow such as Mid-Range Speaker 2 PF.

Select the Kanbans of your choice.

To start the transfer, click Start.

To complete the transfer, click Complete.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/8-knowledge-check

Create and process fixed Kanbans in Dynamics 365 for Finance and Operations knowledge check 1.

Which one of the following options in Revert job status reverses the physical transactions both receipt and issues? a) Completed to in progress b) Planned to not planned

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Prepared to planned

d) In progress to prepared 2.

Which one of the following options in Revert job status removes the planned starting date and the related sequence? a) Completed to in progress b) Planned to not planned c)

Prepared to planned

d) In progress to prepared 3.

Which one of the following options in Revert job status reverses the forward flushing issue transactions, if any? a) Completed to in progress b) Planned to not planned c)

Prepared to planned

d) In progress to prepared

Summary Link: https://docs.microsoft.com/en-us/learn/modules/create-process-fixed-kanbans/9-summary You now have learned that Manufacturing Kanbans are used to add value to a product and are planned on the Kanban schedule board and performed against on the Kanban board for process jobs. Withdrawal Kanbans are used to transfer items to various sites, warehouses, and locations but do not add value to a product. You also have learned that Kanban rules are supply policies that govern process and transfer activities that are based on Kanbans. The Kanban rule for fixed quantity Kanbans defines the replenishment strategy as fixed quantity. Fixed quantity Kanbans can be used to model fixed bin and fixed card Kanban systems. Kanban jobs are planned with various options to match the production planning requirements for different production scenarios. This is done using the Kanban schedule board and settings on the work cell for capacity and periods. Processing Kanban jobs is performed on the Kanban board for process jobs. There are several optional statuses that can be used throughout implementation depending on the production scenarios. This is performed on the Kanban board for process jobs. Kanban transfer jobs cannot be planned manually as Kanban process jobs are. Kanban transfer jobs are processed either on the Kanban board for process jobs or on the Kanban board for transfer jobs.

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Module 4: Create and Process Event Kanban Rules In this module we discuss the event kanbans and different ways to trigger them. Lessons •

Introduction

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Configure event Kanban rules

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Configure sales, Kanban, stock replenishment and BOM line events

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Practice labs

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Module summary

You learned how to configure and process event Kanban rules. You learned how to configure and work with: •

Kanban rules

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Manufacturing Kanbans

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Withdrawal Kanbans

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Create and manage Sales line event Kanban

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Create and manage BOM line event Kanban

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You also understand sample scenarios for event kanbans processes and different event kanban types.

Create and process event Kanban rules in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/ You use event kanbans to trigger and create related issues of raw materials when you create sales lines, estimate production orders, create kanbans from event Kanban rules, or run the pegging event processing where inventory has hit a minimum quantity. Let's see how to create and process event kanbans in Dynamics 365 for Finance and Operations. In this module, you will: •

Kanban rules

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Create and manage a sales line event Kanban

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create and manage a BOM line event Kanban

Introduction Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/1introduction-create-event-kanbans

Event kanban Event kanbans are only created out of the related demand, so event kanbans belong to the make-to-order category. They are triggered and create related issues when you create sales lines, estimate production orders, create kanbans that are supplied through event Kanban rules, or run the pegging event processing where inventory has hit a minimum quantity.

Kanban rule setup A Kanban rule is a material planning and replenishment policy that governs process and transfer activities that are based on Kanbans. The Kanban rule defines the way in which an item is produced or transferred, and links the item to the activities within the production flow. Event Kanban rules define which event triggers the Kanban and under what conditions the event Kanban should be created.

Sales line events The sales event is triggered by the creation or a change of a sales line, regardless of where the sales line was created. The sales events can also work in conjunction with the Capable to Promise (CTP) delivery date control of the sales line. Each sales line creates one or multiple Kanbans to fulfill the related demand, based on the maximum product quantity defined in the Kanban rule that corresponds with the maximum handling unit size. The Kanban cards that are printed for sales event Kanbans contain customer and customer order references and can be used as shipment labels for the handling units.

Scenario: The speaker cover paint shop production flow supplies painted covers to a supermarket where they can be picked for other manufacturing processes or for sales. Pierre and Eduardo have analyzed this production flow and decided that certain colors should be handled by using differing Kanban strategies. For the runner colors (red, green, and blue) a fixed quantity Kanban replenishment strategy was chosen. An event Kanban rule was also set up for the runners where a minimum event quantity of 40 is used to pick up the exceptional orders and instead of depleting the buffer, turn these into make-to-order Kanbans.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Several colors are built to customer forecasts (yellow, black and magenta), so Pierre and Eduardo decided to model these items using scheduled Kanbans so that Master planning could be used to plan these future requirements. Proposed solution for this scenario: For the uncommon colors (gold, silver, and the new platinum), an event Kanban was set up based on the sales line event to the effect that when a sales order for these colors is placed, it directly triggers the event Kanban to be manufactured. The platinum color is configured on the Kanban rule with automatic planning. Pierre has set up the production flow activities, item coverage, and Kanban rules for this scenario.

Pegging tree The pegging tree form can be used from the sales order to provide a quick inquiry of the availability of Kanbans. To view the pegging tree from the sales order line, select the Product and supply > Requirements > View pegging tree button. The pegging tree shows the Kanban issues from the sales order and will show multiple levels down. The Kanban jobs provide a quick visual showing the job status of the Kanban. Where the job status of the Kanban is completed, a check mark appears in the Kanban ticket icon on the pegging tree. The entire pegging tree can be planned using the Plan entire pegging tree button. This is useful where automatic planning is not set on the event Kanban rules.

Kanban line event Kanban line events are used to pull required material or semi-finished products to a downstream manufacturing process. Kanban line events are used to supply components that are not stored in a supermarket by the line side because they are not used frequently or the ability to supply of the upstream work cell or warehouse makes a buffer in the supermarket obsolete. These Kanbans (manufacturing or withdrawal) are created automatically or manually based on the requirements of the upper level Kanban. This type of Kanban is suggested where the components that are required vary by event and a high number of variants are required. Kanban line events can be used where materials are made to order on a "feeder cell" in a multiple assembly cell structure.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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process is controlled by event Kanbans for any component used in the production order, the related Kanbans are created upon estimation (manufacturing or withdrawal) of the related production order. On estimation of the production orders for the final assembly, the BOM line event Kanbans are created and appear on the work cell or the Kanban board for transfer jobs depending on the activity type. The BOM line for the component supplied by a BOM line Kanban must be set to a Line type of Pegged supply.

Stock replenishment event When you run Master planning in Finance and Operations, additional planned orders are created when minimum on-hand is reached. For a Lean manufacturing application that surveys minimum on-hand of important parts, this might lead to a delay of a day until the signal for replenishment reaches the replenishing work cell. Stock replenishment events are useful in a quick turning environment, where safety stock violations must instantly create a Kanban (manufacturing or withdrawal) to replenish the missing item. The pegging event processing in Lean manufacturing checks minimum inventory for selected Kanban rules and creates the needed Kanbans to replenish. Stock replenishment events are used to trigger Kanbans based on hitting a certain level of on-hand inventory. This has been integrated within Finance and Operations, where the item coverage settings on the item define the minimum stock that is required for each coverage dimension.

Item coverage settings The item coverage settings on the released products define the minimum stock that is required for each coverage dimension. The minimum stock is defined in the Minimum field on the coverage dimensions or by a Min./max. key. The planned order type can also be configured on the item coverage settings. Where a Kanban is used to supply the coverage dimension, this Planned order type is set to Kanban.

Configure event Kanban rules Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/2configure-event-kanban-rules A Kanban rule is a material planning and replenishment policy that governs process and transfer activities that are based on Kanbans. The Kanban rule defines the way in which an item is produced or transferred, and links the item to the activities within the production flow. Event Kanban rules define which event triggers the Kanban and under what conditions the event Kanban should be created. At the point in time when a Kanban rule expires, the active Kanbans of the expired rule are counted as Kanbans of the replaced rule. When a Kanban handling unit for an expired fixed quantity rule is registered

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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as emptied, a new Kanban is used for the replaced rule. The circulating cards of the replaced rule are inherited to the replacing rule just the same. Go to Product information management > Lean manufacturing > Kanban rules to create new event kanban rules. The following list describes the fields in Kanban rule FastTab: •

Type - Specifies whether the Kanban is a manufacturing Kanban that creates a Kanban process job or a withdrawal Kanban that creates a Kanban transfer job.

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Replenishment strategy - Choose Event when creating an event Kanban rule.

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Kanban rule - Automatically assigned number identifying the Kanban rule.

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Product selection - The identification of the product selection of the Kanban rule.

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First plan activity - Select the first activity of the Kanban rule. This links the Kanban to the production flow version activity. The first activity of a manufacturing Kanban rule must be a process activity. The first and only activity of a withdrawal Kanban rule must be a transfer activity.

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Multiple activities - Select this check box to configure multiple activities for the Kanban rule. Only manufacturing Kanbans can have multiple activities.

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Last plan activity - When the Multiple activities check box is selected, select the last activity of the Kanban rule. When Multiple activities are selected, the activity flow based on the production flow activity relations can be chosen to produce the Kanban specific flow. The lookup form displays all activities that are downstream from the first activity in the same production flow version.

•

Register as empty - Select this option to define when material handling units are registered as empty. The options are as follows: o

When handling units are received - When the last job of a kanban is completed, the kanbans are registered as empty and disappear from the kanban quantity overviews; this is the default setting for scheduled kanbans, and it can also be used for the other replenishment strategies; when used with the fixed quantity strategy, a new kanban is created whenever the last job of the previous kanban is completed.

When the source requirement is registered - When the products that are supplied by event kanbans are consumed by the demand source, the kanbans are registered as empty; they disappear from the kanban quantity overview in the kanban boards.

Manual (includes scanning empty) - The kanbans must be explicitly registered as empty; use this setting when products are stored in supermarkets before they are consumed or shipped; this is the default setting for fixed quantity kanbans.

The following list describes the fields in Details FastTab: •

Product selection - Event Kanban rules can specify a Product selection of the type Product, Product family or All. o

Product - The Kanban rule is valid for a single item number. For items with product dimensions the Kanban rule can be valid for a specific dimension or for all values of the

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product dimension. The Kanban rule is valid for all values of the product dimension by leaving the product dimension of the Kanban rule blank. o

Product family - The Kanban rule is valid for all items and the related product dimensions that are assigned to a single item allocation key.

All - The Kanban rule is valid for all products that are supplied by the Kanban rule's last activity.

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Product - When this option is selected, select the item from the lookup list. If the product carries product dimensions, the Product dimension fields are activated, but not mandatory.

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Product family - When this option is selected, select the Item allocation key from the lookup list.

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Valid -Effective and Expires - Select the dates when the Kanban rule becomes effective and when it expires.

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Lead time - View the lead time that is needed to replenish the Kanban. The lead time is the actual lead time that is agreed upon to replenish a Kanban in a supermarket when the handling unit is empty. It is probable that the actual lead time is longer than the calculated lead time.

•

Unit of measure - The unit of measure that is used with the Lead time. When the unit of measure is changed, the lead time is recalculated according to the defined conversion of the old and new units of measure. Only units of measure of the class Time can be used.

The following list describes the fields in Quantities FastTab: •

Maximum quantity - For event Kanban rules, enter the maximum product quantity to use for each Kanban. The value that is entered in the Default order settings, Stock quantity, Max. order quantity setting is used as the default value. The Maximum quantity field will override the default, but it cannot be more than the stock quantity setting.

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Product quantity variance - Upon completion of a Kanban job, a quantity tolerance can be set up for each Kanban. Select this check box to allow the finished product quantity to differ from the specified product quantity for each instance of a Kanban job that references the Kanban rule. o

Variance below - Enter the quantity by which the finished product quantity can be less than the specified product quantity.

Variance above - Enter the quantity by which the finished product quantity can exceed the specified product quantity.

•

Alert boundary minimum - A visual alert can be set up for Kanbans to show where planned Kanbans are below a defined level. Enter a number of Kanbans to define the minimum Kanban quantity for each work cell or supermarket. When the number of jobs for active Kanbans that are planned does not meet the specified minimum alert quantity, the background color is red instead of green. Active Kanbans can have any handling unit status except Empty. The Kanban rules are sorted by planning importance based on this alert boundary minimum.

•

Alert boundary maximum - Enter a number of Kanbans to define the maximum Kanban quantity for each work cell or supermarket. This boundary helps to visualize excess inventory in a supermarket. It also gives a visual signal when more scheduled or event Kanbans than expected are created for a Kanban rule.

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Automatic planning quantity - To automatically plan a Kanban instead of manually loading it onto a work cell, an automatic planning quantity can be set. Enter the number of unplanned jobs that cause automatic planning to occur. An unplanned Kanban job has the status Not planned. Example: An Automatic planning quantity of 1 will plan every unplanned job. An Automatic planning quantity of five will wait for five unplanned jobs to be generated and will then plan all five Kanban jobs. A planning quantity of zero must be manually planned on the Kanban schedule board.

•

Maximum planned jobs - When you use automatic planning of unplanned Kanban jobs, enter the maximum number of Kanban jobs that are planned for a specific Kanban rule. Use this limit to avoid overloading a work cell for scheduled and event kanbans. This situation could occur due to false demand or exceptionally large customer orders. We recommend that you use this setting and a maximum sales order quantity setting for sales event Kanban rules that use capable to promise (CTP) or automatic Kanban creation. These settings would limit the impact that erroneous order quantities could have on system performance. The following list describes the fields in Kanban and cards FastTab:

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Card number sequence - The Kanban card number sequence that is assigned to the Kanban rule. When a Kanban rule is created, the default number sequence from the production parameters is used. It is a proven best practice to use unique and short number sequences for fixed circulating cards. This helps to identify a specific card more efficiently.

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Automatic printing - Select the event that causes automatic printing of Kanban cards. The options are: o

None - Automatic printing is not used. We recommend that you use this setting when circulating cards or electronic Kanban processing is used.

Creation - Print Kanbans when the Kanban is created. We recommend that you use this setting when a physical planning board for event Kanbans is used and circulating cards cannot be used

Plan - Print Kanbans when the first job of the Kanban is planned. We recommend that you use this setting when a printed Kanban card triggers the processing of Kanban jobs on the shop floor.

Prepare - Print Kanbans when the first job of a Kanban flow is registered as prepared.

o o

Start - Print Kanbans when the first job of a Kanban flow is registered as in progress. Receive - Print Kanbans when the first job of a Kanban flow is registered as completed. This option is often used if batch or serial numbers of the finished items are printed on the Kanban card

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Print picking list with card - Set this slider to Yes to print the picking list with the Kanban card.

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Print instructions - Select the information to print on the Kanban card. The options are: o

Work instructions - Print the production instructions document that is attached to the Kanban.

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Shipping instructions - Print the complete ship to address and tracking information, including batch and serial numbers, on the Kanban card.

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Circulating cards - Select this check box to use circulating cards with the current Kanban rule.

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Number of active cards - Enter the number of active circulating cards that are in circulation at a given time for the Kanban rule.

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Card assignment - Select the method of assigning circulating cards. The options are: o

Automatic - When a Kanban is created, a card is assigned automatically when these conditions are true: an unassigned active Kanban and an unassigned active card exist for a Kanban rule. This is the default setting. When Kanbans are created before circulating cards are created, the cards are assigned automatically when the cards are created. If there is a shortage of cards, when a Kanban is registered as empty, the card is automatically assigned to a new Kanban. This is especially useful when circulating cards correspond to a limited number of conveyers, racks, or bins.

o •

Manual - You must assign a card manually in the Kanban board. You can do this when you prepare a Kanban job.

Single use kanbans use circulating cards - For fixed quantity Kanban rules, select this slider to use circulating cards with single use Kanbans. When the slider is not set to Yes, single use Kanban cards are created for single use Kanbans. Circulating cards are then reserved for use with Kanbans that are not created for single use.

The following list describes the fields in Events FastTab: •

Sales event - This defines that the Kanban rule is triggered off of a sales line event. This setting is used to configure Kanban rules that fulfill requirements directly from sales orders. Select one of these options to decide how the Kanbans are created: o o o

•

Not active - Kanbans are not created for sales events. Manual - You can create Kanbans manually for sales events. Batch - Kanbans are generated during batch processing for sales events.

Automatic - Kanbans are generated when sales events occur.

Not active - Kanbans are not created for BOM line events.

BOM line event - This defines that the Kanban rule is triggered off of a BOM line event. This setting is used to configure Kanban rules that replenish picking lists that are based on production orders. Select one of these options to decide how the Kanbans are created: o

Automatic - Kanbans are generated when BOM line events occur.

Not active - Kanbans are not created for Kanban line events.

Kanban line event - This defines that the Kanban rule is triggered off of a Kanban line event. This setting is used to configure Kanban rules that replenish material that is required for a downstream process activity. Select one of these options to decide how the Kanbans are created: o o

Manual - You can create Kanbans manually for Kanban line events. Batch - Kanbans are generated during batch processing for Kanban line events.

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Automatic - Kanbans are generated when Kanban line events occur.

Not active: Kanbans are not created for stock replenishment events.

Stock replenishment event: This defines that the Kanban rule is triggered off of a stock replenishment event. This setting is used to configure Kanban rules that replenish minimum inventory levels. Select one of these options to decide how the Kanbans are created: o

Batch Kanbans are generated during batch processing for stock replenishment events.

For example, a minimum quantity would be set against a sales line event to define the quantity that represents an exceptional order. Sales order lines that are entered for anything under this quantity would not create an event Kanban. Exceptionally large sales order lines would create an event Kanban or multiple event Kanbans.

Minimum event quantity - This defines the minimum quantity that is required on the source requirement to generate event Kanbans for the rule. Event Kanbans are generated when the quantity of the source requirement is equal to or greater than this field.

Event Kanban handling unit must be received on - Select the status of the source requirement (for example the sales line, Kanban job, or production order) that determines when material handling units of the referenced event Kanbans must be received. The options are: o

None - If sufficient on-hand inventory is available, the material handling units do not need to be received.

Picking - Material handling units must be received before the source requirement can be prepared. For sales events, this means that a packing slip can only be posted when sales event Kanbans are received.

Start - Material handling units must be received before a Kanban job or production order can start.

Finish - Material handling units must be received before a production order can be reported as finished.

End - Material handling units must be received before a Kanban job or production order can be completed.

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Delete unused event Kanbans - Enable this option to automatically delete referenced event Kanbans that have the handling unit status of Not assigned when the source requirement is registered as finished. This setting is used when Event Kanban handling unit must be received or is set to None.

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Source requirement reservation - Select this check box to override the current inventory reservation settings for demand source requirements such as sales order lines and production BOM lines. With this setting, the Kanban rule can enforce a consistent reservation, for example to make sure that the components supplied by event Kanbans are automatically reserved for the source of demand (production order or sales order).

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Configure sales, kanban, stock replenishment and BOM line events Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/3configure-sales-kanban-stock-replenishment

BOM line event Similar to Kanban line events, a production order can consume material that is supplied by Lean manufacturing. In a mixed mode environment, a production BOM is created based on a production order to withdraw material from warehouses or other upstream processes. If the warehouse or the upstream process is controlled by event Kanbans for any component used in the production order, the related Kanbans are created upon estimation (manufacturing or withdrawal) of the related production order. On estimation of the production orders for the final assembly, the BOM line event Kanbans are created and appear on the work cell or the Kanban board for transfer jobs depending on the activity type. The BOM line for the component supplied by a BOM line Kanban must be set to a Line type of "Pegged supply". Scenario: This scenario describes a mixed mode manufacturing environment where some parts of a production order are supplied by Kanban. In this scenario, the final assembly resource group is planned with production orders. Standard components that are required for the production order are picked from a supermarket. There are parts that have little demand and are therefore not placed in the supermarket. These "unpopular" items are instead produced to order in the Packaging work cell as an event Kanban based on a BOM line event. The production orders, upon estimation, create the event Kanbans based on the BOM line event to be produced on the Packaging work cell. Lars, shop floor execution/production supervisor for Packaging, then sees the Kanban demand and plans the event Kanbans together with the fixed quantity Kanbans for the standard components.

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Pegging tree The Pegging tree page can be used from the sales order to provide a quick inquiry of the availability of Kanbans. To view the pegging tree from the sales order line, select the Product and supply > Requirements > View pegging tree menu item. The pegging tree shows the Kanban issues from the sales order and will show multiple levels down. The Kanban jobs provide a quick visual showing the job status of the Kanban. Where the job status of the Kanban is completed, a check mark appears in the Kanban ticket icon on the pegging tree. The entire pegging tree can be planned using the Plan entire pegging tree button. This is useful where automatic planning is not set on the event Kanban rules.

Capable-to-Promise An important company objective in the Lean transformation process is improving the ability to deliver a product that is assembled to order or built to order with a competitive lead time. The Capable-to-Promise (CTP) functionality provides the order takers with accurate information at the point of order entry about the availability of products, material, and resources that are needed to satisfy a specific customer demand. This functionality can occur automatically at order entry time or in a batch job after the sales order has been entered. The availability of resources for Lean manufacturing can be determined by loading the Kanban jobs on the Kanban job schedule that are related to a work cell. The availability of material is determined by explosion and pegging, similar to manufacturing with production orders.

Delivery date control CTP The CTP delivery date control helps companies verify the requested ship date and potentially update the confirmed ship date on a sales line where there is a problem fulfilling the customer- requested ship date. This is enabled by extending the existing delivery control with a CTP option that triggers a Master Scheduling explosion and uses the returned futures date as the suggested ship date.

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These are prerequisites for running delivery date CTP. •

The configuration key for Master Planning is set.

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A dynamic plan is setup and assigned to the Master Planning parameters.

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Dynamic plan is configured for futures messages.

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The static and dynamic plans have been calculated

Where CTP is used for a given product, these prerequisites are suggested: •

Coverage group setting where Futures messages are enabled.

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Default order settings with a sales lead time of 0 days.

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Default order settings with the delivery date control of CTP.

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A Kanban rule exists for either scheduled or automatic sales event.

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Automatic planning on the Kanban rule set to 1.

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For scheduled Kanbans, a firming fence is required.

Batch calculation using CTP A calculation can be run after the sales lines have been entered from the header of the sales order. •

From the sales order header, select Sell > Generate > Calculate > Confirmed delivery dates.

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Run the CTP check for the sales orders without the Update confirmed dates option selected.

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The batch job will run the CTP explosion for all sales order lines and provide an InfoBar with the resulting confirmed ship dates, but without updating the sales line.

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If the proposed ship dates are acceptable, the calculation is run again with the Update delivery dates on sales lines option selected. This runs the CTP explosion and updates the confirmed ship dates and confirmed receipt dates on the sales lines.

Manual creation of event Kanbans Where the event Kanban is setup to manually create a Kanban based on the sales line event or Kanban line event, this manual creation can be done either on the Sales order line or the Kanban Details page, Production control > Kanban > Kanban job scheduling, or the Production control > Kanban > Kanban board for process job. Once the sales line is complete and the event Kanbans should be generated, select the Product and supply > New > Event kanban to generate the sales line events.

Stock replenishment line event When you run Master Scheduling in Finance and Operations, additional planned orders are created when minimum on-hand is reached. For a Lean manufacturing application that surveys minimum on-hand of

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important parts, this might lead to a delay of a day until the signal for replenishment reaches the replenishing work cell. Stock replenishment events are useful in a quick turning environment, where safety stock violations must instantly create a Kanban (manufacturing or withdrawal) to replenish the missing item. The pegging event processing in Lean manufacturing checks minimum inventory for selected Kanban rules and creates the needed Kanbans to replenish. Stock replenishment events are used to trigger Kanbans based on hitting a certain level of on-hand inventory. This has been integrated within Finance and Operations, where the item coverage settings on the item define the minimum stock that is required for each coverage dimension. Scenario: This scenario involves manufacturing a product where the safety stock has been violated due to shipping incoming sales orders. The event Kanbans based on the stock replenishment event are created to replenish the stock immediately. In this scenario, the painted speaker covers warehouse is replenished by scheduled Kanbans. The speaker cover paintshop cell that replenishes the warehouse can replenish any item in the warehouse within four hours. Pierre wants to lower the safety stock on the warehouse to less than one day (to a lower lead time than the cycle time of the MRP run). To avoid shortfall, Pierre sets up an event Kanban rule based on a stock replenishment event. When the on-hand falls under minimum inventory, a manufacturing Kanban is created to replenish the missing items. Pierre has set up the production flow activities and Kanban rules for this scenario. Eduardo defines the safety stock levels for the items and the forecast schedules. Master planning then creates the scheduled Kanbans where required. Susan then enters many small orders that reduce inventory of the product and violates the safety stock levels. This then creates event Kanbans that Lars notices on the final assembly work cell and expresses for Susan.

Batch processing of event Kanbans Use the Pegging event processing batch process in Finance and Operations to set up a batch process to create Kanbans that are based on events. To run the Pegging event processing, navigate to Production control > Periodic tasks> Kanban job batch processing > Pegging event processing. The Pegging event processing can be filtered by the production flow, activity, or Kanban rule for which to create the event Kanbans. It can also be filtered to create event Kanbans only for a certain upper level source requirement, for example, a sales order or Kanban. The stock replenishment event requires the pegging event processing to create the event Kanbans.

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Exercise - Create an event Kanban from a sales order Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/4exercise-create-event-kanban-sales-order

Before you begin: To get the most benefit from this and other exercises in this module, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS). A sales order has been received for a green speaker set, which triggers event Kanbans for the speaker set on the packaging work cell and the speaker kits on the speaker assembly work cell. Produce the speaker kits and speaker set to fulfill the customer sales order.

Kanban line event 1.

Go to Sales and marketing > Sales orders > All sales orders.

Click New.

Select the Customer account as US-016.

Click OK.

Enter Item number of "L0026".

Enter Quantity of "12.00".

Click Update confirmed date.

Select Site of 1.

Select Warehouse of 13.

10. Select Location of 13. 11. If Location is not set on the sales order, select the Sales order line > Display > Dimensions button. 12. Select the Product and supply > Requirements > View pegging tree menu button to view the event Kanbans created for the sales order.

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Plan the Kanbans Follow these steps to plan the Kanbans on the packaging and speaker assembly work cells. 1.

Go to Production control > Kanban > Kanban schedule board.

Select the Change cell button.

Update Work cell to 1250.

Plan the Kanban for 1250 by selecting the Kanban job.

Close all pages.

Go to Production control > Kanban > Kanban board for process jobs.

Select the Change cell button.

Update Work cell to 1250.

Highlight the desired Kanbans and click Start.

10. Click Complete. 11. Select the Change cell button. 12. Change Work cell to 1250. 13. Highlight a Kanban and switch to the Pegging tab on the Kanban board for process jobs work cell form. View the complete lower level speaker set Kanbans on the pegging tree. 14. Click Start. 15. Click Complete.

Transfer the speaker set Follow these steps to transfer the speaker set to the warehouse. 1.

Go to Production control > Kanban > Kanban board for transfer jobs.

Expand the Filters FastTab.

Select a Production Flow.

Click Update picking list.

Click Add picking line.

Click Confirm pick all.

Close the page.

Click Start.

Click Complete.

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Exercise - Set up a BOM line event kanban rule Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/5exercise-create-kanban-line-event In company USMF, a sales order has been received for a product L0001, a MidRangeSpeaker2, which triggers event Kanbans for the MidRangeSpeaker2 on the packaging work cell and the speaker kits on the speaker assembly work cell. Produce the speaker kits and speaker set to fulfill the customer sales order.

Enter the sales order 1.

Go to Sales and marketing > Sales orders > All sales orders.

Click New.

In the Customer account field, enter or select US-003.

Click OK.

In the Item number field, enter or select L0001.

In the list, click the link in the selected row.

Set Quantity to '1.00'.

Click Product and supply.

Click Event kanban.

10. Click Product and supply. 11. Click View pegging tree. 12. Close the page.

Plan the Kanbans 1.

Go to Production control > Kanban > Kanban job scheduling.

Click Plan entire pegging tree.

Select a few rows for those unplanned kanbans.

Click Plan entire pegging tree.

In the Work cell field, enter or select 1250.

Close the page.

Process jobs 1.

Go to Production control > Kanban > Kanban board for process jobs.

In the Work cell field, enter or select 1250.

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Select a few rows for those planned kanbans.

Click Prepare.

Expand the Details section. Note the details.

Collapse the Details section.

Expand the Picking list section. Note the raw materials needed.

Click Start.

Click Complete.

10. On the Action Pane, click View. 11. Click Process job list. 12. Select the Site check box. 13. Select the Warehouse check box. 14. Select Yes in the Save setup field. 15. Select the Location check box. 16. Click OK. 17. Select a planned job. 18. On the Action Pane, click Pick. 19. Click Update picking list. 20. Click Add picking line. 21. Click Confirm pick all. 22. Close all pages.

Perform transfers 1.

Go to Production control > Kanban > Kanban board for transfer jobs.

Select a job to start the transfer.

Click Start.

Click Complete.

On the Action Pane, click Transfer.

Select a few rows for those jobs to start transfer.

Click Start.

On the Action Pane, click Transfer.

Click Complete.

10. Click Update picking list. 11. Click Add picking line. 12. Click Confirm pick all.

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13. Close all pages.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/6knowledge-check

Create and process event Kanban rules in Dynamics 365 for Finance and Operations knowledge check 1.

You are creating a new event kanban rule and need to define when the last job of a kanban is completed, the material handling units should automatically be registered as empty. Which one of the following you should choose? a) When the source requirement is registered b) When handling units are received c)

Manual - includes scanning empty

You are creating a new event kanban rule and need to define when the products that are supplied by event kanbans are consumed by the demand source, the material handling units should automatically be registered as empty. Which one of the following you should choose? a) When the source requirement is registered b) When handling units are received c)

Manual - includes scanning empty

You are creating a new event kanban rule and need to define the material handling units must be explicitly registered as empty. Which one of the following you should choose? a) When the source requirement is registered b) When handling units are received c)

Manual - includes scanning empty

Summary Link: https://docs.microsoft.com/en-us/learn/modules/create-process-event-kanban-rules/7summary

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Event Kanbans are used where Kanbans should be generated only when certain events occur. The events triggering these Kanbans are sales line events, production BOM line events, stock replenishment events, and Kanban line events. Kanban rules for event Kanbans define the type of event that triggers the Kanban to be created. These triggers can occur automatically, upon running of a batch job, or manually depending on the type of event and the Kanban creation policy of the event. •

Sales line events - Are triggered based off of a sales line and can include the use of CTP to provide more accurate delivery dates to the customer.

•

Kanban line events - Are triggered based off of upper level Kanbans and can be automatically or triggered using batch processing.

•

BOM line events - Are triggered based off of upper level production order demand and are used in mixed mode environments where traditional production orders are used for the downstream process.

•

Stock replenishment events - Are triggered based off of an item reaching the minimum stock settings. These are useful in quick turning environment, where safety stock violations must instantly create a Kanban and cannot wait for master planning to run.

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Module 5: Create and Process Scheduled Kanban Rules The planned orders of type Kanban are created based on the Kanban rule and follow the standard Master Planning logic and horizons. Master Planning item coverage settings determine how the planned orders are created and whether they are automatically or manually firmed. In this module we discuss the scheduled kanbans in Dynamics 365 for Finance and Operations. Lessons •

Introduction

•

Configure scheduled Kanban rules

•

Understand Kanban quantity calculations and circulation Kanbans

•

Practice labs

•

Module summary

You learned how to configure and work with: •

Kanban rules

•

Manufacturing Kanbans

•

Withdrawal Kanbans

•

Create and manage scheduled Kanban

•

Supply schedule

•

Kanban quantity calculations

Create and process scheduled Kanbans in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/ Scheduled Kanbans are used for items that are not typically suited for fixed quantity Kanban rules. These products are not used frequently and you would base the production of these items on a schedule. The schedule will be analyzed and updated weekly based on customer forecasts. You will learn how to configure and work with: •

Kanban rules

•

Manufacturing Kanbans

•

Withdrawal Kanbans

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•

Create and manage scheduled Kanban

•

Supply schedule

•

Kanban quantity calculations

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Introduction to scheduled Kanbans Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/1introduction-scheduled-kanbans

Scheduled Kanban Master planning creates scheduled Kanbans automatically for planned Kanban orders to cover the requirements within the firm horizon of the production forecast. Scheduled Kanbans can also be manually created. The behavior of scheduled Kanbans in master scheduling is similar to production orders. Kanbans are created by firming planned Kanbans manually or using a firming fence. The scheduled principle is used for items or variants that are produced in a Lean work cell, but demand is created from forecast, customer, or dependent demand, without being explicitly built to order. The scheduled replenishment strategy should be applied when items are not supposed to be produced without explicit demand, but the minimum batch sizes cannot be lowered to a single piece flow. For example, you use scheduled Kanban where the minimum order size is greater than a quantity of one, or where multiple requirements need to be grouped into a single planned supply, and the coverage group in Master Planning is set to that of period. The master scheduling engine of Dynamics 365 for Finance and Operations creates issue transactions from customer demand, forecast, and production demand (BOM explosion), which are pegged against existing receipt transactions (supply) from planned or firmed production orders, transfer orders, and the new Kanban transaction types. Scheduled Kanbans can be used by a company where these scenarios are required: •

Loading of a work cell with scheduled demand on top of the fixed quantity Kanban jobs.

•

Creating Kanbans based on a minimum stock quantity and minimum/maximum keys to model demand that changes over time.

•

Modeling build to order scenarios in batch sizes higher than the average sales or picking line, grouping demand into small batches.

•

Modeling a mixed mode environment where it makes sense to use a consistent way of reporting on the production floor using the Kanban transactions.

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Kanban planned orders type Planned orders of type Kanban are created by Master Scheduling for items supplied by Kanbans. To have planned orders of type Kanban created by Master Planning, a default order type must be defined as Kanban. To schedule and firm the planned Kanban from Master Planning, a scheduled Kanban rule must be defined for the item, a group of items, or all items as defined in the Kanban rule. Setting a Kanban rule for an entire product group allows the user to define the settings for a group of items instead of each individual item.

Default order settings The Planned order type can be defined in multiple places. The Planned order type of Kanban can be defined on the company-specific product default order settings, or by location and product dimensions in the item coverage form.

Kanbans that are supplied on fixed quantity or event Kanban rules also should have the planned order type Kanban. The related items should have a firming fence of 0 days, else master planning might create warnings or errors when trying to firm.

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Planned order rules If the planned order setting of type Kanban is not set, the rules will not be searched and found by Master Planning. If the planned order type Kanban is set, but no scheduled Kanban rule is defined for the item on the dimensions that are defined as being Kanban controlled, then only sub orders marked as "dynamic" will be generated by Master planning to control the derived requirement. If a planned order of type Kanban has been created, a scheduled Kanban rule must exist to firm the planned order. When firming this planned order of type Kanban, one or more scheduled Kanbans are created. The default order sizes of planned orders of type Kanban are determined from the default order settings or the default order settings by site. The sizes of created Kanbans are determined from the product quantity settings of the Kanban rules.

Supply schedule The Supply schedule page, provides a comprehensive view of supply and demand. The supply schedule is displayed for a specific plan and can be filtered to show the supply and demand for a specific item and item dimension, a generic item with the item dimension left blank, or for a product family. A period template allows the supply schedule to be viewed by a configurable range of periods. The supply schedule also shows the planning fences with colors to indicate the fences in a visible way with the planning fence row and colors representing the fence. You can open the Supply schedule page from multiple locations such as Master planning > Master planning > Supply schedule. To remain in context with Lean manufacturing in Finance and Operations the descriptions of the supply schedule in this module are limited to Kanbans, but the Supply schedule page can also be used for production orders, transfer orders and purchase orders. When opening for the first time, you will be prompted with a dialog box, where you will specify fields such as Plan, Period template, Item number, Site and Warehouse, click OK.

Processing with the supply schedule The supply schedule provides the planner with visibility into the supply and demand of certain products, or groups of products, and also allows the planner to take action through firming planned Kanban orders and inserting new Kanbans. By highlighting the cell where the planned Kanban quantity is shown, the Planned production Kanbans FastTab opens and shows the planned Kanbans. These planned Kanbans can be processed with the Firm, Approve, and Change status buttons if a scheduled Kanban rule exists. Once the planned order is firmed, the Kanban then appears on the Kanban schedule board to be scheduled; or, if automatic planning is set on the Kanban rule, it shows up directly on the Kanban board for process jobs to be manufactured.

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New scheduled Kanbans can also be created from the supply schedule where supply does not meet demand. The Scheduled Kanban button creates a new scheduled Kanban straight from the supply schedule to cover the demand.

Supply schedule scenario Eduardo uses the supply schedule at Contoso to get an overview of production. Eduardo's overall goals are to make sure there is enough supply to meet customer demands but not so much that he builds up excess inventory. Eduardo works in a mixed mode environment with production order and Kanbans. The supply schedule provides an overview of all supply, including production orders and Kanban. This procedure includes the steps that Eduardo will take to obtain an overview of all supply, including production orders and Kanbans: 1.

Open a view of the supply schedule for a specific item or product family.

Examine the actual sales order demand, forecasted demand, transports, and planned production for this week.

Analyze the details for the planned production this week, which consists of Kanban jobs and production orders. Check the status of the production orders and Kanbans.

Find the projected available inventory for this week and the following week.

Enter additional scheduled Kanbans as needed where shortages exist.

Production schedule scenario Pierre and Eduardo have decided that a certain product is not suitable to be produced through fixed quantity Kanbans because the product is not frequently used. Consequently, Eduardo has decided to base production on a production schedule. The schedule will be analyzed and updated weekly based on the forecast that the customer sends. By doing this, Eduardo attempts to level production to meet the schedule without building inventory. Eduardo uses the Supply schedule form to view the demand and supply requirements for this product. Pierre has set up the production flow activities, item coverage, and Kanban rules for this scenario. Eduardo creates the production schedule as a forecast and runs Master Planning, resulting in scheduled Kanbans. Shannon, from shop floor execution, transacts against the Kanban and manufactures the product. This scenario describes the manufacturing process based on production schedules and scheduled Kanbans. The term production schedule is associated to a supply schedule with scheduled supply from production orders or manufacturing Kanbans. Dynamics 365 for Finance and Operations also allows a supply forecast schedule for production material. The supply forecast creates planned orders. Freezing an actual production schedule with a freezing fence blocks master planning from changing the planned order structure within each Master Planning run and allows a more stable planning upstream.

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In this scenario, the Supply schedule form plays a key role as it makes possible shortages against the production schedule transparent and allows for small adjustments within the supply schedule. This provides a stable plan that is in balance with resource capabilities and material demand. Eduardo uses the firming horizon of the item coverage to firm the Kanbans that are related to his production schedule. He can also create additional Kanbans to level production on top of the production schedule if required. Because this product is defined with a scheduled Kanban rule, additional demand will be caught by Master Planning.

Configure scheduled Kanban rules Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/2configure-scheduled-kanban-rules

Kanban rule setup A Kanban rule is a material supply policy that governs process and transfer activities that are based on Kanbans. The Kanban rule defines the way in which an item is produced or transferred, and links the item to the activities within the production flow. Based on the firm horizon of the supply forecast or actual demand from sales orders or production, Master Planning automatically creates the Kanbans that are needed to cover the related issues. The creation is done based on the Kanban rule for the firmed horizon. The planner can also manually create planned orders of type Kanban and firm them to scheduled Kanbans. Go to Product information management > Lean manufacturing > Kanban rules to create new scheduled kanban rules. The following list describes the fields in Kanban rule fast tab: •

Type - Specifies whether the Kanban is a manufacturing Kanban that creates a Kanban process job or a withdrawal Kanban that creates a Kanban transfer job.

•

Replenishment strategy - Choose Scheduled when creating a scheduled Kanban rule. Scheduled Kanbans are generated during Master planning based on actual demand, forecast, or minimum stock levels that signal demand. Scheduled Kanbans can also be created manually.

•

Kanban rule - Automatically assigned number identifying the Kanban rule.

•

Product selection - The identification of the product selection of the Kanban rule.

•

Multiple activities- Select this check box to configure multiple activities for the Kanban rule. Only manufacturing Kanbans can have multiple activities. Scheduled Kanban rules have to end with an activity that updates inventory; otherwise the activity selection is not valid.

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•

Register as empty - Select an option to define when material handling units are registered as empty. The options are as follows: o

When handling units are received - It is when the last job of a kanban is completed, the kanbans are registered as empty and disappear from the kanban quantity overviews; this is the default setting for scheduled kanbans, and it can also be used for the other replenishment strategies; when used with the fixed quantity strategy, a new kanban is created whenever the last job of the previous kanban is completed.

When the source requirement is registered - It is when the products that are supplied by event kanbans are consumed by the demand source, the kanbans are registered as empty; they disappear from the kanban quantity overview in the kanban boards.

The following list describes the fields in Details fast tab: •

Product selection: Scheduled Kanban rules can specify a Product selection of the type Product, Product family or All. o

Product - The Kanban rule is valid for a single item number. For items with product dimensions the Kanban rule can be valid for a specific dimension or for all values of the product dimension. The Kanban rule is valid for all values of the product dimension by leaving the product dimension of the Kanban rule blank.

Product family - The Kanban rule is valid for all items and the related product dimensions that are assigned to a single item allocation key.

All - The Kanban rule is valid for all products that are supplied by the Kanban rule's last activity. In other words, the Kanban rule is valid for all items of planned order type Kanban that have issues related to the supplied location (site, warehouse) of the Kanban rule.

•

Product - When the Product option is selected in the Product selection field, select the item from the lookup list. If the product carries product dimensions, the product dimension fields are activated, but not mandatory.

•

Product family - When the Product family option is selected in the Product selection field, select the Item allocation key from the lookup list.

•

Valid -Effective and Expires - Select the dates when the Kanban rule becomes effective and when it expires.

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•

The following list describes the fields in Quantities fast tab:

•

Default quantity - For scheduled Kanban rules, enter the default product quantity to use for each Kanban. A value in this field is not required for scheduled quantity rules.

•

Minimum quantity - For scheduled Kanban rules, enter the minimum product quantity to use for each Kanban. The value that is entered in the Default order settings, Inventory quantity, Min. order quantity setting is used as the default value. You can change it, but it cannot be less than the minimum order quantity for inventory.

•

Maximum quantity - For scheduled Kanban rules, enter the maximum product quantity to use for each Kanban. The value that is entered in the Default order settings, Stock quantity, Max. order quantity setting is used as the default value. The Maximum quantity will override the default, but it cannot be more than the stock quantity setting.

•

Product quantity variance - Select this check box to allow the finished product quantity to differ from the specified product quantity for each instance of a Kanban job that references the Kanban rule.

•

Variance below - Enter the quantity by which the finished product quantity can be less than the specified product quantity.

Variance above - Enter the quantity by which the finished product quantity can exceed the specified product quantity.

Alert boundary minimum - Enter the number of Kanbans to define the minimum Kanban quantity for each work cell or supermarket. This Kanban level is visible in the Kanban quantity overview of the Kanban boards. The Alert boundary minimum has these effects: o

When the number of jobs for active Kanbans that are planned does not meet the specified minimum alert quantity, the background color is red instead of green. Active Kanbans can have any handling unit status except Empty.

The Kanban rules are sorted by planning importance. This is calculated for active Kanbans using this formula:

Alert boundary minimum - number of jobs that have the Status = Planned •

Scheduled and event Kanban rules are not displayed on the Kanban quantity overview if these conditions are true:

•

Alert boundary minimum = zero

•

There are no active Kanbans.

•

Alert boundary maximum - Enter the number of Kanbans to define the maximum Kanban quantity for each work cell or supermarket. This boundary helps visualize excess inventory in a

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supermarket. It also gives a visual signal when more scheduled or event Kanbans than expected are created for a Kanban rule. The Kanban level is visible in the Kanban quantity overview of the Kanban boards. When the number of completed jobs for active Kanbans is more than the specified maximum alert quantity, the background color is red instead of green. Active Kanbans can have any handling unit status except Empty. •

•

The following list describes the fields in Kanban and cards fast tab: •

Card number sequence - The Kanban card number sequence that is assigned to the Kanban rule. When a Kanban rule is created, the default number sequence from the production parameters is used.

It is a proven best practice to use unique and short number sequences for fixed circulating cards. This helps to identify a specific card more efficiently. •

Automatic printing - Select the event that causes automatic printing of Kanban cards. The options are: o

None - Automatic printing is not used. We recommend that you use this setting when circulating cards or electronic Kanban processing is used.

Creation - Print Kanbans when the Kanban is created. We recommend that you use this setting when a physical planning board for event Kanbans is used and circulating cards cannot be used.

Plan - Print Kanbans when the first job of the Kanban is planned. We recommend that you use this setting when a printed Kanban card triggers the processing of Kanban jobs on the shop floor.

Prepare - Print Kanbans when the first job of a Kanban flow is registered as prepared.

o o

•

Print picking list with card - Select this slider to Yes to print the picking list with the Kanban card.

•

Print instructions - Select the information to print on the Kanban card. The options are: o

Work instructions - Print the production instructions document that is attached to the Kanban.

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Shipping instructions - Print the complete ship to address and tracking information, including batch and serial numbers, on the Kanban card.

•

Circulating cards - Select this check box to use circulating cards with the current Kanban rule.

•

Number of active cards - Enter the number of active circulating cards that are in circulation at a given time for the Kanban rule.

•

Card assignment - Select the method of assigning circulating cards. The options are: o

Manual - You must assign a card manually in the Kanban board. You can do this when you prepare a Kanban job.

•

Single use kanbans use circulating cards - For fixed quantity Kanban rules, select this check box to use circulating cards with single use Kanbans. When this slider is not selected, single use Kanban cards are created for single use Kanbans. Circulating cards are then reserved for use with Kanbans that are not created for single use.

Product family and item allocation keys Kanban rules can be set up against product families such that those items within the product family are represented by the Kanban rule. With scheduled Kanbans, these can be particularly useful because the product family is represented by an item allocation key. Item allocation keys can be used so that the total forecast quantity is distributed down to the item or item dimensions based on percentages. For example, a sales forecast line with 100 pieces is created on the item allocation key. The key contains two items with 45 percent and 55 percent, respectively. During forecast planning, a requirement line for each item number is created with 45 and 55 pieces, respectively.

Inventory considerations for scheduled Kanbans A scheduled Kanban by definition always ends at an inventory-controlled location. Therefore, a scheduled Kanban rule must have a last activity that updates on-hand inventory. When you try to select a last activity that is not inventory controlled, an error message is displayed.

Planning scheduled Kanbans Master Planning creates scheduled Kanbans automatically for planned Kanban orders to cover the requirements within the firm horizon of the requirements.

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Scheduled Kanbans can also be manually created. The behavior of scheduled Kanbans in Master Planning is similar to production orders. Kanbans are created by firming planned Kanbans manually or using a firming fence. The scheduled replenishment strategy is used for items or variants that are produced in a Lean work cell, but demand is created from forecast, customer, or dependent demand, without being explicitly built to order. The Master Planning engine of Dynamics 365 for Finance and Operations creates issue transactions from customer demand, forecast, and production demand, which are pegged against existing receipt transactions (supply) from planned or firmed production orders, transfer orders, and the new Kanban transaction types. For all uncovered demand, new planned orders are created using parameters such as minimum and maximum order size or the coverage code that allows grouping of issues by period. The planned Kanban orders that result from Master Planning follow the same concept as the other planned order types, but once firmed, result in a Kanban. The coverage group that is set up against the item can be set with a firming fence, such that the firming of the planned order does not have to be performed within that time frame.

Scheduled Kanban planned order quantities Planned orders of type Kanban accumulate issues before being firmed into scheduled Kanbans, depending on the coverage settings for the item. The quantities created in the planned Kanbans are controlled through the default order setting inventory quantities. For scheduled Kanbans, the minimum and maximum inventory settings in the default order settings are an important instrument to control the sizing of planned orders. Upon creation of the scheduled Kanban, however, the default quantity, minimum quantity and maximum quantity on the Kanban rule is used. There are as many scheduled Kanbans created as needed using the default quantity, to completely cover the requirements. When using automatic planning, the number of automatically scheduled Kanban jobs can be limited by the maximum planned jobs field. If no Default quantity is configured on the Kanban rule, the quantity of a scheduled Kanban is determined out of the requested quantity of the summarized issues: •

If the issue quantity is less than Minimum quantity, the minimum quantity is used.

•

If the issue quantity is greater than or equal to Minimum quantity, and less than or equal to Maximum quantity, the issue quantity is used as product quantity of the Kanban.

•

If the issue quantity is greater than Maximum quantity, the issue quantity is split into multiple Kanbans of the maximum quantity; the last issue with the remaining quantity is created with at least the Minimum quantity.

Setting a Minimum quantity for this case might lead to unintended overproduction. For example, if a minimum product quantity is set to 20 and the maximum to 30, with an issue quantity of 40, then two Kanbans are created.

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This creates one Kanban for 30 pieces and one Kanban for 20 pieces, leading to overproduction of 10 pieces. This is, however, useful when delivering in full boxes. It is also important to note that if the coverage code is set to period, this would reduce the likelihood of this scenario occurring as the requirements are grouped together. All planned Kanbans can be canceled and changed just as any other planned order, providing that it is outside the firming or freezing time fences or the planned Kanbans have not been approved. If an action message has been disabled, then no action will be generated, similar to any other planned item. Actions only apply for items with inventory transactions; therefore, there are no action messages for non-inventoried items. If an item can be supplied by an event rule with a Kanban creation method of batch, and a scheduled Kanban rule, the event processing for the item must be finished before Master Planning can be progressed for that item. This creates a dependency between the event batch processing and Master Planning. The user should make sure that the pegging event processing job is run before Master planning.

Exercise - Scheduled Kanban rule setup Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/3exercise-scheduled-kanban-rule-setup

Before you begin: To get the most benefit from this exercise we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS). The company USMF has decided that the L0025 WLAN Radio software product is going to be planned off of a production schedule that results from a master planning run.

Configure item coverage 1.

Go to Master planning > Setup > Item coverage.

Use the Quick Filter to filter on the Item number field with a value of 'L0025'.

Click Item coverage.

Click New.

Set Minimum to '150.00'.

In the Warehouse field, enter or select 13.

Click the General tab.

Select the Override time fences check box.

In the Automatic firming time fence (days) field, enter '1'.

10. Click the Lead time tab.

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11. Select the Production check box. 12. In the Production time field, enter '1'. 13. Select Yes in the Working days field. 14. Click Save. 15. Close all pages.

Create scheduled kanban rule 1.

Go to Product information management > Lean manufacturing > Kanban rules.

Click New.

In the Replenishment strategy field, select 'Scheduled'.

In the First plan activity field, enter or select Final assembly.

Collapse the Kanban rule section.

Expand the Details section.

In the Product field, enter or select L0025.

In the list, click the link in the selected row.

In the Configuration field, enter or select 01.

10. Click Save. 11. Close the page.

Run master planning 1.

Go to Master planning > Master planning > Run > Master planning.

In the Master plan field, enter or select DynPlan.

Expand the Records to include section.

Click Filter.

In the Criteria field, type 'L0025'.

Click OK.

View results 1.

Go to Master planning > Master planning > Planned orders

In the Quick filter type value of "L0025" on the "item number" and press enter.

Review planned kanbans for L0025.

Select the line with quantity of 150

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Verify the results. The kanbans where generated by Master planning.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/4knowledge-check

Create and process scheduled Kanbans in Dynamics 365 for Finance and Operations knowledge check 1.

You are creating a new scheduled kanban rule. Which one of the following helps visualize excess inventory in a supermarket? a) Automatic planning quantity b) Alert boundary maximum c)

Maximum planned jobs

You are creating a new scheduled kanban rule. Which one of the following helps configuring the kanban rule to avoid overloading a work cell for scheduled Kanbans? a) Automatic planning quantity b) Alert boundary maximum c)

Maximum planned jobs

Manual - includes scanning empty

Summary Link: https://docs.microsoft.com/en-us/learn/modules/create-process-scheduled-kanbans/5summary Scheduled Kanbans are used where production occurs in a Lean work cell, but demand is created from forecast, customer, or dependent demand, without being explicitly built to order.

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In this module you learned about the the setup, planning, and processing of scheduled Kanbans in Finance and Operations, including the following: •

Item coverage settings and coverage group settings are used when you create planned Kanbans.

•

You can use item allocation keys to create scheduled Kanban rules for product families.

•

Master planning creates planned Kanbans that are firmed and create scheduled Kanbans.

•

The Supply schedule page provides an overview of supply and demand, including Kanbans.

This module helped you to set up, plan, and process Kanban jobs using the supply schedule, Kanban scheduling board, and the Kanban board for process jobs.

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Module 6: Configure Activity-Based Subcontracting and Production Flow Costing The basic principle of a production flow does not change when activities are subcontracted using Finance and Operations; material still flows between locations, process activities convert material to products, and transfer activities move material or products from one location to another. In Dynamics 365 for Finance and Operations, there are two approaches for subcontracting: production orders and Lean manufacturing. The first approach models the subcontracting work as a service that is related to an activity of a production flow. A cost group type, direct outsourcing, is required to be configured, so that the subcontracting services are not as part of a BOM. The cost accounting of subcontracted work is completely integrated in the new costing for manufacturing in Microsoft Dynamics 365 for Finance and Operations Lessons •

Introduction

•

Configure activity-based subcontracting

•

Understand production flow costing

•

Practice labs

•

Module summary

In this lesson you learned how to: •

Configure activity-based subcontracting

•

Configure production scheduling and subcontracting

•

Designate vendors as subcontractors

•

Configure production flow costing

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Configure activity-based subcontracting and production flow costing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/ The subcontracting functionality in Dynamics 365 for Finance and Operations offers visibility of the components provided to the subcontractor, and also, if required, capacity visibility at the subcontractor. Additionally, working with the Kanban planning and process boards allows companies to make quick, informed decisions to effectively manage demand variations specially analyzing the production flow costing in Lean manufacturing. In this module, you will learn how to: •

Configure activity-based subcontracting

•

Designate vendors as subcontractors

•

Configure production flow costing

Overview of subcontracting and production flow costing Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/01-overview-subcontracting-prod-flowcosting The basic principle of a production flow does not change when activities are subcontracted using Finance and Operations; material still flows between locations, process activities convert material to products, and transfer activities move material or products from one location to another.

Subcontracting Subcontracting, or outsourced manufacturing, for a company can combine many components into multiple steps; some of these steps will occur within one or more in-house manufacturing facilities and other steps will be completed outside by one or more vendors. This type of work can result in complexities regarding the tracking of components and estimated completion dates. Production flows, as with in-house manufacturing, are the controlling part of the subcontracting process, defining the various activities of the flow. A Kanban that is processed through the production flow activities will create purchase orders for vendor services; accordingly, the Kanban will update after

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completion of the vendor services. A production flow that contains a service item, where the resource group has a vendor as a resource, causes the system to create purchase orders. In Finance and Operations, there are two approaches for subcontracting: production orders and Lean manufacturing. The first approach models the subcontracting work as a service that is related to an activity of a production flow. A cost group type, direct outsourcing, is required to be configured, so that the subcontracting services are not as part of a BOM. The cost accounting of subcontracted work is completely integrated in the new costing for manufacturing in Microsoft Dynamics 365 for Finance and Operations.

Subcontracting activities and manufacturing Kanbans Subcontracting activities are modeled as activities of a production flow and use manufacturing Kanbans for the processing that occurs at the vendor. Locations and work cells can be modeled as vendors managed by assigning the vendor account to a warehouse or to a resource of a resource group. Transfer activities can also be used in conjunction with the subcontracting and can even be configured where the payment for the shipment is third party, the recipient, or the shipper. The transfers to and from the subcontractor are modeled as explicit transfer activities to support the picking and shipment process. If an explicit registration is not needed to support the physical transport, the transfer activities can simply be left out. A service purchase order is created in the background for payment of the subcontracting service that is performed against the Kanban. Dynamics 365 for Finance and Operations supports the ability to choose alternate activities to facilitate level loading. Processes normally done internally can be subcontracted when overloads occur. The ability to select from multiple subcontractors for an activity is also supported.

Production flow costing In Dynamics 365 for Finance and Operations, costing for Lean manufacturing operations uses the cost accumulation method backflush costing. Backflush costing is used to simplify and, in some cases, eliminate the need for systematic and sequential reporting of resource usage (material and operation resources) for a production flow. Under the backflush costing method, the direct and indirect material at standard cost for items supplied is accumulated in the production flow's work in progress. Conversion costs (direct and indirect manufacturing costs) are absorbed at standard cost upon crediting production flow work in progress for completed quantities

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Subcontracting capabilities Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/02-subcontracting-capabilities Subcontracting for Lean manufacturing in Dynamics 365 for Finance and Operations separates the material flow from the purchase process of the services. The purchase order is created automatically when the Kanban status is updated at least to Planned. These service items are used on purchase orders to represent the activity that the vendor will do as part of the outside process. It contains the cost and results in an accounts payable billing. When the vendor reports completing the work, the purchase order receipt is posted for the services. When the related products are received, the Kanban state is updated to Completed and the finished item is received into inventory. We recommend performing these actions when subcontracting for an activity has been negotiated with a vendor: •

Create the service item which is a type of product.

•

Create the purchase agreement and agreement line for the vendor by using the service item.

•

Create a resource group with the role of a work cell for the subcontractor that provides the service.

•

Create a new version of a production flow (or a new production flow).

•

Create a new production flow activity and relate the agreement to the activity.

•

Connect the subcontracted activity to the other activities of the production flow if applicable.

•

Validate and activate the flow.

Subcontracting a vendor Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/03-subcontracting-a-vendor In Dynamics 365 for Finance and Operations, you can create purchase agreements and associate them with production flows. The purchase agreement contains all the pricing information for the associated service, which is provided by the subcontractor. Release orders will be created from the purchase agreement to signal demands, manage confirmations, report receipts and pay for the subcontracting service. For cost calculation of the products, a standard cost of the service has to be defined. This can be done by selecting Standard cost in the Inventory model field of the item model groups, the manufactured products are going to be assigned to.

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To be available for use with activity-based subcontracting, a purchase agreement with the vendor is needed. For more information regarding purchase agreements and the procure-to-purchase process see the links in the Summary unit at the end of this module.

Resource group acts as a work cell To configure a work cell as subcontracted, a resource of the vendor type needs to be created and associated with the work cell (resource group). The vendor defined in the purchase agreement must also be the vendor that is connected to the work cell.

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A runtime cost category with a "direct outsourcing" cost group type should be assigned to the work cell. The cost categories for setup and quantity are not needed. In Finance and Operations, locations and work cells can be modeled as vendor-managed by assigning the vendor account to a warehouse or to a resource of a resource group.

Subcontracting service Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/04-subcontracting-service The subcontracting service is assigned to the production flow activity using the purchase agreements. The purchase agreement contains the service, and the pricing information for the associated service. When assigning the subcontracting service to the subcontracting activity within the production flow, the subcontracting service terms can be configured to define the basis for paying the vendor. Navigate to Production control > Periodic tasks > Kanban job batch processing > Subcontracting documents.

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•

Production flow - Allows you to select the production flow for creating the subcontracting documents.

•

Plan activity - Allows you to select the activity name for creating the subcontracting documents

•

Kanban rule - Allows you to select the Kanban rule for creating the subcontracting documents

•

Vendor account - Allows you to select the vendor for creating the subcontracting documents

•

From date - Select only jobs with the job date equal to or after this date.

•

To date - Select only jobs with the job date equal to or before this date. For planned jobs the planned period date is used. For completed jobs the actual completion date is used.

•

Minimum job status - Minimum job status allows you to choose which Kanbans you want to generate purchase documents for: o o o o o

Not planned Planned (recommended for purchase order creation) Prepared (recommended for purchase order creation) In Progress (recommended for purchase order creation) Completed (recommended for purchase order receipt)

•

Release purchase orders: When selected, the utility will generate purchase release orders from the purchase agreement for the Kanbans that have not had releases already created for the selection criteria.

•

Aggregate purchase lines by: Dynamics 365 for Finance and Operations provides various selections to aggregate demand. These are: o o

Day - creates one purchase order for each vendor for all Kanbans that are scheduled for an individual day

Month - creates one purchase order for each vendor for the month selected

•

None - creates a purchase order for each Kanban

All - creates a purchase order for each vendor for Kanbans

Receipt advices - When selected, the utility will generate purchase receipts for existing purchase orders. This option is only available for completed Kanbans.

Finance and Operations, allows you to procure pay, schedule, and receive the service items that are used in the subcontracting process. The purchase document creation is run individually or placed in a batch queue to pay, schedule, and receive the process. The utility creates purchase order releases off of the purchase agreement and posts receipts based on the completed subcontracted jobs previously generated as a release for the purchase agreement. The action is defined by using the selection criteria on the form.

Assigning multiple service terms Dynamics 365 for Finance and Operations allows you to have multiple service items for each production flow activity. www.dynamicscompanions.com Dynamics Companions

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To assign multiple service items to one flow, select the Add button in the Service terms FastTab and follow the wizard. Assign output products to service terms. An output product is the item that is produced by the subcontractor. A different service term can be a different service product or just a different calculation/service ratio.

Production flow with subcontracting activities The basic principle of a production flow does not change when activities are subcontracted. Material still flows between locations, process activities convert material to products, and transfer activities move material or products from one location to another. Both process and transfer activities can be configured as subcontracting activities. As any other activity in a production flow, subcontracted activities can consume and supply inventoried, non-inventoried (WIP), and semi-finished material and products. The processes to schedule and implement subcontracted activities are the same in all cases, and are identical to the processes done for internal work. Dynamics 365 for Finance and Operations identifies a work cell or warehouse as a vendor type when you create activities within production flows; additionally, it automatically populates this information into the activity wizard.

Transfer activities as subcontracting activities Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/05-transfer-activities Transfer activities can be configured as subcontracting activities. The subcontracting payment is determined by a combination of the Warehouse and Freighted by field in the activity setup. A transfer activity is configured as a subcontracted activity, depending on the Freighted by field of the transfer activity and the warehouse setup. The activity is subcontracted if the Freighted by is set to Shipper and the Replenishing warehouse is managed by the vendor. The activity is subcontracted if the Freighted by is set to Recipient and the Replenished warehouse is managed by the vendor. If the warehouse is managed by the vendor, the warehouse will have the Vendor account designated as the subcontractor.

Subcontracting as an alternate resource Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/06-subcontracting-alternate-resource Finance and Operations, allows you to schedule Kanbans on alternate resources. This functionality allows the value stream manager to use alternate resources to balance the workload throughout his or her

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organization. To optimize the throughput in any process, the Production control > Kanban > Kanban job scheduling has the function called use alternative Kanban rule. This function allows the planner to reschedule a Kanban that was originally created for one work cell to an alternative work cell. This cell could be an alternate in-house resource or a subcontracting resource; the process for the planner is the same for both. The planner can assign an alternate Kanban rule to the Kanban job straight from the Kanban schedule board. This is done by selecting the Kanban job and selecting the Use alternative kanban rule button.

Open Kanban The planner navigates to Production control > Kanban > Kanban schedule board and in this form can also change the Kanban rule by right-clicking on the Kanban and selecting Open kanban. The Plan > Use alternative kanban rule button can then be used to assign an alternate Kanban rule to the Kanban job.

Alternate Kanban functionality To use the alternate Kanban functionality, certain prerequisites have to be met in the Kanban rules. •

Alternate Kanban rules only work with scheduled or event Kanbans, not with fixed quantity Kanbans.

•

Alternate Kanban rules must have the same of these functions: o o o

•

Replenishment strategy (scheduled or event) Supplied location (site, warehouse, location)

Type of event (sales, BOM, Kanban, minimum stock)

The Kanban has handling a unit status of Not assigned

The Kanban rule of a Kanban can be changed to an alternative Kanban rule if this occurs: o

•

Product selection

The Kanban jobs are not planned

The Kanban has replenishment status of Scheduled or Event

Delete old Kanban jobs and Kanbans

When you change a Kanban rule, the conversion will perform these tasks: o o o

Create new Kanban jobs and Kanbans Preserve the Kanban quantity and due date Transfer the event pegging to the new Kanban, for events

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Cost accounting of subcontracted services Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/07-cost-accounting-subcontracted-services Activity-based subcontracting in Dynamics 365 for Finance and Operations uses process activities as part of the cost calculation for the finished product based on the production flow using a cost group type of Direct outsourcing. Receipts for subcontractor services and invoices are directly contributing to the cost of the production flow. Output product receipts and vendor invoices are reconciled against the work in progress (WIP) accounts. Variances are accounted for in the backflush costing process.

Direct outsourcing cost group type The cost group type of Direct outsourcing is assigned to all work provided by subcontracting work cells.

To properly calculate the item cost for subcontracting, a few prerequisites must be set up: •

A cost group type of Direct outsourcing is assigned to all subcontracting work cells.

•

Subcontracting must be activated in the costing sheet, with the cost groups for direct outsourcing associated with them.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Kanban rules are created with the subcontracting activities in the production flow.

When calculating the item cost based on the production flow, Finance and Operations uses the subcontracting service activity settings to define the item cost. The cost breakdown shows the service item instead of the work cell as a resource.

Subcontracting cost flow Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/08-subcontracting-cost-flow Activity-based subcontracting in Dynamics 365 for Finance and Operations accounts for cost contributions to production flows based on subcontracted production flow activities. The cost contribution of subcontracted activities is estimated at standard cost of the service using the service quantity calculation for the quantity used for the BOM-calculation. By default, this is the inventory default order quantity of the item. When you receive material back from the subcontractor, and after you post the receipt advisory advice or a vendor packing slip on a purchase order that was created for a subcontracted activity, Finance and Operations accounts for the value of the receipt in the WIP accounts of the production flow. This debit the actual production flow work in process for the service that is provided by the subcontractor to the company. Deviations of invoices to the receipts are also accounted as variances to the production flow. The new cost category introduced in Finance and Operations allows for transparent tracking of the value of subcontracted work that is allocated to WIP and consumed each period. The backflush costing for Lean manufacturing at the end of a costing period calculates the actual variances of the products to standard cost for products that are produced out of the production flow during the costing period.

Consider the subcontracting cost flow scenario This scenario describes the subcontracting cost flow, where material is left over in the WIP accounts throughout the subcontracting process. In this scenario, the product that is being manufactured out of the subcontracting process is L0101, a Speaker driver. The subcontractor performs the process. The finished Speaker driver has a standard cost of $ 0.90. This standard cost is calculated as such: •

Direct material = $ 0.10; calculated with1 unit for each product of item L0101, Speaker driver with a cost of $0.10.

•

Indirect cost = $ 0.20; calculated with 200 percent of direct material cost.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Direct outsourcing = $ 0.60; calculated as 1 unit of service for the subcontracted activity for each product at a cost of $0.60.

Currently, four Kanbans for 50 units each have been initiated, one Kanban of 50 units has been produced, and three Kanbans of 50 units of raw materials have been replenished into the production flow. One hundred (100) units of service for the subcontracting process have been received at $0.65 for every unit. Fifty (50) of these units were invoiced at $0.70 for every unit. These steps show what occurs within the subcontracting process and the subsequent results of those actions. 1.

The subcontractor delivers 50 units at a standard cost of $.90 for each unit. This results in a WIP credit of $45 and a finished goods debit of $45.

The product receipt for 100 service units is received at $0.65 for each unit, resulting in a liability credit of $65 and a debit to WIP of $65.

The vendor invoice is received for 50 units at $.70 for each unit, resulting in a variance of $0.05 for each unit. This credits the liability account for $2.50 and debits the WIP account for $2.50.

At period-end, backflush costing is run, and in this scenario, the status of products is then considered. •

45 units of unpainted cover left remain unused in the production flow

•

50 units of chrome cover left are still in process in the production flow

•

50 units of chrome cover left have been received as output of the production flow

Backflush costing Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/09-backflush-costing Backflush costing in Dynamics 365 for Finance and Operations can be defined by: •

Allows simplified reporting on material and operation resources, such as reporting consumption on empty bins or else not reporting consumptions and eliminate the need for reporting usage of operation resources.

•

BOM calculation for items produced through production flows

•

Accounts for moving direct material cost to work in progress, for products contributed to production flow, but whose physical flow in the production flow is not reported or maintained in simplified backflush costing journal entries.

•

Cost accounting through substituting the production flow definition for routes.

•

Cost accounts the direct material cost resulting from products, whose physical flow in the production flow is maintained through on-hand inventory (no backflush).

•

Values the production flow output (quantities produced), at the product's standard cost.

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•

Absorbs and applies to production flow's WIP account, the standard conversions costs (direct and indirect manufacturing cost) for the production outputs from a production flow.

•

Allows an end of period backflush costing process, for computing the variances to standard cost for quantities of products produced for the period, and the correction of the financial situation (relatively to the omitted journal entries for the product cycle).

The periodic consolidation of the cost for a production flow or "backflush costing" re-calculates the actual cost of material and products in WIP based on the status of Kanban jobs and handling units in the production flow and determines variances for the products supplied by the production flow.

End of period - backflush costing At the end of a costing period, backflush costing is run for the period for all production flows of the legal entity in the same batch run. When the backflush costing calculation is started, the last date of the backflush costing period must be selected. Backflush costing is run either from the Backflush costing calculation form or as a batch job. Unless the job is started at the end of the manufacturing day, you should always select a day in the past for the job. It is not possible to post transactions to a period (day) where the backflush costing calculation was run. The backflush costing process executes these steps: 1.

Determines the production flow's unused quantities as of the period end date.

Calculates the production flow's net realized usage over the period.

Clears the WIP from the realized resource consumptions and products.

Calculates the production variances to standard cost for each cost group.

After the backflush costing process is run, the unused quantities at the date of the costing run can be viewed from the production flow's WIP display.

Products and material in Work in Progress (WIP) Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/10-products-material-in-wip The reduction of batch sizes down to the ideal state of a single piece flow in Lean manufacturing can cause a significant increase of transactions if each picking process, or Kanban registration, causes transactions for the consumed items. The production flow architecture enables the transfer of material to the production flow with withdrawal Kanbans in storage or transport handling unit sizes. The value of the issued material is added to the WIP account related to the production flow similar to material issued to a production order.

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The same principle can be applied for products and semi-finished products, unless they are created, transferred, or consumed in a production flow, inventory transactions are optional. When the products are posted to inventory, the WIP account to the production flow is deducted by the related standard cost. Periodic backflush costing of the production flow allows calculating the production variances to standard cost for the production flow and period while creating ledger entries to account for unused and inprocess quantities that are still in the production flow at end of period.

Production flow WIP value The current value of WIP can be viewed for a particular production flow in the Current WIP balances form. To view the WIP value for a production flow, use these steps: 1.

Navigate to Production control > Setup > Lean production flow > Production flows.

Select the Calculation > WIP balances menu button.

Calculation of the production flow's net realized usage over a period The net realized usage over the period is calculated per item and item dimensions. The net realized usage is the difference between the total quantities for each item, accumulated over the period in production flow's WIP at standard cost, minus the sum of unused quantities still in the production flow at the period end date, valued at those items standard cost. The WIP still in the production flow corresponds to the item and item dimension quantities on production picking list inventory transaction in a physically updated state for the production flow.

Clearing production flow's work in progress for the period For consumed components for the period, the net realized quantities of material consumed by the production flow over the period are financially updated. These transactions are processed in First in First out (FIFO) order up until reaching the net realized quantities for the period. The inventory transactions are split to allow unused quantities in production flow WIP to remain physically updated. It also allows net realized usage quantities to be "financially updated". For completed production quantities of the period, the inventory transactions for the completed quantities for the period are financially updated. The applied conversion cost transactions recorded for the period are financially updated for all direct manufacturing costs and all indirect costs minus indirect costs that resulted from the unused quantities.

Standard cost Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/12-standard-cost

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Standard cost requirement Production flow activities and resource usage will be cost accounted at standard cost. Therefore, Lean manufacturing activities and resource usage will be cost accounted at standard cost and support full absorption. Full absorption implies that both direct and indirect cost contribute to the inventory value. Standard cost implies that a pre-determined cost is used to value resources (material, operation resource and indirect cost). Variance to standard cost captures the difference arising between the realized cost and the predetermined standard cost. The creation of an item relation between a Kanban rule and a collection of items (a specific item, a group of items or all) for a production flow is restricted to only allow items being held at standard cost. A standard cost must be established for an item prior to the creation and processing of Kanban jobs. For purchased items, this is a simple cost creation. For manufactured items, a BOM calculation must be performed. One exception to the standard cost requirement is for withdrawal Kanbans. Withdrawal Kanbans for nonstandard cost products may be created if the update on-hand pick and receipt are both set to yes. This will allow moving a nonstandard cost product from one inventory location into another, but will not allow movement of a non-standard cost product into or out of WIP.

Standard cost inventory model All products related to the production flow need to be assigned to an inventory model group with inventory model Standard cost. Standard cost is maintained per site and activated as of date. For product masters, it can be selected if the cost is maintained per variant or per product master.

Standard cost for materials A cost group must be set up for purchased material that identifies the material category for costing. The cost group allows an aggregated view on cost, WIP and variances by material category. The standard cost for material is maintained and activated manually.

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Standard cost for finished products The standard cost for products is calculated with the cost calculation based on the BOM and either the production flow and Kanban rules or the route. The use of routes to calculate an item's standard cost is likely to introduce variances for the product produced.

Standard cost for subcontracted services Subcontracted services in Lean manufacturing are by definition non-tangible products of type service. This implies an inventory model group with the stocked product check box cleared. For the cost calculation for output products based on production flow a standard cost needs to be maintained for the services related to subcontracted activities. The cost group assigned to the services is used to determine cost variances of the subcontracted services.

Costing lean manufacturing Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/13-cost-lean-manufacturing

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Cost components for lean manufacturing Costing for Lean manufacturing consists of these types of costs: •

Undefined costs

•

Direct materials costs

•

Direct manufacturing costs (also called labor costs)

•

Indirect costs

•

Outsourcing costs

A costing version, cost categories, cost groups and the costing sheet must be set up prior to calculating the item's cost and activating that into a standard cost which is required to create Kanban rules. The Costing version is the main repository for maintaining costs of all types. Cost groups serve as a classification of element of costs and are the basis for cost breakdown analysis. They are also used to identify the basis for indirect cost calculation. Rules for calculating indirect costs are defined in the Costing sheet. Cost categories are used to define costs and ledger accounts for resources as type work cells. Direct manufacturing costs are applied upon reporting completed quantities of product, using the production flow planned usage of the operation resource at the operation resource standard rate (cost category rate). A cost category needs to be assigned to the run time category of the work cell. The cost categories for setup and quantity are not considered in costing for Lean manufacturing. The WIP accounts per resource group are ignored in backflush costing. For subcontracted activities, no cost category is needed as the cost group assigned to the active service is used instead. Indirect manufacturing costs are applied upon the debiting or crediting of WIP according the costing sheet definition. Production variances on direct manufacturing and indirect manufacturing costs capture the difference between the applied conversion costs for the production flow and the product's standard cost conversion cost.

Applied conversion costs on Lean manufacturing In Lean manufacturing for Dynamics 365 for Finance and Operations, conversion costs are not applied according to the product's standard cost conversion cost. Instead, conversion costs are calculated and applied according to the effective production flow's planned operation resource usage for the product at the standard rate for operating resources. This can result in variances to standard cost on conversion cost, when the standard cost of products is not revised according to the changed to production flow.

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Flattening of BOM during cost calculation for Lean Items When items produced in a production flow are designated as non-inventory controlled by deselecting the Update on hand inventory selection defined for the production flow activity, these items are treated similarly to a phantom component when they are included within a BOM. When one of these components is encountered in a BOM calculation, the system explodes through the item's BOM and lifts the components one level up in the BOM as though they were components of the parent instead of components of the composed item. The setting for Update on hand inventory can significantly change the financial postings; When this flag is unchecked, the items are considered as not inventory controlled.

Calculation of standard cost Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/14-calculate-standard-cost The standard cost for products produced within a production flow is calculated with the cost calculation based on the BOM and either the production flow and Kanban rules or the route. Additionally, the standard cost calculation can be run for a single item or for a group of items. The different settings available for cost calculation are shown in this table: BOM calculation for single or a range of Items

Cost calculation source

Coverage settings

Run for a single item

Planned cost for the product is computed according to the route structure selected.

Not applicable

Run for a single item

Planned cost for the product is computed according to the selected production flow for the chosen calculation date.

Not applicable

BOM calculation is run on a range of items

Planned cost for the product is computed according to the default production flow for the site and product, treating composed components produced in the production flow as phantoms,

Item coverage or default order settings for the site are set

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

BOM calculation for single or a range of Items

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Cost calculation source

Coverage settings

when those are not maintained with an inventory on hand in the production flow.

with planned order type as Kanban.

BOM calculation is run on a range of items

Planned cost for the product is computed according to the active route and BOM.

Item coverage or default order settings for the site are set with planned order type as Production

BOM calculation is run on a range of items

Planned cost for the product is computed according to the route if a valid one can be found. If a valid one cannot be found and a default production flow has been defined for the site and product, the production flow will be used to calculate the cost.

No item coverage and no default order settings are defined.

Calculation based on the Production flow Lean manufacturing for Dynamics 365 for Finance and Operations allows for substitution of production order routes with the production flow definition for the calculation of costs of products manufactured using production flows. The cost calculation for products manufactured through a production flow can be done based on the production flow itself. To be able to perform the cost calculation, a Kanban rule needs to be created that defines how the product is supplied out of the production flow and what activities should be used to calculate the conversion cost. If a product can be supplied out of multiple production flows at the same site at the calculation date, the default production flow can be selected for the BOM calculation. The default production flow can be configured per item in the Default production flow form. If multiple Kanban rules exist for the same product in the product in the same production flow that are active at the calculation date, the calculation picks the first Kanban rule that is active for the calculation. If products can be produced in many different flows and activity variants, it may be useful to create a specific production flow for costing that only includes the activities and Kanban rules needed for costing.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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This also allows different throughput ratios to be set for the calculation than what are applied in the actual production. The default production flow can be named per site on the Default production flow form. The cost calculation will use the default production flow to determine the cost when the cost calculation is run for a range of products and the item coverage setting is set to a Planned order type of Kanban or when there is not a route defined for the item.

Calculation based on the route The calculation based on a route is equally as valid as the calculation based on a production flow. The route should use resource requirements for resource groups and use the same work cells or at least the same cost categories to avoid systematic variances. Again, cost categories for setup and quantity should be avoided. It adds no value to calculate the cost in a more granular breakdown than can be provided by Lean manufacturing cost backflushing.

Choosing the calculation method To determine the better option to calculate the cost of production flow or route, consider the results of the cost breakdown. The version that comes closer to reality and in the end of the day and results in less variances is the better option. In a Lean manufacturing environment where a product is supplied by a single production flow and a single Kanban rule, the calculation is probably more accurate based on the production flow. A product that can be supplied by Lean manufacturing and production orders on the same site or can have multiple production flows or multiple Kanban rules in the same flow might be more accurate to calculate on a route version that is specifically built for the cost calculation, not the production as such. To calculate products with subcontracting, the production flow calculation has to be used. In Finance and Operations, the cost models for subcontracting with production orders and subcontracting in Lean manufacturing are not compatible. Production orders calculate subcontracted services as materials. Lean manufacturing introduces a new Cost group type direct outsourcing for subcontracted services.

Calculate unused quantities Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/15-calculate-unused-quantities

Calculation for unused quantities Backflush costing calculates the unused quantities of materials still in the production flow at the period end date. To accomplish this, equivalent quantities of materials for non-completed products still in process are calculated.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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The calculated material usage is expressed in accordance to the production flow effective at the time and whether on-hand inventory is maintained or not. subassemblies and semi-finished products produced in the production flow and whose physical flow is governed by activities that are not inventory controlled are converted in equivalent quantities of their components. For instance, if product L0002 is produced in a production flow, but activities governing its physical flow are not inventory controlled, then the 20 units of L0002 are needed and are converted in equivalent units of its components. This is to provide a list of equivalent units of products that can match and compare with the products quantities contributions recorded in the production flow work in progress.

Calculation of unused quantities: Released to production In effect, the non-inventory-controlled items are treated as phantoms. The calculated equivalent quantities of materials are corrected according to whether the quantities of components have been released to production. For example, if a component has not yet been effectively released from inventory to the production flow, then its components should not be considered as remaining unused quantities (as those are still in inventory and not in the production flow's WIP). The financial update of inventory transactions for completed quantities reverse the physical ledger postings and repost as financially updated. The inventory transactions receipt status is updated to purchased. The financial update of inventory transactions for consumed products reverses the physical ledger postings and reposts as financially updated and the inventory transactions receipt status is updated to sold. Clearing WIP for the production flow's direct manufacturing conversion costs reverses the physical ledger postings and reposts them as financially updated. The conversion cost transaction is updated to cost accounted. The indirect manufacturing cost, accumulated over the period are all cleared from WIP. The indirect cost for unused materials will need to be reinstated. To reset the indirect manufacturing costs for the unused quantities still in production flow work in progress, which had been cleared from WIP, this occurs: •

Compute the indirect cost for reported unused quantities in the production flow at the period end based on the cost sheet setup.

•

Insert a new conversion cost transaction (of type indirect cost) in the physically updated stage for the calculated indirect cost.

•

Insert a new negative conversion cost transaction (of type indirect cost) for the calculated indirect cost in the financially updated stage.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Calculation of production variances to standard cost Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/16-calculate-production-variances The production variance to standard cost for the production flow is calculated by comparing the production flow's quantities of completed products for the period at their standard cost versus the production flow's realized resource usage to WIP over the period at standard cost. The variances calculated for a production flow are calculated by comparing: •

The aggregate of a production flow's completed quantities whose inventory transactions have been financially updated for the period at the detailed standard cost or according the standard cost roll up when no detailed standard cost exists.

•

The net realized usage over the period calculated by the aggregate of material quantities whose inventory transactions have been financially updated, at their respective standard cost roll up, and the aggregate of conversion cost having been financially updated minus the conversion cost transactions physically updated for the unused materials.

Variances are produced per cost groups and variance types and recorded when the backflush costing calculation is performed. Variances to standard are not booked for manufacturing conversion costs. A change in the value of a standard cost for a product will revalue the inventory and the WIP including the production flow's WIP. Any differences between the new standard and the old standard are booked as a revaluation variance.

Ledger entries created from processing a production flow Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/17-ledger-entries-from-production-flow

Production group The Production groups form can be accessed from Cost management > Ledger integration policies setup > Production groups. The production group associated to the production flow defines the work in progress related ledger accounts. The production group setup is used to resolve the ledger accounts for posting in general ledger posting originating from the production flow for these posting types: •

Ledger - Items

•

Ledger - Resources

•

Ledger - Lean subcontracting

•

Ledger - Indirect

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Inventory posting profile The posting profiles can be accessed from Inventory management > Setup > Posting > Posting. If accounts are not defined for a production group named for the production flow, the system falls back to the posting profile for resolving the ledger accounts for a particular posting type.

Reporting production flow activities The reporting of production flow activities encompasses starting, picking and completing both withdrawal and process Kanbans. This section describes the ledger entries occurring during the posting of materials and resources within a production flow. This table describes typical scenarios and their outcomes in regards to the accounting entries occurring for typical transactions when processing Kanbans. Scenario

Outcome

William reports a Kanban transfer job, recording movements of materials and parts that replenish the production flow and or store its produced goods.

An issue transaction and a receipt transaction are posted, debiting and crediting the inventory cost accounts including labor and indirect costs. No costs are posted to WIP in this scenario

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Scenario

Outcome

Shannon reports a Kanban process job, recording quantities of material picked for an activity.

A credit is posted to the product inventory cost account and a debit is posted to the production flow’s WIP account.

William reports a scan empty transaction, reporting a bin or container as having been emptied. The location type is "Kanban supermarket" for the location being emptied.

A credit is posted to the product's inventory cost account and a debit is posted to the production flow WIP account.

Shannon reports a Kanban job of type process (receipt) recording quantities of the product, resulting from an activity.

A credit is posted to the production flow WIP account and a debit is posted to the product’s inventory cost account.

Update on hand on pick and Update on hand on receipt are not inventory controlled.

No inventory transactions are recorded and the system does not cost account the transaction.

Update on hand on pick is not inventory controlled but Update on hand on receipt is.

Finance and Operations credits the production flow’s WIP cost account and debits product inventory cost account

Update on hand on pick is inventory controlled but Update on hand on receipt is not.

Finance and Operations credits product inventory cost account and debits the production flow’s WIP cost account.

Update on hand on pick and Update on hand on receipt are inventory controlled.

Finance and Operations cost accounts a transfer, crediting destination product inventory cost account and debiting product inventory destination cost account.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Scenario

Outcome

Transaction is cost accounted as picking list and costing sheet is set to apply to production flow.

Finance and Operations invokes the costing sheet for the picking list and computes indirect costs. As a result, the system credits indirect cost absorption cost account and debits production flow work in progress cost account.

Production flow activities use operation resources which have cost categories

Finance and Operations computes, records and posts conversion costs, on the basis of the produced product's standard cost share of direct manufacturing cost per cost category. As a result, system credits the cost category absorption cost account and debits the production flow WIP account.

Emptying Kanban handling units for any other type of location but Kanban supermarket will have no inventory transaction and does not create the transaction. Emptying handling units on Kanbans that are posted to WIP, which is when the Update on hand on receipt is No, will cause backflush costing to consider the material as consumed from WIP. Kanbans that are not empty will be considered as remaining in WIP at backflush costing.

Production flow standard cost transactions As transactions are posted for a production flow, they can be viewed from the Standard cost transactions form. The form can be accessed from Production control > Setup > Lean manufacturing > Production flows and selecting the Costing > Standard cost transactions menu button. Voucher transactions can be viewed for the transactions on this form by selecting the Ledger > Voucher menu button.

Exercise - set up a default vendor and create a purchase agreement Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/18-exercise-set-up-default-vendor-purchaseagreement

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Set up a default vendor for a warehouse 1.

Go to Inventory management > Setup > Inventory breakdown > Warehouses.

In the list, find and select Warehouse 12-801

Verify the Vendor account field is set to US-801

Close the page.

Create a purchase agreement 1.

Go to Procurement and sourcing > Purchase agreements > Purchase agreements.

Click New.

In the Vendor account field, enter or select US-801

In the Purchase agreement classification field, enter or select General purchases

Expand the General section.

In the Expiration date field, enter a date in future which agreements should be expired by.

Click OK.

Expand the Purchase agreement header section.

In the Default commitment field, select Product value commitment.

10. Click Add line. 11. In the Item number field, enter or select L0001 12. In the Warehouse field, enter or select 12-801 13. Set Net amount to '73570.00'. 14. In the Status field, select Effective. 15. Click Save. 16. Close all forms.

Exercise - Create a work cell for subcontracting Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/19-exercise-create-work-cell-forsubcontracting

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Go to Organization administration > Resources > Resources.

Click New.

In the Resource field, type 'GTL-Sub1'.

In the Description field, type 'Subcontractor 1'.

In the Type field, select Vendor.

Click Save.

Close the page.

Go to Organization administration > Resources > Resource groups.

Click New.

10. In the Resource group field, type 'eBookSub'. 11. In the Description field, type 'eBooksubcontractor'. 12. In the Site field, enter or select site 1 13. Select Yes in the Work cell field. 14. In the Input warehouse field, enter or select 11 15. In the Input location field, enter or select 11. 16. In the Output warehouse field, enter or select 12-801 17. In the Output location field, enter or select 801. 18. Click Add. 19. In the Calendar field, enter or select Production. 20. Collapse the Calendars section. 21. Click Add. 22. In the Resource field, enter or select 8821. 23. Collapse the Resources section. 24. Click Add. 25. In the Production flow model field, enter or select Mid-Range Speaker 2 Flow Model. 26. In the Capacity period field, select Standard workday. 27. Set Average throughput quantity to '100.00'. 28. In the Unit field, type 'pcs'. 29. Click Save. 30. Close all forms.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exercise - Create an activity based subcontracting rule Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/20-exercise-create-activity-basedsubcontracting-rule 1.

Go to Production control > Setup > Lean production flow > Production flows.

In the list, find and click the Speaker driver link to get to the details page.

Under Versions section, click Add.

Click OK.

In the list, find and select the new version with status of Draft.

Click Activities.

Click Create new plan activity.

Click Next.

In the Name field, type 'GTL-Subcontracting activity'.

10. Click Next. 11. In the Work cell field, enter or select eBookSub. You are assigning a work cell that is associated with the Vendor. 12. Click Next. 13. Click Next. 14. In the list, find and select the row for the Runtime time type 1 in the Time field. 15. In the Time unit field, enter or select hr. 16. Set Per quantity to '10.00'. 17. Click Next. 18. Click Finish. 19. Click Create new plan activity. 20. Click Next. 21. In the Name field, type 'GTL-Transfer to subcontractor'. 22. In the Activity type field, select Transfer. 23. Click Next. 24. In the Replenishing field, enter or select eBookSub 25. In the Replenished field, enter or select eBookSub. 26. Click Next. 27. Click Next. 28. In the list, find and select the row for the Runtime time type 1 in the Time field. 29. In the Time unit field, enter or select hr.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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30. Set Per quantity to '4.00'. 31. Click Next. 32. Click Finish. 33. In the list, find and select GTL-Subcontracting activity. 34. Click Add successor. 35. In the Activity field, enter or select GTL-Transfer to subcontractor. 36. In the Cycle time ratio field, enter 1. 37. Click OK. 38. Select GTL-Transfer to subcontractor 39. Click Details 40. Expand Service terms FastTab. 41. Click Add. 42. In the Service field select L0001. 43. Click Next. 44. In the Service ratio field type 1.2 45. In the Service unit field select hr. 46. For the Service quantity base field select Activity time. 47. Click Next. 48. Click Finish. 49. Close the Activity details page. 50. Select GTL-Subcontracting activity 51. Click Details 52. Expand Service terms FastTab. 53. Click Add. 54. In the Service field select S0001. 55. Click Next. 56. In the Service ratio field type 1.0 57. In the Service unit field select hr. 58. For the Service quantity base field select Activity time. 59. Click Next. 60. Click Finish. 61. Close the Activity details page. 62. Select GTL-Transfer to subcontractor 63. Click Add successor.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

64. In the Activity field, enter or select Speaker driver. 65. In the Cycle time ratio field, enter 1. 66. Click OK. 67. Close the Activities page. 68. Select version 1 and click Deactivate 69. Select version 2 and click Activate 70. Click OK. 71. Click Save. 72. Close all forms.

Exercise - Create and schedule Kanbans for subcontracting Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/21-exercise-create-and-schedule-kanbans-forsubcontracting 1.

Go to Product information management > Lean manufacturing > Kanban rules.

Click New.

In the First plan activity field, enter or select GTL-Subcontracting activity

Select the Multiple activities check box.

In the Last plan activity field, enter or select GTL-Transfer to subcontractor

In the Product field, type 'L0001'.

Expand the Quantities section.

Set Default quantity to '50.00'.

In the Fixed kanban quantity field, enter '25'.

10. Click Save. 11. Click Add. 12. Click Create. 13. Click Details. 14. Expand the Jobs section. 15. View jobs for process and transfer to a subcontractor 16. Close all forms. 17. Go to Production control > Kanban > Kanban job scheduling. 18. In the Work cell field select eBookSub 19. In the list, mark and select the first two rows. 20. Click Schedule from date to open the drop dialog. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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21. Click Schedule. 22. Close all forms.

Exercise - process and transfer jobs Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/22-exercise-process-and-transfer-jobs 1.

Go to Production control > Kanban > Kanban board for process jobs.

In the Work cell field, enter or select eBookSub

In the list, mark the selected row.

Click Prepare.

Click Start.

Click Complete.

Expand the Transfer jobs section.

In the list, mark the selected row.

Click Start.

10. Click Complete. 11. Close the page.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/23-activity-based-subcontracting-quiz

Configure activity-based subcontracting and production flow costing in Dynamics 365 for Finance and Operations knowledge check 1.

Which one of the following is considered a subcontracted activity? a.

The Freighted by field is set to Carrier and the Replenishing warehouse is managed by the vendor

The Freighted by field is set to Shipper and the Replenishing warehouse is managed by the vendor

The Freighted by is set to Shipper and the Replenished warehouse is managed by the vendor

Which one of the following is considered a subcontracted activity?

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

The Freighted by field is set to Carrier and the Replenishing warehouse is managed by the vendor

The Freighted by field is set to Recipient and the Replenishing warehouse is managed by the vendor

The Freighted by is set to Recipient and the Replenished warehouse is managed by the vendor

Which one of the following options is correct statement for Service terms? a.

You can assign multiple service items to one flow.

You can assign multiple flows to a service item.

You cannot assign multiple service items to one flow.

Summary Link: https://docs.microsoft.com/en-us/learn/modules/configure-activity-based-subcontractingproduction-flow-costing-dynamics-365-finance-ops/24-activity-based-subcontracting-summary Subcontracting is performed using manufacturing Kanbans against process activities within Lean manufacturing for Finance and Operations. Activity Based Subcontracting included set up and configuration of subcontracting activities in production flows, how to use alternate process flows with subcontracting activities, how to use the Kanban board for process jobs for subcontracting activities, subcontracting cost flow scenarios for Finance and Operations. There was an overview of how costs flow to the ledger when processing Kanbans and performing end of period backflush costing in Finance and Operations. Now, you have learned how to plan, and implement against subcontracting Kanban jobs by using the Kanban schedule board, the Kanban board for process jobs, and the Kanban board for transfer jobs. You also learned how to set up costing, execute Kanban jobs and view the transactions flowing to the ledger. Also included was a description of how the end of period backflush job relieves WIP and creates variances for a production flow.

Links to related modules for specific topics Topic

Link

information about purchase agreements

Configure and use agreements

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Topic

Link

information about the procure-topurchase process

Configure and perform the procure-to-purchase process and Process purchase orders .

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Course MB-320T03-A: Configure and use process manufacturing in Dynamics 365 for Finance and Operations Link: https://www.microsoft.com/en-us/learning/course.aspx?cid=MB-320T03 Organizations use Dynamics 365 for Finance and Operations to run smarter with connected operations, by selecting best-fit manufacturing processes, improving operational procedures, simplifying resource management, accelerating product delivery, and increasing quality and customer satisfaction. This course discusses how to configure and use process manufacturing in Dynamics 365 for Finance and Operations.

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Module 1: Get Started with Process Manufacturing This topic explains how to get started with the process manufacturing in Finance and Operations. Lessons •

Introduction

•

Understand process manufacturing

•

Understand formula management

•

Understand co-products and by-products

•

Configure approved vendors

•

Practice labs

•

Module summary

In this module you learned: •

Understand process manufacturing

•

Understand formula management

•

Understand co-products and by-products

•

Understand approved vendors

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Configure process manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-in-dynamics365-finance-ops/ Process manufacturing is associated with formulas and manufacturing recipes, in contrast with discrete manufacturing, which uses discrete units, and bills of materials. Process manufacturing is used in manufacturing environments where production is completed in batch or semi-continuous processes. In this module, you will learn how to: •

Configure process manufacturing.

•

Manage formulas.

•

Create and configure catch weight items.

•

Create co-products and by-products.

•

Configure approved vendors.

Introduction Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/01-configure-process-manufacturing-intro Process manufacturing is the production of goods by combining supplies using a formula or recipe. Production is completed in batch or semi-continuous processes. These manufacturing systems may include batch methods such as mixers, batch reactors, and extruders or semi-continuous methods such as plug-flow reactors, fiber manufacturing, and looms. Production is completed in batches with a standard batch size and may contain an overall yield along with a scrap factor, such as found in chemical reaction manufacturing.

Process manufacturing item types Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/02-item-types Finance and Operations supports multiple item types, including formula, and catch weight

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Formula items

In Finance and Operations, the items that are produced (semi-finished or finished) in process manufacturing are called formula items: •

Formula items are produced from a series of mixing operations, chemical reactions, extraction or other actions that transform raw materials into a final, sellable product.

•

A formula item may be produced with co-products and by-products.

•

The formula item is produced in specific sizes called a batch size and can be tracked with a batch number.

•

Yield will cause the ingredient quantities to differ to achieve the planned output of the formula item.

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Catch weight items There are certain items that when you buy or sell them, you need to weigh them; such as watermelon, meat, or even diamonds. The price will be determined by the weight of the item. This type of item in Finance and Operations are known as Catch weight items. It means that you can buy or sell the items in one unit such as bag, box, pcs, or each. however you measure the price and inventory units of it by a unit that measures weight such as kg or lbs. Catch weight items are defined as a catch weight item at the global level when the product is created. All enterprises that utilize that product must utilize the catch weight functionality.

Catch weight related setup When you enable the CW product check box at the global level and release it into the individual companies, you must perform catch weight setup on the item including the following tasks: •

Create the unit conversion data between the base unit and the catch weight unit.

•

Assign the catch weight unit of measure to the item

•

Enter the Minimum quantity and Maximum quantity fields in the Catch weight field group

•

You must also set the Tracking Dimension Group

•

If you want to track a batch number or a shelf life, a tracking dimension group with the selection if batch active must be selected.

Full or partial visibility The dimension configuration and weight that you set up for a catch weight product determines whether the item uses full or partial visibility. •

Catch weight items that use full visibility - Require that the inventory quantity be known for each catch weight unit. For example, assume shrimps are sold in boxes and the customer requires that each box must have a unique identification and a known weight. In this example, the item number for the boxes of shrimps should be created as a catch weight item that uses full visibility. You create catch weight items that use full visibility if you assign a unique serial number to each catch weight unit.

•

Catch weight items that use partial visibility - Require that the inventory quantity be known for batches of items that use a catch weight unit. For example, assume that a company receives a batch of 100 boxes of shrimps with a nominal weight of 10 kilograms. Because all the boxes belong to the same batch, they all use the same batch number. As each box can vary in weight, the whole batch of boxes is weighed. The number of boxes and their total weight can be registered in a single transaction.

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Production type setup Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/03-production-type-setup You must define the relevant production types in the Production type field in the Engineer section of the Released product details page. The list of different production types includes the following: •

Formula - Defines the materials, ingredients, and outcomes of a specific process in process manufacturing. Together with the corresponding route, the formula defines the whole process in process manufacturing. Formulas are used to plan and produce products in process manufacturing. A formula consists of the ingredients and quantities that are required to produce a specific quantity of a formula item. Depending on the task that you perform, you can access formula functionality from Inventory and warehouse management or Product information management.

•

BOM - Defines the components that are required to produce a product. The components can be raw materials, semi-finished products, or ingredients. In some cases, services can be referenced in a BOM. However, BOMs typically describe the material resources that are required. BOM is not used in process manufacturing.

•

Co-product - Items that are produced along with a Formula item or other Co-products. These products are inherent to the manufacturing process and occur every time the other item is manufactured. The Co-Products have inventory value and are stored in inventory for use in a subsequent production operation or sold for a profit.

•

By-product - Items that are produced along with a Formula item or co-products. These products are inherent to the manufacturing process and cannot be avoided. The By-Products are stored in inventory but typically have no inventory value. They are typically scrapped in the production process or sold for a loss

•

Planning item - Products that are not stocked in inventory but are instead used as a container to house production of multiple co-products that are always produced together.

•

None - If a product does not belong to any of the other types.

Set up packaging and batch attributes Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/04-setup-packaging-and-batch-attributes

Packaging setup for bulk and packed products Items such as nails, bolts, screws and other hardware used in the manufacturing process are known as bulk items. www.dynamicscompanions.com Dynamics Companions

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The packaged products are created to identify and track the availability of the bulk material that is stored in different package sizes in the inventory. The formula for the packed product contains the bulk item as the main ingredient together with packing and labeling materials. To set up the consolidated batch orders functionality (containerized packaging) to link a bulk order with packed orders, you must define the bulk item conversion for all packaged formula items.

Batch attributes setup The purpose of batch attributes is to describe properties of the product and product batches. While batch attributes can differ from batch to batch, depending on factors, such as environmental conditions or the quality of the raw materials used to produce the batch, the same batch attributes are associated to a specific item number. Therefore, these batch attributes are always recorded anytime a new batch of that material is purchased or created for that item. The use and types of batch attributes used can vary widely from one industry to another. Learn more about batch attributes in Identify and configure batch attributes for process manufacturing in Dynamics 365 for Finance and Operations

Batch number group A batch number group allows Finance and Operations to create a batch number automatically for an item based upon specified data such as the date and number sequence ID. This is useful when a batch number is required but a company does not want the number manually entered upon a production receipt transaction.

Shelf life related setup Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/05-shelf-life-related-setup You can also enter shelf life related setup that can be defined under the Item data field group in the Manage inventory section of the product. The shelf life related setup includes setting up the following parameters: •

Shelf advice period in days - Which sets a retest period from the date of manufacture for an item.

•

Shelf life period in days - Which is used for setting the expiration date for batches. It defines the number of days from the manufacturing date, before a product batch expires.

•

Best before period in days Which sets a date before the expiration date where the product should be consumed to get the best quality.

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The purpose of the shelf life related setups is to calculate the expiry date for the batches. The expiry date is considered in reservation and master planning scenarios. It is also used to report on batches about to expire.

Item model group, product compliance, and approved vendors Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/06-item-model-group-product-compliance-approved-vendors

Item model group The item model group must be identified on the released product to specify the reservation and costing methods along with the ability to control batch disposition codes, approved vendors and consolidation requirements. The setup for the item model group was discussed in the Enterprise level setup section.

Product compliance Product compliance is used to track chemical and safety related information for items that are purchased and sold in a company. Examples of products that may require tracking in Finance and Operations include flammable chemicals to include product safety sheets with each shipment, carcinogens to restrict and regulate shipment to specific countries or regions, and other chemicals to track CAS, OSHA or EPA codes as required by local and federal regulations. Product compliance setup must be completed on the released product if safety and PSDS data is to be tracked on the item. The product can be listed as a restricted or regulated product and can have various reporting information (such as CAS number) recorded on the item.

Approved vendors An approved vendor list can be set up on the released product to indicate the vendors that the item can be purchased from. If the item model group requires an approved vendor be used for purchases this is a mandatory setup for the item.

Formulas, formula lines, and formula versions Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/07-formulas-formula-lines-formula-versions A formula defines the materials, ingredients, and outcomes of a specific process in process manufacturing. Along with the corresponding route, the formula defines the whole process in process manufacturing. Formulas are used to plan and produce products in process manufacturing. www.dynamicscompanions.com Dynamics Companions

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To add lines to a formula, the formula must be assigned to at least one formula version. The formula version represents the link between the released product and the formula. A formula version is only valid for production if it is approved by an authorized employee. To use a formula for master planning, it must be linked to an approved and active formula version. A single formula can have multiple formula versions. However, note that any change to the formula lines impacts all versions of the formula. Each formula or planning item can have multiple approved formula and formula versions. Each formula can have different formula lines, co- and by-products, cost definitions, batch size definitions, etc. Of these multiple approved formula versions, there can be multiple active formula versions if the different versions do not overlap in the effective dates, site and/or quantity ranges.

A formula consists of the ingredients and quantities that are required to produce a specific quantity of a formula item. Depending on the task that you perform, you can access formula functionality from Inventory and Warehouse management or Product information management modules in Finance and Operations.

Formulas and formula lines A formula consists of one or more formula lines that identify the ingredients or items that make up the formula. A formula line can contain Bill of materials (BOM) items, formula items, catch-weight items, purchased items, co-products, or by-products. Because many items are used in multiple products, an item can be used in more than one formula.

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An example of a formula is the formula for a chocolate chip cookie. The ingredients for this formula use multiple lines, such as flour, sugar, eggs, butter, and chocolate chips. The formula for the chocolate chip cookie contains ingredients that are likely used in other formulas. While you make the chocolate chip cookies, there might be leftovers, such as crumbs, or some of the cookies might be overbaked or undercooked. These items can be set up as co-products or by-products, depending on the characteristic of the output. Can it be re-used in other processes or be sold (does it represent a value) then co-product. Does it not represent a value or is there a cost associated with disposing of the output (burden cost) then by-product. When you create a formula line, you use the line type to indicate how the system should handle the line when you run master planning and produce batch orders. Each line type gives a different result. The following table describes the line types that you can select. Line type

Description

Item

Select Item when the item is a raw material or a semi-finished item that is picked from inventory or when the item is a service.

Phantom

Select Phantom when you want to explode any lower-level formula items that are contained on formula lines. When you estimate the batch order, and the formula items are exploded, the component items are listed as formula lines on the batch order. Additionally, the corresponding routes are added to the production route. Formula items are exploded by using the current configuration. When you use the Phantom line type, you can handle production and measurement configurations that occur at different formula levels. If you select Phantom for a product on the Engineer FastTab of the Released product details page and then use this product in a formula, the line type of the formula line is changed to Phantom. You can't select Phantom for a catch-weight item, or for items where the production type is Coproduct, By-product, or Planning item.

Pegged supply

Select Pegged supply to create a batch order, production order, kanban, transfer order, or purchase order for the ingredient that is contained on the formula line. The related order is determined based on the default order settings and the production type of the ingredient and is created when you estimate the batch order. The required ingredient quantities are reserved for the batch order. This is often used in Make-To-Order scenarios.

Vendor

Select Vendor if the production process uses a subcontractor, and you want to create a sub-production or purchase order for the subcontractor. The service or work that the subcontractor performs must be created by using a formula item or a service

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Line type

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Description item. You can attach the item to the parent item as a formula line. The route must also contain an operation that is assigned to the subcontractor's operations resource as type vendor. This operation is attached to the formula line by using the Oper. No. field.

Formula versions When you create a new formula, you must first create a formula version before you add the formula line items and their specific characteristics. Every formula must have at least one version. The Approved button on a formula version becomes available only after a version record has been successfully saved. Each formula version record is associated with one or many co-products and by-products that can be produced as you produce the finished product. Many products can be made from the same ingredients in different batch sizes, in multiples, or by using different yields. You can create as many versions of a formula as you require.

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A site is a grouping of business resources, such as warehouses and production facilities, which share transactions and are located at a geographical location. The site entity is mandatory in Finance and Operations as an inventory storage dimension. You can define a formula version without a site, then the related formula can work for all sites and a specific formula or route for an individual site. In the multisite production environment, this feature ensures that an appropriate formula is created, produced and stored at the same site. Production at multiple sites can involve a formula where the formula lines are the same at both sites. Each site would have a formula version for that shared formula where a different yield, formula item (produced item), effectivity dates and formula multiple could be specified. When planning materials and resources in an environment that has multiple production sites, the formula and route versions are selected according to the site, validity dates and quantity specified in the respective versions of the formula and route. To manage multiple active formula versions, use effective date ranges or From quantity fields. Multiple active formula versions can exist only if the date range and From quantity don't overlap. Unlike BOMs, where one BOM is often associated with many BOM versions, only one formula version typically exists per formula. Remember that only one formula version can be activated for the coverage

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dimensions and quantity for a given product. However, many formula versions might exist for other reasons, and you can manually select them when you create a batch order.

Formula features Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/08-formula-features The following is a list of the many unique features that are available on a formula.

Version control As with BOMs, formula version control supports the phasing out of old ingredients so that new ingredients can start to be produced or bought, and to enable the selection of alternative versions, depending on the specific production or planning needs.

Graphical formula The formula designer lets you choose to work with the formula structure in a graphical format, which shows the formula versions available for the selected item along with the co- and by-products for that formula.

Formula size The formula version utilizes a base formula size as the per quantity field on the formula lines. Updating this field updates all the Per quantity fields on the formula Lines

Formula multiples The formula version utilizes the multiples to determine the batch order size allowed for production via master planning or manual batch order. The formula size on the version must meet the multiple requirement.

Yield A yield can be specified on the formula versions which applies a yield factor to all formula lines when a batch order is created for the formula item. The yield is calculated as the (actual output / theoretical output) * 100%.

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Quantity dependent formula versions The From formula size field (on the formula version) can be used for controlling which formula version is to be used in a production. For example, if less than 500 kg of a formula item is ordered, Version 1 is used; when more than 500 kg is ordered, Version 2 with a formula size of 1000 is used.

Total cost allocation This allocates the total cost of production across the co-products and the formula item. For the planning item the entire cost is allocated across the co-products. When selecting this parameter it is mandatory that the co-products with the cost allocation are entered before the formula is approved and activated.

Use for calculation The Use for calculation option determines which formula size to use if there are percent-controlled items to calculate quantity on the formula line.

Plan group Plan groups help substitute items based on a priority. Items associated with the group are interchangeable based on the priority definition.

Step consumption Step consumption functionality helps set up complex (non-linear) consumption rules without the need of setting up multiple BOM/formulas.

Scalable lines Indicates if a formula line is scalable based upon the Formula Size field or other scalable formula lines. If the Formula size field or another scalable formula line quantity is updated all scalable lines will adjust accordingly to maintain the current ratios.

Percentage controlled consumption Allows the definition of formula lines based upon a percentage value instead of a quantity value. The quantity is calculated by Finance and Operations based upon the Per series value.

Approve and activate formulas and formula versions Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/09-approve-activate-formulas-formula-versions

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Formulas and formula versions must be approved before they can be used for planning and production. Formulas are usually activated before they are used. However, during production, you can select a formula version that is approved, but that isn't activated. To help secure a formula or formula version, you can set the Block editing and Block removal of approval parameters on the Production control parameters page. This can be used for customers who wants to track the revision history of their formulas. If you select Block editing and the formula is approved, no fields on the formula lines can be deleted or edited. However, if you remove the approval of the formula, you can delete and modify the formula lines. You can also create new formulas and new formula versions. If you select Block removal of approval you can't remove the approval of an approved formula or formula version. However, you can create new formulas and new formula versions, and you can remove the activation of the formula version. You can add more levels of control by using the electronic signature functionality. When a user is set up so that an electronic signature is required at the time of formula approval a Signature page appears when the formula is activated. The user must be authorized to sign electronically, and the certificate must be successfully validated before the change can be committed. If the signature can't be authenticated, the approval or removal of approval is denied, and the change that initiated the approval or removal of approval is returned to its original state.

Use step consumption Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/10-use-step-consumption Step consumption eliminates the requirement that you must enter a quantity on the Formula line tab for an ingredient. Instead, step consumption is configured so that it has a From series value and a Quantity value. The information from the Step consumption per series record that satisfies the quantity on the batch order is selected. Step consumption is useful when the consumption rate isn't linear with respect to the batch order size and only increases the requirement when a specific quantity threshold is met. To enable this feature for a new formula, under the Consumption calculation group, change the formula setting for the applicable ingredient from Standard to Step. You specify this consumption method on the Setup tab of the Formula line page.

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Catch weight Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/11-catch-weight Catch weight products allow for the tracking of inventory in two units of measure, an inventory unit and a catch weight unit. Catch weight products are commonly used in process manufacturing where the products are handled in containers and each container can vary slightly by weight, therefore two inventory units are required. The product is typically priced by the weight or volume of the product in the container, and not as a standard price per container. For example, chicken breasts are priced by weight, and not by each package of chicken breasts as each package can vary slightly in total weight. Each catch weight item is set up so that the catch weight unit of measure has a specified range of inventory units of measure for the item, for example a 10-pound bag of shrimps is always between 9.8 and 10.2 pounds. The inventory unit is the unit of measurement in which the product is weighed and invoiced, for instance kilogram (kg), while the catch weight unit of measure is the unit of measure in which the inventory transactions are performed such as transfers, picking and shipping, for example the units of box, bag or pallet. An example is in the food industry: •

Poultry - The poultry is counted in inventory as number of packages but when shipped it is sold and priced by weight.

•

Shrimp - Shrimps are counted in inventory by number of bags but when shipped it is sold and priced by weight.

•

Coffee - Coffee beans which are delivered in bags are counted in inventory with a weight recorded for a group of bags, it is also sold and priced per bag but the weight needs to be recorded as well.

There are two methods used to track catch weight items in Finance and Operations; partial visibility and full visibility. Partial visibility Partial visibility catch weight is useful in industries where containers are packaged by machine to a specified weight tolerance, for example coffee beans. The total weight of the boxes manufactured is important, but each bag is within such a tight tolerance that each bag does not need to be tracked. For a catch weight item with partial visibility, one or more units of inventory use the same serial number or batch number. Only the aggregate of the values in the inventory unit is recorded. The values for individual units that share the same batch or serial number do not have to be recorded. As a result, the value in the inventory unit must be entered for each transaction that includes the inventory unit.

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Because each container weight is not tracked, anytime an inventory transaction is completed, such as a transfer or shipment, the number of containers along with the aggregate weight of the containers must be entered into Dynamics for weight tracking. Note that when partial visibility is used, if the full catch weight quantity or dimension is not reserved, a quantity of the minimum catch weight inventory quantity will be reserved for that dimension. The difference between the reserved physical and the nominal on order quantity will be left on order until the actual picking occurs. For an example of partial visibility, let's look at an example where 3 bags of coffee are received into stock, with each piece belonging the same batch number. During product receipt, the number of bags, in this case 3, and the total weight of the three bags are recorded in one transaction. Only the total weight for the 3 bags is recorded, not the individual weight of each bag. Full visibility Full visibility is useful in industries where the specific weight of a container needs to be known at all times and the weight of the container is not expected to change once created, for example bags of shrimps. The bag is produced and packaged, and each bag is weighed and assigned a serial number. This bag is then stored until shipment at which point the exact weight of each bag is invoiced to the customer. A catch weight item with full visibility requires that each unit of inventory be assigned a unique serial number and that the specific weight of the inventory unit is recorded. A unique serial number is associated with the weight of the inventory unit. Full visibility catch weight works best in the following conditions: •

When individual physical units (handling units) need to be tracked by their weight.

•

Finished products that leave the factory or warehouse and do not have to be weighed again like a 10 kg box of frozen chicken drumsticks.

•

When there is a variation in weight between the individual handling units which have an impact on the cost and sales price of those handling units.

•

When the weight is entered once at the process stage, and it is not expected to change.

Catch weight items can be used to: •

Create sales and purchase agreements in catch weight units. This is useful for items where the pricing is per box instead of per weight, such as a boxes of oranges.

•

Create customer orders in a number of boxes/packages where they will pay by weight.

•

Create purchase order in catch weight units - used when ordering items that are priced per container.

•

View net requirements in catch weight units.

•

Create shipment staging in catch weight units.

•

Create picking lists in catch weight units.

•

View on-hand inventory in catch weight units.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create formula lines in catch weight units, when the entire container is used for a formula line.

Scenario: In fish processing the fresh caught fish are purchased directly from the fisherman based upon the bulk quantity of the fish caught in that trip. This quantity is then processed and packaged into individual containers where each container is between 20.0 - 22.0 pounds. Each container is weighed, and the weight is recorded for that specific container serial number. These containers are then shipped to customers when they place an order for fish. In Finance and Operations this process will be modeled using full visibility catch weight item for the packaged fish. The formula for the packaged fish will contain the bulk fish ingredient, ice and the packaging materials. Upon the report as finished action of each box of fish, the user measures the weight for each box and then generates the serial number for the package. When a sales order was entered the quantity on the sales order would be in number of containers and the standard pounds per container. The reservation process would reserve containers of fish and calculate a total weight reserved.

Transaction adjustments Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/12-transaction-adjustments Because the weight of inventory when it comes into a warehouse can differ from the weight when the inventory is issued out of the warehouse, the catch weight product processing must adjust the inventory. Example 1 During production, the Report as finished quantity is packed on a pallet. The total weight of the finished goods reported to the pallet is measured as 80.1 kg. The pallet is put away to a storing location and during the storage period the finished goods on the pallet loses weight due to evaporation. Later, as part of a sales order picking process, the weight of the same license plate is captured as 79.8 kg. The pallet is later picked for a sales order and as part of this process weighed on a scale. The difference in weight between Reporting as finished status and sales picking, is automatically adjusted by the system as an inventory difference. In this case, the system automatically adjusts the difference by posting a transaction for the missing 0.3 kg. Example 2 A catch weight item with a catch weight unit of boxes and an inventory unit of kilos has a minimum quantity of 8 and a maximum quantity of 10. The target quantity is 10. The item is set up to be tracked as a Partial visibility catch weight item

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You have two boxes of the product, and they have a registered weight of 16 kg. If a warehouse worker picks and weighs one of the boxes, and the weight is captured as 9 kg, the remaining box will weigh 7 kg. However, because 7 kg is below the minimum weight, the system does an automatic adjustment to increase the weight of the on-hand inventory by 1 kg. To set up the accounts that these adjustments are posted to, go to Cost management > Ledger integration policies setup > Posting. Then, on the Inventory tab, define the following accounts: •

Catch weight loss account

•

Catch weight profit account

Catch weight item handling policy Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/13-catch-weight-item-handling-policy The catch weight item handling policy defines two primary warehouse management flows for the items: when the weight of the items is captured, and how it's captured. You can define when the weight is captured for sales and transfer order processing. The weight can be captured during either of the following processes: •

Picking - The weight is captured during the initial pick work lines of order work.

•

Packing - The weight is captured during manual packing. (You must send the items to a packing station.)

If the actual weight is captured at the packing station during the container packing processes, warehouse workers won't be prompted to capture the weight during picking work. Instead, the average weight of the physical inventory will be used as the weight of the picked inventory that goes to the packing area. For internal warehouse management processes like counting and adjustment corrections it is possible to define if the weight should be captured or not. If not captured the nominal weight will be used. You can also define how the weight is captured. In one of the two main flows, catch weight tags are tracked and used to capture the weight. In the other flow, catch weight tags aren't tracked. •

Yes - The item uses catch weight tags. Each tag number represents one catch weight unit (box), and a weight and other information are associated with the tag. For outbound processes, the weight that is associated with the tag is used.

•

No - The item doesn't use catch weight tags. The inbound and outbound weighing processes are based on the actual weight that is captured during each process.

The process of tracking catch weight tags can be used for items that won't change weight during the storage period. The weight will be captured only during the inbound warehouse process. During the outbound process, the catch weight tags will just be scanned, and the weights that are associated with the tags will be used for the outbound transactional processing.

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How to capture catch weight When catch weight tag tracking is used, a tag must always be created for every catch weigh unit that is received, and every tag must always be associated with a weight. For example, Box is the catch weight unit, and you receive one pallet of eight boxes. In this case, eight unique catch weight tags must be created, and a weight must be associated with each tag. Depending on the inbound catch weight tag, either the weight of all eight boxes can be captured, and the average weight can then be distributed to each box, or a unique weight can be captured for each box. When catch weight tag tracking isn't used, the weight can be captured for each dimension set (for example, for each license plate and tracking dimension). Alternatively, the weight can be captured based on an aggregated level, such as five license plates (pallets). For the methods for capturing outbound weight, you can define whether the weighing is done for each catch weight unit (that is, per box), or whether the weight is captured based on the quantity that will be picked (for example, three boxes). Note that for the production line picking process, the average weight will be used if the Not captured option is used.

Supported scenarios Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/14-supported-scenarios Not all workflows support catch weight product processing with warehouse management. The following restrictions apply.

Consideration of scenarios that do not support catch weight products for warehouse management processes •

For catch weight products, the storage dimension group for items can't be changed (so that warehouse management processes can be used for them).

•

Catch weight items can only be created for formula items.

•

Catch weight products can't be associated with a tracking dimension group where the dimension owner is an active.

•

It is not possible to create a catch weight item for a product of the Service type.

•

Catch weight products must be stocked products by assigning it to an item model group with Stocked product check box selected.

•

Catch weight products can't be used together with the functionality for registering serials before consumption.

•

Catch weight products that are variant enabled can't be used together with the functionality for converting variant units of measure.

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•

Catch weight products can't be marked as a retail "product kit."

•

Catch weight products can be used only with a unit sequence group that has catch weight handling units, and that has the catch weight unit as the lowest sequence.

•

For catch weight products, the inventory unit can be converted to the catch weight unit only if the conversion produces a nominal quantity that is more than 1.

•

The setup of bar codes for catch weight products doesn't support a variable weight setup.

Order processing •

Intercompany order processing for catch weight products isn't supported unless the proper unit conversion and catch weight units are compatible between the two legal entity in the intercompany trade.

•

The creation of advance ship notice (ASN/packing structures) doesn't support weight information.

•

The order quantity must be maintained based on the catch weight unit.

Inbound warehouse processing •

Receiving license plates requires that weights be assigned during registration, because weight information isn't supported as part of the advance ship notice. When catch weight tag processes are used, the tag number must be manually assigned per catch weight unit.

•

Receiving mixed license plates isn't supports for catch weight products.

Inventory and warehouse operations •

Manual creation of quarantine orders isn't supported for catch weight products.

•

Manual movement of inventory that is related to work isn't supported for catch weight products.

•

Consolidation of license plates isn't supported for catch weight products.

•

Changes to warehouse inventory status as part of a periodic task aren't supported for catch weight products.

•

Changes to inventory status that are defined by a query aren't supported for catch weight products. (Changes to quality order inventory status aren't supported either.)

•

For catch weight products, the inventory status can't be changed from the On-hand by location page.

•

For catch weight products, the inventory status can't be changed as part of warehouse app movement work.

•

License plate loading to initialize warehouse stock isn't supported products.

•

Handling of negative physical inventory isn't supported for catch weight products.

•

Inventory marking can't be used for catch weight products.

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Outbound warehouse processing •

The functionality for cluster picking isn't supported for catch weight products.

•

Pick and pack warehouse processing isn't supported for catch weight products.

•

For catch weight products, work can't be completed from the Work page.

•

For catch weight products, work that is defined in a work template can be run automatically.

•

The functionality for reversing work isn't supported for catch weight products.

•

For catch weight products, manual packing station processing where work is created after containers are closed isn't supported.

•

The functionality for pcs-by-pcs scanning isn't supported for catch weight products.

Production processing •

For catch weight products, only batch orders for formula products are supported.

•

Kanban functionality isn't supported for catch weight products.

•

For catch weight products, serial numbers can't be registered before consumption.

•

The functionality for reversing license plates isn't supported for catch weight products.

•

For catch weight products, reporting as finished can be registered by serial number.

Transportation management processing •

Load building workbench processing isn't supported for catch weight products.

•

Transport request lines aren't supported for catch weight products.

Other restrictions and behaviors for catch weight product processing with warehouse management •

When catch weight tags are captured as part of warehouse app processing, the user can't cancel out of the workflow.

•

During picking processes where the user isn't prompted to identify tracking dimensions, the weight assignment is done based on the average weight. This behavior occurs when, for example, a combination of tracking dimensions is used in the same location and, after a user processes picking, only one tracking dimension value is left in the location.

•

When inventory is reserved for a catch weight product that is configured for warehouse management processes, the reservation is done based on the minimum weight that is defined, even if this quantity is the on-hand last handling quantity. This behavior differs from the behavior for items that aren't configured for warehouse management processes.

•

Processes that use the weight as part of capacity calculations (wave thresholds, work maximum breaks, container maximums, location load capacities, and so on) don't use the actual weight of the inventory. Instead, the processes are based on the physical handling weight that is defined for the product.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In general, retail functionality isn't supported for catch weight products.

Catch weight tags Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/15-catch-weight-tags The functionality for catch weight tags is supported as part of the following scenarios: •

When processing purchase order warehouse app receiving.

•

When processing load receiving via warehouse app.

•

For license plate receiving that is related to a purchase order load, weight assignment is requested during the receiving process. By contrast, for transfer order receiving, the weight from the shipment data for the transfer order is used.

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For transfer order item and line receiving that comes from a non-warehouse management process warehouse.

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The processing of sales return order receiving can record catch weight tags, but the processing won't be validated if the tags are the same tags that were originally shipped for a sales order line.

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When processing an inventory status changed by using the warehouse app.

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When a warehouse transfer is done by using the warehouse app.

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When processing adjustment in and out via the warehouse app.

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When picking work is processed for sales and transfer orders. (Note that catch weight tags can't be recorded for production component picking.)

•

When picked quantities are reduced from load lines, regardless of whether containers are used.

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When products are packed into containers at a packing station.

•

When containers are reopened.

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When formula products are reported as finished by using the warehouse app.

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When transport loads are processed by using the warehouse app.

Co-products Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/16-co-products Co-Products are items that are produced along with a formula item or other co-Products. These products are inherent to the manufacturing process and occur every time the other item is manufactured. The coProducts have inventory value and are stored in inventory for use in a subsequent production operation or sold for a profit.

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These co-products are specified in the formula with a quantity created per batch size of the formula item or planning item. A cost allocation can be specified manually at the co-product item level or by using a total-cost allocation method where the costs are allocated proportionally based on quantities of the formula item and the quantities of the other co-products. Example 1 In the production of 2x4 wood boards, a large plank of wood is ripped from a plank into one 2x4 board. During this production, the ripped ends of the board are stocked and used in a later production process to make wood chips. The Formula item in this example is the 2x4 wood board, while the ripped wood ends are co-products that are stocked with inventory value and consumed later to make the wood chips. The ripped ends are allocated some of the costs of the production of the 2x4 board to give cost to the wood chips that are later produced. Example 2 In the production of extruded aluminum parts, a raw aluminum billet is placed in the extruder and using high heat and a hydraulic ram the billet is pushed through a dye to yield a profile for the extrusion. This long-extruded piece is then chopped at a specific length to yield a sellable extrusion piece. As part of this manufacturing process, excess aluminum that does not make it through the dye (drop-off or slough) is collected, weighed and then sold back to the aluminum billet supplier to be blended with new aluminum to produce more aluminum billets. The extruded piece is typically stocked in feet and the aluminum drop-off is stocked in pounds. The aluminum drop-off that is created is allocated some of the cost of the production order and can vary in quantity produced based upon each production run. For this example the extruded piece is the formula item the company is intending to make and the dropoff is the inherent co-product to the process that the company stocks and then sells back to the aluminum supplier. We will be modeling this example in Finance and Operations using a formula that consumes the billet to produce the extrusion and has a co-product of the drop-off that is allocated 15% of the manufacturing cost.

Using total cost allocation (TCA) for co-products Here are some of the guidelines for using TCA for co-products: â&#x20AC;˘

If you set the Total Cost Allocation slider to Yes for a formula version, co-products must have a cost price that is more than 0 (zero). The value can be retrieved from the active cost version for the same site, or for the first site for a formula that isn't site-specific. This condition is validated when the formula is approved. o

You don't need to manually enter cost allocation percentages for co-products. Instead, the system automatically creates the cost allocation percentage as the average of active cost prices of co-products.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

You don't need to enter standard cost for non-standard cost items that are co-products. There are two types of costing versions in the system: standard cost and planned cost

If an item isn't valuated by the standard cost valuation method, we recommend you use an active cost price in the planned cost version. This price is used for cost estimation, for example, BOM calculation, production cost estimation, and fallback price in the inventory valuation process.

If you set the Total Cost Allocation slider to Yes for the formula version and the following conditions are true, the method of cost allocation is TCA, and the percentage of cost allocation is unchanged: o

•

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

You added co-products.

You used a different method of cost allocation for the co-products.

You added co-products.

If you set the Total Cost Allocation slider to No for the formula version and the following conditions are true, the method of cost allocation is changed to Manual, and the percentage of cost allocation is unchanged: o

The percentage of cost allocation is more than 0 (zero).

•

Before you can successfully perform a formula calculation, you must estimate the percentages of cost allocation. You can complete this step either manually or by using the Estimate cost option on the Co-products page. Note: The Estimate cost option is available only when the Total Cost Allocation slider is set to Yes for the formula version. You can view the expected allocation if the batch order quantities that are reported as finished match quantities that appear on the formula.

•

When a batch order is created manually or a planned batch order is firmed, the value of the Total Cost Allocation slider for the formula version is copied to the batch order. However, you can change this setting on the batch order. If the Total Cost Allocation slider is set to No for the formula version and then changed to Yes for the batch order, the method of cost allocation for each line that was set to Manual is changed to TCA. A cost allocation of None is unchanged. If the Total Cost Allocation slider is set to Yes for the formula version and then changed to No for the batch order, the method of cost allocation for each co-product of the Production type is changed to Manual. Any estimated percentage of cost allocation is unchanged.

•

The Co-product cost allocation page shows the calculated cost allocation percentage. You can open this page from the Batch order page. This information is useful when the products and quantities that are reported differ from the scheduled or started quantities on the batch order. When the cost is complete, these new percentage allocations from TCA are shown on the Coproduct cost allocation page.

By-products Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/17-by-products

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By-Products are items that are produced along with a formula item or co-products. These products are inherent to the manufacturing process and cannot be avoided. The by-Products are stored in inventory but typically have no inventory value. They are typically scrapped in the production process or sold for a loss. By-Products can also be used as a recycled material for future production processes if they are stored with an inventory value at standard cost. The by-Product is used to add costs burden to the production order to account for scraping the product including some of the costs of disposal of the materials. This cost burden is allocated to the formula item through the by-product manually in the bormula.

Example In the production of gasoline from sand oil, a by-product of coke is produced. The coke obtained from sand oil refining is too high in sulfur and has too fine of a particle to be used in iron and other industrial applications that oil refining coke can be used in. This product must be disposed of by the refinery through an environmentally friendly method which can be costly. This by-product can be given a cost burden to include in the production formula of the gasoline to accommodate for that disposal of the material.

Burden allocation Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/18-burden-allocation There are five methods of burden allocation when adding a by-product to a formula version. The burden allocation methods are: •

Percent - The percent burden allocation method allows the user to specify a percentage value of the total cost of the production order to include as a burden rate for the by-product. This rate increases the cost of the batch order by the burden percentage specified on the by-product.

•

Per series - The per series burden allocation method is a fixed burden amount based upon the per series of the by-product line, regardless of the actual amount of by-product produced on the batch order. The burden is scaled up or down based upon the ratio of the batch order quantity to the per series on the by-product line. So if the burden is set to $100 per 1000 and a batch order for 2500 is create the burden for the by-product on the batch order would be set to $250.

•

None- This is used when no burden is allocated to the by-product line

•

Per quantity - The per quantity burden rate is applied to the by-product based upon the quantity of by-product produced on the batch order. On the formula by-product line the rate is set as a value per quantity on the line and this amount is then scaled up or down based upon the ratio of material actually reported as finished on the batch order and the quantity on the by-product formula line. For example is the burden rate is set as $50 per 500 produced, and 1000 is produced on a batch order, a burden of $100 will be applied to the batch order.

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â&#x20AC;˘

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Recycled - The recycled burden is applied at the standard cost of the by-product but is not counted twice in the cost calculation of the batch order. To use the recycle burden, the byproduct must be set at standard cost and have an active cost amount. The by-product must also be included as a formula line in the formula to be consumed as a recycled item.

To use the burden allocation, the burden cost category must be set up in the Production control parameters.

Planning Items Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/19-planning-items Planning items are products that are not stocked in inventory but are instead used as a container to house production of multiple co-products that are always produced together. The planning item is used to identify the formula used for production, the materials consumed in the manufacturing process and the route times needed for manufacturing of the co-products. A planning item formula always has more than one co-product and all the costs are allocated to the co-products that are produced. The batch order is created in the planning item number, and the outputs of the batch order are the co-products, never the planning item itself.

Example 1 In the manufacturing of cut metal parts, a single sheet of metal can produce multiple cut pieces with one manufacturing process. In this process a sheet of metal is placed on a laser cutter and a program is run to manufacture the parts. The output of the process is multiple individual piece parts that can all be considered co-products. A planning item can be used to plan, schedule, consume materials and release production for a single order and have the output be many individual pieces. The formula is associated to the planning item to identify the individual components needed along with the co-products that are output in the process.

Example 2 In plastic molding manufacturing, a plastic powder is heated under pressure in a mold or dye to create various shapes of molded plastic materials. The mold can make one or many different molded parts depending upon the design of the mold dye. In some of these processes a single dye can manufacturing 3 or 4 different individual plastic parts. These parts can never be manufactured independently of each other since the entire dye must be used to make even one of the parts. For the operators running the machine, the information that is important for them is to know the dye number and the raw material plastic part number to use for creating the molded parts. When the parts are removed from the dye, they are trimmed, and the trimmed pieces are scrapped. These plastic trimmings are a by-product of the process as it is inherent to the process and is not useable in later production.

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For this example, the mold will be created as a planning item and the individual piece parts that the dye makes will be created as co-products. The formula with the raw plastic will be created against the mold part and the molded plastic piece co-products will be added to that formula with each co-product having the cost allocation created manually. The formula will be marked as allowing co-product variation in the event that a part cannot be used and must be inventoried as re-grind (a process where discrepant parts are re-ground into raw plastic for re-use in the process). The plastic trimmings by-product will also be added to the formula with a 4% burden rate. Let's investigate the difference between a planning and formula item further.

Formula item A formula item is a primary output of a formula and realized into inventory during report as finished in the batch order processing. For formula items, production cost is allocated the formula item but can also be allocated across the formula item and the co-products and by-products assigned to the formula.

Planning Item Planning items are not realized into inventory during report as finished action in the batch order processing. It acts as a placeholder to create a formula which produces only co-products without a primary formula item. Production cost cannot be allocated to a planning item, these are allocated completely to the co-products that are assigned to the formula.

Configure approved vendors Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/20-configure-approved-vendors Approved vendor lists (AVL) allow for the placement of limitations on an item to specify which vendors the item may be purchased from. This ensures that the purchasing transactions are always performed only on the approved list. During the setup of the item model group a default vendor check is specified within the item model group, but this can be changed on the item level. At the product level the vendor check method can be modified to dictate how restrictive the control for the approved vendor list is for that specific item. The options in the vendor check method are: •

No check - Any vendor can be used whether the vendor is on the AVL or not

•

Warning only - When a vendor is used that is not on the AVL, the user will get a warning, but the transaction will save

•

Not allowed - When a vendor is used that is not on the AVL, the user will get an error message and the transaction will not save

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

When an item is added to a purchase document line, Finance and Operations completes a check on the item to determine if a Warning or Not allowed approved vendor check method is required on the item. If either Warning or Not allowed is set on the item, a review of the approved vendor list for the item to find the vendor on the purchase document is completed. The dates on the AVL are then validated to verify the vendor is approved for the date of the purchase document. If the vendor is not approved and the Vendor check message is set to warning, a message will display stating the specified vendor is not authorized for the item, but a purchase order is created. If the AVL check method is set to Not allowed, the purchase order line will not be created, and the user must change the approved vendor setting or change vendors on the PO. The validation of the item and vendor relationship setup on the approved vendor list is validated upon entry of the item into: •

Purchase order

•

Purchase agreements

•

Purchase requisitions

•

Request for quote (RFQ)responses - When you receive a reply from vendors for a quotation, the purchase price quoted by the vendor is entered into the Request for quotation reply page and accepted. While accepting the purchase quotation, the approved vendor list for the item is validated with the vendor with whom the RFQ response is placed.

Exercise - Create approved vendor list Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/21-exercise-create-approved-vendor-list In company USP2 it has been determined that approved vendor control shall be placed on item M7001, with the approved vendor being US-113. Create the approved vendor list (AVL) for the item and set the Vendor check method to Warning.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'M7001'.

On the Action Pane, click Purchase.

Click Setup.

Click Add.

In the Vendor field, type 'US-113'.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Click Save.

Close the page.

Click Edit.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

10. In the Approved vendor check method field, select Warning Only. 11. Click Save. 12. Close the page.

Exercise - Create and use a partial visibility catch weight item Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/22-exercise-create-use-partial-visibility-catch-weight-item In company USP2 a new catch weight item for sugar in 20 lb. bags is to be created as item M7010. Create the new released product as a partial visibility catch weight item. After creation of the item, a new purchase order for 15 bags shall be created and the bags are to be received using the arrival overview process while specifying the total weight for the 15 bags of sugar.

Create the released product and set catch weight conversions 1.

Go to Product information management > Products > Released products.

Click New.

In the Product number field, type 'M7010'.

In the Product name field, type 'Sugar in 20 lb. bags'.

Select Yes in the Catch weight field.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

10. In the Inventory unit field, type 'lb'. 11. In the Purchase unit field, type 'lb'. 12. In the Sales unit field, type 'lb'. 13. In the BOM unit field, type 'lb'. 14. Click OK. 15. Click Unit conversions. 16. Click the Inter-class conversions tab. 17. Click New to open the drop dialog.

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18. Set Factor to '20'. 19. In the To unit field, type 'lb'. 20. In the From unit field, type 'bag'. 21. Click OK. 22. Close the page. 23. In the Purchase Unit field, type 'bag'. 24. In the Price field, enter a number. 25. In the CW unit field, type 'bag'. 26. Set Minimum quantity to '19'. 27. Set Maximum quantity to '21'. 28. Click Save. 29. Close the page.

Create purchase order for 15 bags of M7010 1.

Go to Procurement and sourcing > Purchase orders > All purchase orders.

Click New.

In the Vendor account field, enter or select a value.

Click OK.

In the Item number field, type 'm7010'.

Set CW quantity to '15'.

On the Action Pane, click Purchase.

Click Confirm.

Close the page.

Create and post arrival journal for Purchase Order 1.

Go to Inventory management > Inbound orders > Arrival overview.

In the Arrival overview profile name field, enter or select a value.

Expand the Arrival query details section.

Select No in the Production orders field.

Select No in the Transfer orders field.

Select No in the Quarantine orders field.

Click Update.

In the list, find and select the desired record.

Select the Select for arrival check box.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

10. Click Start arrival. 11. Click Journals. 12. In the list, find and select the desired record. 13. Click Journals. 14. Click Show arrivals from lines. 15. Click the Dimension tab. 16. Click Edit. 17. Click to follow the link in the Batch number field. 18. Click New. 19. In the Batch number field, type a value. 20. In the Manufacturing date field, enter a date. 21. In the Expiration date field, enter a date. 22. Click Save. 23. Close the page. 24. In the Batch number field, enter or select a value. 25. Set Quantity to '295'. 26. Click Save. 27. Click Post. 28. Click OK. 29. Post Product Receipt and review Inventory 30. Click Functions. 31. Click Product receipt. 32. In the Product receipt field, type a value. 33. Click OK.

Exercise - Use catch weight items Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/23-exercise-use-catch-weight-items In company USP2, item number M9401 for Cheese requires a new purchase trade agreement to be set up for $175/tray. A new demand forecast shall be entered for 25 trays of cheese to be sold. After entering the trade agreement and demand forecast a new purchase order for 15 trays shall be entered and confirmed. Master planning shall then be run and reviewed to determine if additional trays shall be purchased.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create a purchase trade agreement 1.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'm9401'.

On the Action Pane, click Purchase.

Click Create trade agreements.

Click Edit.

In the Name field, enter or select a value.

Click Lines.

In the Item relation field, type 'M9401'.

In the Site field, type '1'.

10. In the Warehouse field, type '11'. 11. Set Amount in currency to '175'. 12. Click Post. 13. Click OK. 14. Close the page.

Create a demand forecast 1.

On the Action Pane, click Plan.

Click Demand forecast.

Click New.

In the Model field, enter or select a value.

In the Date field, enter a date.

In the Site field, type '1'.

In the Warehouse field, type '11'.

Set CW quantity to '25'.

Click Save.

10. Close the page.

Create a purchase order for 15 trays of M9401 1.

Go to Procurement and sourcing > Purchase orders > All purchase orders.

Click New.

In the Vendor account field, enter or select a value.

Click OK.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

In the Item number field, type 'm9401'.

Set CW quantity to '15'.

Click Confirm.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Run net requirements and review output 1.

Click Product and supply.

Click Net requirements.

Click Update.

Click Master planning.

Click OK.

Exercise - Create co-products and by-products Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/24-exercise-create-co-products-and-by-products Contoso process company (USPI) has purchased a small oil refinery and will start to manufacture gasoline from a stream of crude oil. In this process the co-products of Kerosene and Diesel fuel are also produced. A by-product of wastewater is also created. As the product designer you have been asked to create the following items in Finance and Operations: •

Product Number: P15000 o

•

Product Name: Gasoline

Production Type: Formula

Product Name: Kerosene

Product Number: P16000 o

Production Type: Co-Product

Product Name: Diesel Fuel

Product Number: P17000 o

Production Type: Co-Product

Product Name: Waste Water

Product Number: B18000 o

Production Type: By-Product

Product Name: Crude Oil

Product Number: M12000 o

Production Type: None

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Create a new formula product 1.

Go to Product information management>Products>Released products.

Click New.

In the Product number field, type 'P15000'.

In the Product name field, type 'Gasoline'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

In the Inventory unit field, type 'gal'.

10. In the Purchase unit field, type 'gal'. 11. In the Sales unit field, type 'gal'. 12. In the BOM unit field, type 'gal'. 13. Click OK. 14. In the Production type field, select 'Formula'. 15. Click Save. 16. Close the page.

Create the new co-products 1.

Click New.

In the Product number field, type 'P16000'.

In the Product name field, type 'Kerosene'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

In the Inventory unit field, type 'gal'.

In the Purchase unit field, type 'gal'.

10. In the Sales unit field, type 'gal'. 11. In the BOM unit field, type 'gal'. 12. Click OK. 13. In the Production type field, select 'Co-product'. 14. In the Planning formula field, enter P15000

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15. Click Save. 16. Close the page. 17. Click New. 18. In the Product number field, type 'P17000'. 19. In the Product name field, type 'Diesel Fuel'. 20. In the Item model group field, enter or select a value. 21. In the Item group field, enter or select a value. 22. In the Storage dimension group field, enter or select a value. 23. In the Tracking dimension group field, enter or select a value. 24. In the Inventory unit field, type 'gal'. 25. In the Purchase unit field, type 'gal'. 26. In the Sales unit field, type 'gal'. 27. In the BOM unit field, type 'gal'. 28. Click OK. 29. In the Production type field, select 'Co-product'. 30. In the Planning formula field, enter P15000 31. Click Save. 32. Close the page.

Create the new by-products 1.

Click New.

In the Product number field, type 'B18000'.

In the Product name field, type 'Waste Water'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

In the Inventory unit field, type 'gal'.

In the Purchase unit field, type 'gal'.

10. In the Sales unit field, type 'gal'. 11. In the BOM unit field, type 'gal'. 12. Click OK. 13. In the Production type field, select 'By-product'. 14. Click Save.

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15. Close the page.

Create the new raw material 1.

Click New.

In the Product number field, type 'M12000'.

In the Product name field, type 'Crude Oil'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

In the Inventory unit field, type 'gal'.

In the Purchase unit field, type 'gal'.

10. In the Sales unit field, type 'gal'. 11. In the BOM unit field, type 'gal'. 12. Click OK. 13. In the Production type field, select 'None'. 14. Click Save. 15. Close all pages.

Exercise - Create a new formula with a version from the Released products page Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/25-exercise-create-new-formula-with-version-from-released-products The marketing department at Contoso orange juice factory has determined the need for production of a new product for Frozen apple juice concentrate. As the product designer you are asked to create a formula version with the following details. •

Product Number: P7100

•

Product Name: Frozen Apple Juice Concentrate

•

Formula Size: 1000 gal

•

Formula Line: M9103 (Apples), QTY 800

•

Formula Line: M8001 (Ascorbic Acid), QTY 660

•

Formula Line: M8003 (Vitamin A), QTY 40

•

Formula Line: M8004 (Vitamin C), QTY 18

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

Formula Line: M7003 (Sucrose), QTY 33

•

Formula Line: M8008 (Can), QTY 2400

•

Approved by: Glen John

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create a new product 1.

In the USP2 company go to Product information management>Products>Released products

Click New.

In the Product number field, type 'P7100'.

In the Product name field, type 'Frozen Apple Juice Concentrate'.

In the Search name field, type 'FrozenAppleJuice'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

10. In the Inventory unit field, enter lb 11. In the Purchase unit field, type 'lb'. 12. In the Sales unit field, type 'lb'. 13. In the BOM unit field, type 'lb'. 14. Click OK. 15. In the Production type field, select 'Formula'. 16. Click Save.

Create a formula with the description 'For making Frozen Apple Juice Concentrate' 1.

Click Formula versions.

Click New.

Click Formula and formula version.

In the Formula number field, type 'FOR-7100'.

In the Name field, type 'For making Frozen Apple Juice Concentrate'.

In the Site field, enter or select 1.

Click OK.

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Create formula lines to enter the ingredients with quantities and relevant units of measurement 1.

In the Lines or header field, select 'Header'.

Set Formula size to '1000'.

Set From formula size to '1000'.

In the Lines or header field, select 'Lines'.

In the Item number field, type 'M9103'.

Set Quantity to '800'.

Click New.

In the Item number field, type 'M8001'.

Set Quantity to '660'.

10. Click New. 11. In the Item number field, type 'M8003'. 12. Set Quantity to '40'. 13. Click New. 14. In the Item number field, type 'M8004'. 15. Set Quantity to '18'. 16. Click New. 17. In the Item number field, type 'M7003'. 18. Set Quantity to '33'. 19. Click New. 20. In the Item number field, type 'M8008'. 21. Set Quantity to '2400'. 22. Click Save.

Approve and activate the formula 1.

Click Approve formula.

In the Approved by field, enter or select a value.

Click OK.

In the Lines or header field, select 'Header'.

Click Approve in the versions section.

In the Approved by field, enter or select a value.

Click OK.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Click Activate.

Close the page.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exercise - Copy and modify formula versions Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/26-exercise-copy-and-modify-formula-versions Analysis of the production orders for P8000 in company USP2 have shown that the scrap factors and consumption amount of part P6000 need to be updated. The formula is to be revised, updated and approved/activated with an effective date of 12/15/2016.

Copy the existing formula for P8000 1.

Go to Product information management>Products>Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P8000'.

In the list, click the link in the selected row.

Click Formula versions.

Click New.

Click Formula and formula version.

In the Formula number field, type F01.

In the Name field, type V01.

Set the Copy to Yes

10. In the Site field, enter or select 1. 11. Click OK. 12. In the Formula version field, select the previous formula version. 13. Click OK.

Update line for P6000 1.

In the list, find and select the record for P6000.

Set Quantity to '0.35'.

Click the Setup tab.

In the Variable scrap field, enter a number.

Click Save.

Close the page.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Date out the old version and date in the new version 1.

In the list, find and select the original formula version

In the To date field, set the date to '2016-12-14'.

Click Save.

In the list, find and select the new formula version

In the From date field, set the date to '2016-12-15'.

Click Save.

Approve and activate the formula 1.

Click Approve.

In the Approved by field, enter or select a value.

Select the Do you also want to approve the formula? option.

Click OK.

Click Activate.

Close the page.

Exercise - Create and update a scalable Formula Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/27-exercise-create-and-update-scalable-formula Your manufacturing plant has obtained a new mixer that is 1.5 times the size of the current mixer used to make part P9500 in company USP2. Engineering has determined that the vitamin compounds do not need to increase in quantity, but the other ingredients do. Create a new formula for the larger size based on the existing formula for the part.

Copy the existing formula for P9500 1.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P9500'.

In the list, click the link in the selected row.

Click Formula versions.

Click New.

Click Formula and formula version.

In the Formula number field, type a P9500V0.

In the Name field, type a V0.

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Select the Copy option.

10. In the Site field, enter or select 1. 11. Click OK. 12. In the Formula version field, select the current version 13. Click OK.

Verify the lines are flagged as scalable for P9500 except for the vitamin compounds 1.

In the lines, find the vitamin compounds.

Select or clear the Scalable check boxes.

Click Save.

Update the formula size and from formula size in the new formula 1.

In the Lines or header field, select header.

Set Formula size to '1500'.

Set From formula size to '1500'.

Click Save.

Approve and activate the formula 1.

In the Lines or header field, select lines.

Click Save.

Click Approve formula.

In the Approved by field, enter or select a value.

Click OK.

In the Lines or header field, select header.

Click Approve in the Versions grid.

In the Approved by field, enter or select a value.

Click OK.

10. Click Activate. 11. Close the page.

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Exercise - Create a percentage based formula Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/28-exercise-create-percentage-based-formula Company USP2 has been contracted to make a new orange juice with the following volume percentages for the final mixture. The mixture should also have Vitamin C and Vitamin A added per the mixing instructions below. The volume batch size is to be 1500 gallons. Ingredient

Recipe percent / quantity

P9500

M9001

92%

M7004

M8004

1.33 lb/1500 gal.

M8003

1.1 LB/1500 gal.

Create new released product 1.

In the USP2 company go to Product information management > Products > Released products

Click New.

In the Product number field, type 'P6100'.

In the Product name field, type 'Orange Juice'.

In the Search name field, type 'Orange Juice'.

In the Item model group field, enter or select a value.

In the Item group field, enter or select a value.

In the Storage dimension group field, enter or select a value.

In the Tracking dimension group field, enter or select a value.

10. In the Inventory unit field, enter gal 11. In the Purchase unit field, type gal.

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12. In the Sales unit field, type gal. 13. In the BOM unit field, type gal. 14. Click OK. 15. In the Production type field, select 'Formula'. 16. Click Save.

Copy the existing formula for P9500 1.

Go to Product information management>Products>Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P9500'.

In the list, click the link in the selected row.

Click Formula versions.

Click New.

Click Formula and formula version.

In the Formula number field, type a value.

In the Name field, type a value.

Select the Copy option.

10. In the Site field, enter or select 1. 11. Click OK. 12. In the Formula version field, select the current version 13. Click OK.

Verify the lines are flagged as scalable for P9500 except for the vitamin compounds 1.

In the lines, find the vitamin compounds.

Select or clear the Scalable check boxes.

Click Save.

Update the formula size and from formula size in the new formula 1.

In the Lines or header field, select header.

Set Formula size to '1500'.

Set From formula size to '1500'.

Click Save.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Approve and activate the formula 1.

In the Lines or Header field, select lines.

Click Save.

Click Approve formula.

In the Approved by field, enter or select a value.

Click OK.

In the Lines or header field, select header.

Click Approve in the Versions grid.

In the Approved by field, enter or select a value.

Click OK.

10. Click Activate. 11. Close all pages.

Exercise - Create a step consumption formula Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/29-exercise-create-a-step-consumption-formula The formula for product P9500 in company USP2 is to be updated to change the formula line M9003 from a linear consumption to a stepwise consumption. The consumption on the line shall be: •

0-1400: 5.5

•

1400-2400: 10.6

•

2400+: 15.8

Copy the existing formula for P9500 1.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P9500'.

In the list, click the link in the selected row for P9500.

Click Formula versions.

Click New.

Click Formula and formula version.

In the Formula number field, type P9500V1.

In the Name field, type V1.

Select the Copy option

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10. In the Site field, enter or select 1. 11. Click OK. 12. In the Formula version field, select the current version 13. Click OK.

Set the line for M9003 in the new formula to stepwise consumption and set the step levels 1.

In the lines, find the line for M9003.

Click the Setup tab.

In the Formula field, select 'Step'.

Click the Step consumption tab.

Set Quantity to '5.5'.

Click New.

Set From series to '1400'.

Set Quantity to '10.6'.

Click New.

10. Set From series to '2400'. 11. Set Quantity to '15.8'. 12. Click Save. 13. Close all pages.

Date out the old formula and date in the new one 1.

In the list, find and select the old formula.

In the To date field, set the date to '2016-12-27'.

Click Save.

In the list, find and select the new formula.

In the From date field, set the date to '2016-12-28'.

Click Save.

Approve and activate the formula 1.

Click Approve.

In the Approved by field, enter or select an employee.

Select the Do you also want to approve the formula? option.

Click OK.

Click Activate. www.dynamicscompanions.com Dynamics Companions

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/30-configure-process-manufacturing-quiz

Configure process manufacturing in Dynamics 365 for Finance and Operations knowledge check 1.

Which one of the following scenarios would NOT be a good indication that the company should investigate using Process Manufacturing in Finance and Operations? a.

Production completed in batches with specified batch sizes

Shelf Life tracking required on raw materials and finished goods

Products assembled from a fixed quantity of components

Production includes a yield factor to account for loss during production

Which of the following statements about planning items is false? a.

Planning items are inventoried items that can be manufactured or purchased.

Planning items have a formula that exclusively produces co-products and byproducts.

All costs associated with the planning item are allocated to the co-products and byproducts on the formula.

A planning item Formula has more than 1 co-product.

Summary Link: https://docs.microsoft.com/en-us/learn/modules/configure-process-manufacturing-indynamics-365-finance-ops/31-configure-process-manufacturing-summary In this module, you learned that process manufacturing allows for the use of yield, co-products and byproducts, and other features beyond discrete manufacturing •

A formula item is used for items that are produced in a series of batch manufacturing processes with a specific batch size.

•

A BOM item is used when an item is assembled from a specific quantity of raw materials with varying production quantities.

•

Item model groups are used to define reservation principle, approved vendor requirements and default batch disposition codes.

•

Catch weight is set up at the global level on an item with enterprise specific conversions set up on the released product.

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•

Shelf life can only be tracked on items with a tracking dimension group where batch is active.

•

The vendor check method is defaulted from the item model group but can be modified on the item. Approved vendor inquires can be run from either the item or the vendor. Vendor approval check is completed when adding the item to the purchasing document.

You also learned the following about co-products and by-products: •

Co-products are stocked and consumed or sold at a future date.

•

By-products are non-stocked items that are disposed of.

•

By-products and co-Products can be used together on one formula.

•

Cost burden can be manually specified or specified using total cost allocation.

•

Planning items allow a single formula to produce only co-products.

•

Planning items are non-stocked items only used for planning co-products manufactured together.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Module 2: Identify and Configure Batch Attributes for Process Manufacturing This topic explains how to configure batch attributes in Finance and Operations. Lessons •

Introduction

•

Identify and configure batch attributes

•

Create and configure catch weight items

•

Setup potency management

•

Practice labs

•

Module summary

In this module you learned to: •

Understand Batch Attributes

•

Identify and configure batch attributes

•

Understand Lot and Batch Control processes

•

Configure batch rework

Identify and configure batch attributes for process manufacturing in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/identify-configure-batch-attributes-forprocess-manufacturing/ Often customers demand specific requirements for the finished goods results from process manufacturing. For example, in the cheese industry, milk, which is one of the raw materials that are used to produce the cheese, can have attributes such as fat content and percentage weight. The cheese that is produced from the milk can have other attributes, such as moisture and age. If the customer requirement is not met you either have to rework the process or start a new batch process. To ensure process manufacturers meet customer demands you need to define batch attributes which reflect customer requirements and after quality check the finished goods must meet the value or range of values from batch attributes. In this module, you will learn about: •

Batch attributes

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

•

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Potency management

Identify and configure batch attributes Link: https://docs.microsoft.com/en-us/learn/modules/identify-configure-batch-attributes-forprocess-manufacturing/1-identify-configure-batch-attributes

Batch attributes Batch attributes are characteristics of raw materials and finished products that make up inventory batches. Batch attributes can vary, depending on factors such as environmental conditions, the quality of the raw materials that are used to produce the batch, or the outcome of the finished product. The number and types of batch attributes that are used can vary widely from one industry to another. Here are two examples that show how to use batch attributes: •

In the cheese industry, milk, which is one of the raw materials that are used to produce the cheese, can have batch attributes to track fat content in each individual milk container. The cheese that is produced from the milk can have other attributes, such as moisture and age.

•

In the steel industry, the iron that is produced might have attributes such as the percentages of magnesium content, silver content, and zinc content.

To better manage and ease the maintenance of batch attributes, first you need to define product specific attributes. Then you can group attributes in case you have products where batches of the product are described with the same attributes. Other examples of batch attributes could be considered for the paint manufacturing industry, where, the paint is inspected and batch attributes recorded for the Color, Viscosity and % VOC levels of each batch. You need to create the batch attributes per customer requirement in order to utilize them for item and batch specific data tracking. The batch attribute can have the following data types: •

String (phrase or free-text entry) -- useful for recording vendor information or Color description.

•

Integer -- whole number data entry.

•

Fraction -- allows for entry of data with decimal places.

•

Enumerate -- A list of values specified for the batch attribute. This list of values must be set up on the batch attribute during attribute creation.

•

Date -- Useful for recording vendor certification date or testing dates.

•

Tolerance Action o

Warning -- User receives a warning when the batch attribute entered is not within the tolerance.

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Not Allowed -- User is not allowed to enter a batch attribute value outside of the tolerance. Not allowed is only Applicable to Integer and Fraction -- All others default to warning only.

•

Minimum - Sets the minimum allowed value for an integer or fraction attribute type.

•

Maximum - Sets the maximum allowed value for an integer or fraction attribute type.

•

Target - Sets the target value for the batch attribute.

•

Increment - Sets the allowed increment value for an integer or fraction attribute type.

When batch attribute(s) are assigned to a product, the batch attribute(s) value can be adjusted on the attributes of the individual batches . This is useful when a company has many different items that all use the same set of batch attributes but each item has a different minimum and maximum target value to meet the requirement, therefore, you can override default values at the product level. For example, a company may have many different chemicals where the viscosity is measured, but for each chemical a specific viscosity range is required. The batch attribute would be set up for the realistic ranges of viscosities, while each item would have the batch attribute of viscosity assigned to the item with a unique range for the item. Similarly, to the item requirement, a batch attribute can be assigned to a specific customer for an item, with customer specific requirements that are setup for the item/customer combination. The requirements at the customer level can be more stringent than the internal requirements based upon how the customer is going to use the material. For the viscosity example, one customer may want the less viscous material in order to aid in flow throughout a tubular reactor, while another customer may want a more viscous material for a different application. You can access the pages for products that you select on the Product information management > Setup > Categories and attributes > Batch attributes page. After you assign batch attributes to a product, You can add batch attribute values to the individual product batches in the Product specific page. You can select product specific button to set the acceptable range of valid values per item.

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When working with batch attributes consider the following facts: •

For items where quality orders are used to determine batch acceptability, the quality order results can be used to update the batch attributes.

•

The setup for the quality order can indicate if batch attributes should be updated.

•

Individual quality order results can also be flagged to update batch attributes individually.

•

Functionality can be used for batch retest or rework testing

•

Product information management > Setup > Categories and attributes > Batch attribute groups allow for the assignment of multiple batch attributes to an item without having to list each attribute.

•

Useful when a set list of attributes must be assigned to multiple items and all have the same batch attribute range requirements.

Example is for chemical company where all purchased solvents are measured for VOC and Purity requirements. A customer can have a range of valid values for an assigned batch attributes which can be assigned for a group of products; However, the attributes values can be overridden at the product level. When completing the reservation of batches to fulfill a sales order to this customer, the correct batch needs to

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be reserved based upon the customer requirements for the batch attributes. Finance and Operations accomplishes this by Allowing the search of batches for reservations based upon the customer's specific batch attribute requirements. Consider the following scenario: In the production of Epoxy adhesive material, the batches are manufactured in order to meet internal standard requirements around Specific Gravity, Viscosity, and Cured material strength. This internal standard is set to allow for product sales to the general public in stores like Home Depot, Walmart and Sears. This same material is ordered by industrial clients that have customer and industry-based standards that the compound must meet, such as aerospace, automotive and general construction requirements. These requirements are more stringent than the standard internal requirements and must be met to be sold to these customers. Instead of creating unique item numbers for these different specifications, all batches are manufactured under a single item and tested for the SG, Viscosity and Cured material strength. Then when an order is obtained from one of these industrial customers, the inventory is reviewed against the customer requirements using the batch attribute search to determine if a batch exists in inventory that meets the requirements. If so, that batch is reserved and shipped to the customer.

Assign batch attributes You can assign batch attributes to individual products that are held in inventory batches, or you can assign the threshold for minimum and maximum as well as target values for a batch attributes to products or specific customers. Before you can assign a batch attribute at the customer level, you must assign it at the product level. The product must have the batch dimension set to Active in the tracking dimension group. To assign a batch attribute to an individual product, use the product-specific page. If the attribute is specific to a product for a customer, use the customer-specific page. When you add an attribute to a product, you also define other parameters. Here are some examples: •

The minimum and maximum ranges for an attribute of the Integer or Fraction type.

•

The tolerance actions for an attribute of the Integer or Fraction type. If the value of the attribute falls outside the minimum and maximum range, the action can be either a warning message or an error message.

•

The target value for the attribute. This value is the optimal value of the attribute, and it applies to all attribute types.

Reserve batches You can search on batch attributes when you do batch reservations for a sales order to fulfill a customer's order, or when you pick and reserve batches for a production order. The search helps finding product batches with batch attributes values that are within the range required for your production or sales order. After you locate the batch or batches, you can reserve the product to the originating inventory transaction line.

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Batch balancing Watch a video on batch balancing in Microsoft Dynamics 365 for Finance and Operations. In the batch balancing process, the amount of ingredients to use in a production batch is calculated from the concentration of active ingredients in selected product batches.

Products that have an active ingredient A product can be defined by its concentration of an active ingredient. The active ingredient of a product is modeled by using a product-specific batch attribute that has a minimum value, a maximum value, and a target level. The target level of a batch attribute represents the estimated percentage of an active ingredient in a product. The minimum and maximum values represent the accepted deviation from the target level. They can be used, for example, as an accepted tolerance for batches at product receipt. A product can have only one active ingredient. To specify the active ingredient of a product, you must first define a product-specific batch attribute. You then associate the attribute as a base attribute of the product. On the product level, you must also specify how the level of the active ingredient for a batch of the product should be recorded: as part of the purchase receipt process or as part of a quality order process. To associate a base attribute with a product, the following setup is required: •

The product must be batch-controlled. To make a product batch-controlled, you must assign a tracking dimension group to the product that has an active Batch dimension.

•

The attribute that indicates the ingredient levels must be defined as a product-specific batch attribute for the product.

You can look up and edit the actual value of the active ingredient for a batch on the Inventory batch attributes page. Select Inventory management > Inquiries and reports > Tracking dimensions > Batches > Inventory batch attributes.

Ingredient types and how they interact in the batch balancing process A formula line that is created can have one of these ingredient types: •

None

•

Active

•

Compensating

•

Filler

The rest of this section provides examples that show how each ingredient type works. The examples are based on the following formula that has a total batch size of 100 liters.

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Ingredient type Item number Formula line quantity Unit None

Liter

Active

Liter

Compensating

Liter

Filler

Liter

Active When a product that has a base attribute is added to a formula line, it's referred to as an active ingredient of the formula. Batch orders that have formulas that include active ingredients can be used for the batch balancing process. For each ingredient in the formula, the batch balancing process estimates the amount that is required to produce the product. The estimate of amounts is based on the concentration of active ingredients in the selected batches. Example Ingredient B has base attribute X and a target level of 30, and it's included in a formula that requires 30 liters of ingredient B for every 100 liters of the product. A batch order is created that has a batch size of 100 liters. The batch order is started, and during the batch balancing process, the user selects a batch of ingredient B that has a potency level of 35. Because the potency level of 35 is higher than the target level of 30, the balanced quantity of ingredient B is reduced by using the ratio of the potency value to the target level of the batch, which is multiplied by the estimated quantity. The calculation of the balanced quantity looks like this: (30 ÷ 35) × 30 liters = 25.71 liters Item number

Ingredient type

Estimated quantity

Balanced quantity

None

Active

25.71

Compensating

14.72

Liter

Filler

39.57

Liter

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Active quantity

Unit

Base value

Liter 9.00

Liter 30.00

DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

None When you apply the batch balancing process when the ingredient type is None, the estimated quantity and the balanced quantity of the formula line in the batch order are the same. Example Ingredient A is assigned to an ingredient of the None type and added to a formula for a finished product. The formula requires 10 liters of ingredient A for every 100 liters of the finished product. When a batch order requires 200 liters, both the estimated quantity and the balanced quantity of ingredient A are calculated as 20 liters.

Compensating A compensating ingredient can either offset or complement the effect of the active ingredient in a product. Therefore, the quantity of a compensating ingredient that is consumed depends on the potency of the product: •

Opposing effect - If the amount of the active ingredient is more than anticipated, you must add less of the compensating ingredient.

•

Complementary effect - If the amount of the active ingredient is less than anticipated, you must add more of the compensating ingredient.

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The relation between an active ingredient and a complementary ingredient is set up on the Compensating principle page. Follow these steps to set up relations between ingredients. 1.

Select Product information management > Bills and materials and formulas > Formulas, open a formula line, and then select Ingredients to open the Compensating principle page.

Select the line that represents a compensating principle, and then select the active ingredient to compensate.

In the compensating principle, you also enter a positive or negative compensating factor to specify how much to compensate for, and whether the principle should be opposing or complementary. A positive factor indicates a complementary effect, and a negative factor indicates an opposing effect. Example Ingredient B is an active ingredient that has base attribute X and a target level of 30. It's included in a formula that requires 30 liters of ingredient B for every 100 liters of the product. Ingredient C is a compensating ingredient, and a quantity of 10 is included in the same formula. A compensating factor of 1.10 is set up for the compensating principle. Therefore, the balanced quantity of the compensating ingredient will be reduced by the difference between the active ingredient's balanced quantity and the estimated required quantity multiplied by 1.10. In the example for the Active ingredient type, the balanced quantity of the required active ingredient was calculated as 25.71, and the estimated required quantity was calculated as 30. In this case, the balanced quantity of the compensating ingredient will be calculated like this: 1.

The difference between the estimated and the balanced quantity is determined: 25.71 - 30 = -4.29

The result is multiplied by the compensating factor: -4.29 Ă&#x2014; 1.10 = -4.72

The estimated compensating quantity is reduced by -4.72 to determine the balanced compensating quantity: 10 - (-4.72) = 14.72

Because 1.10 is a positive compensating factor, this compensating principle has a complementary effect. In this case, the active ingredient is more potent than anticipated. Therefore, more of the compensating ingredient is required.

Filler A filler ingredient is a neutral ingredient that is used to reach the desired output quantity of the finished product. Adjustments to filler quantities are calculated based on variations in the active ingredient and the compensating ingredient compared to the standard quantity.

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Example You've formulated a product that includes ingredients A, B, C, and D for a formula size of 100 liters. You've calculated the balanced quantity of all the ingredient types except the Filler ingredient type that is used on one line. The balanced quantity of the filler ingredient is calculated as the difference between the batch size of 100 liters and the sum of ingredients A, B, and C: 100 - (20 + 25.71 + 14.72) = 39.57

The batch balancing process The batch balancing process is performed from the Batch balancing page. Select Cost management > Batch orders, and then, on the Process tab, select Batch balancing. Batch balancing is available for batch orders that have a status of Started. In general, batch balancing can be applied to batch orders if the formula has at least one formula line where the ingredient type is Active. (For the exception to this rule, see the "Batch orders that aren't applicable for batch balancing" section later in this topic.) The batch balancing process can be divided into two subprocesses: 1.

Balance batch ingredients

Confirm and release the formula

Balance batch ingredients In the Balance batch ingredients subprocess, the amount of ingredients to use for the production batch is calculated based on the selected batches that have active ingredients. As a rule, the calculation can be completed only if there is full coverage of all ingredients. You can't balance only part of the batch that the batch order is set up to produce. You can't save a calculation and then complete the batch balancing process later. If you close the Batch balancing page, you must repeat the calculation to complete the process.

Confirm and release the formula After the ingredient quantities have been calculated, you can confirm and release the formula. The release process differs, depending on whether the products are enabled for the warehouse management processes: â&#x20AC;˘

If a product is enabled for the warehouse management processes, the formula line is released to the warehouse according to the principles for the warehouse management processes. The formula line is released in quantities that match the balanced quantities, and it's released for the specific batches that are selected for the active ingredients.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Formula lines can be released to warehouse only as part of the batch balancing process. Although there are other options for releasing materials for production to warehouse, those options can't be used for formula lines. •

If a product isn't enabled for the warehouse management processes, a production picking list is created for the product when you confirm and release the formula.

In a single formula, you can combine products that are enabled for the warehouse management processes and products that aren't enabled for the warehouse management processes. When the two types of products are included in one formula, the products that are enabled for the warehouse management processes are released to warehouse. For the products that aren't enabled for the warehouse management processes, a picking list is created when the formula is confirmed and released.

Batch orders that aren't applicable for batch balancing There is one exception to the rule that batch orders are applicable for batch balancing if the formula has at least one formula line where the ingredient type is Active. If a formula contains an active ingredient for a product that is enabled for the warehouse management processes, but Batch number is below Location in the reservation hierarchy, the batch order isn't applicable for batch balancing. A batch order that isn't applicable for batch balancing goes through the regular process cycle for batch orders.

Exercise - Work with batch attributes Link: https://docs.microsoft.com/en-us/learn/modules/identify-configure-batch-attributes-forprocess-manufacturing/2-exercise-work-with-batch-attributes

Before you begin: To get the most benefit from this exercise, we recommend that you have the standard sample data available in Finance and Operations that is installed by using Lifecycle Services (LCS). In company USPI a new requirement for part P4000, Polypropylene Pellets, to test and record the melting point for each batch is needed. As the product definition employee, create the batch attribute for melting point as an integer attribute with a min of 145° C and max of 175° C.

Create a new batch attribute 1.

Go to Inventory Management > Setup > Batch > Batch attributes.

Click New.

In the Attribute field, type 'MeltingPoint'. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In the Description field, type 'Melting Point (C)'.

In the Attribute type field, select Integer. Set Attribute MIN and MAX.

In the Minimum field, type '145'.

In the Maximum field, type '175'.

In the Increment field, type '1'.

Click Save.

10. Close the page.

Assign a batch attribute In company USPI a new requirement for part P4000, Polypropylene Pellets, to test and record the melting point for each batch is needed. The item specific requirements are 130 - 171° C. Customer US-024 requires a melting point of 135 - 165° C for use in their manufacturing processes. As the product definition employee, associate the batch attribute with the item and the customer with the correct attribute ranges.

Associate a batch attribute to the item 1.

Go to Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P4000'.

Click Product specific in Batch Attributes group on the Manage Inventory tab.

Click New.

In the Attribute relation field, select Melting Point. Set Item Attribute MIN and MAX.

In the Tolerance action field, select 'Not allowed'.

Set Minimum to '130'.

Set Maximum to '171'.

In the Target field, type a value.

10. Click Save.

Associate a batch attribute to the customer 1.

Refresh the page.

Click Customer specific in Batch Attributes group on Manage Inventory tab

Click New.

In the Attribute relation field, enter or select Melting Point

In the Account selection field, type 'US-024'. Set Customer Attribute MIN and MAX.

Set Minimum to '135'.

Set Maximum to '165'. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Click Save.

Close the page.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Record batch attribute(s) values at batch creation A new batch number for part P4000 in company USPI needs to be created. As the inventory manager, create a new batch number and enter the required batch attribute data for the batch.

Create new batch number 1.

Go to Batches.

Click New.

In the Batch number field, type a value.

In the Item number field, type 'P4000'.

In the Manufacturing date field, enter a date.

Click Save.

Record batch attribute data for the batch 1.

On the Action Pane, click View.

Click Inventory batch attributes.

Click Load item attributes.

In the Attribute value field, type a value.

Click Save.

Close the page.

Record batch attribute(s) values using quality orders In company USPI, item M2005 is set to have a quality order created upon the purchase order product receipt. Create a new purchase order for 500 lbs of material, receive the material and enter the information in the quality order that is created.

Verify the batch attribute data was updated upon completion of the quality order.

Create a new purchase order 1.

Go to All purchase orders.

Click New.

In the Vendor account field, enter or select a value. www.dynamicscompanions.com Dynamics Companions

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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Click OK.

In the Item number field, type 'M2005'.

Set Quantity to '500'.

Click Save.

On the Action Pane, click Purchase.

Click Confirm.

10. Close the page.

Receive the purchase order 1.

Go to Arrival overview.

Click Update.

In the Arrival overview profile name field, enter or select a value.

Click Update.

Search for the purchase order that you just created and select the record.

Click Start arrival.

Click Journals.

Click Show arrivals from lines.

Click Inventory.

10. Click Display dimensions. 11. Select the Site check box. 12. Select the Warehouse check box. 13. Select the Batch number check box. 14. Click OK. 15. View details on the Batch number field. 16. Click New. 17. In the Batch number field, type a value. 18. In the Manufacturing date field, enter a date. 19. Click Save. 20. Close the page. 21. In the Batch number field, enter or select the batch that was created. 22. Click Post. 23. Click OK. 24. Click Functions. 25. Click Product receipt.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

26. In the Product receipt field, type a value. 27. Click OK. 28. Close the page.

Complete the quality order 1.

Go to Inventory Management > Periodic > Quality Management > Quality orders.

Click Results.

Click Edit.

Set Result quantity to '5'.

Set Test result to '15.4'.

Click Save.

Close the page.

Click Validate.

In the Validated by field, enter or select a value.

10. Click OK. Verify the batch attribute data. 11. Click the Inventory dimensions tab. 12. Click to follow the link in the Batch number field. 13. On the Action Pane, click View. 14. Click Inventory batch attributes. 15. Close the page.

Batch attribute reservation on sales orders In company USPI, a new customer specific batch attribute requirement is created for product P5000, for the customer with account number US-026. Customer US-026 orders 500,000 lbs of P5000 and a batch order is created to produce it. A new batch order of 500,000 lbs of material will be created to meet the requirements of a sales order from customer US-026. Enter and process the batch order.

Create the customer attribute requirement 1.

Go to Released products.

Use the Quick Filter to filter on the Item number field with a value of 'P5000'.

Click Customer specific.

Click New.

In the Attribute relation field, enter or select a value.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In the Account selection field, type 'US-026'.

Set Minimum to '98'.

Click Save.

Close the page.

Create a new batch order 1.

Go to All production orders.

Click New batch order.

In the Item number field, type 'p5000'.

In the Delivery field, enter a date.

Click Create.

Process the batch order 1.

On the Action Pane, click Production order.

Click Estimate.

Click OK.

Click Start.

Click OK.

On the Action Pane, click View.

Click Picking list.

In the list, click the link in the selected row.

In the journal lines, select each row and complete batch reservation.

10. Click Inventory. 11. Click Reservation. 12. Click Reserve lot. 13. Close the page. 14. Click Post. 15. Click OK. 16. Close the page. 17. On the Action Pane, click Production order. 18. Click Report as finished. 19. Click OK.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Complete the quality order 1.

On the Action Pane, click View.

Click Quality orders.

Click Results.

Click Edit.

Set Result quantity to '5000'.

Set Test result to '98.5'.

Click Save.

Close the page.

Click Validate.

10. In the Validated by field, enter or select a value. 11. Click OK. 12. Close the page.

Create the sales order 1.

Go to All sales orders.

Click New.

In the Customer account field, type 'US-026'.

Click OK.

In the Item number field, type 'P5000'.

Set Quantity to '500,000'.

Click Save.

Complete the batch reservation and shipment 1.

Click Inventory.

Click Batch reservation.

Click Batch attribute search.

Click Customer attributes.

Click OK.

Click Reserve lot.

Refresh the page.

Close the page.

Click Post packing slip.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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10. Click OK. 11. Close the page.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/identify-configure-batch-attributes-forprocess-manufacturing/3-knowledge-check

Identify and configure batch attributes for process manufacturing in Dynamics 365 for Finance and Operations knowledge check 12. In order to populate the item batch attributes against a manually created batch, which of the buttons on the Inventory batch attributes page should be selected? a) Load Item Attributes b) Batch Merge c)

New

d) Inventory Blocking 13. Which of the following dimensions is used to track individual containers when using full visibility catch weight? a) Location b) Warehouse c)

Serial Number

d) Item Number 14. If the equation of Item price = Target Price * (Actual potency / Target potency) is used, and the based price is USD 50/gallon with a target potency of 40%, what would the price be if a batch of potency of 55% is obtained? a) USD 55.50/gallon b) USD 50/gallon c)

USD 68.75/gallon

d) USD 66.55/gallon

Summary Link: https://docs.microsoft.com/en-us/learn/modules/identify-configure-batch-attributes-forprocess-manufacturing/4-summary

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

To ensure that process manufacturers meet the customer demands you need to define batch attributes, which defines customer requirements and after quality check the finished goods must meet the value or range of values from batch attributes. When setting up batch attributes, the minimum and maximum values are the feasible results for the attribute when an integer or fraction attribute type is selected. Enumerate batch attributes require the setup of the enumerate values on the attribute. When associating an attribute to an item or a customer, the min, max, and target values can be adjusted to the item or customer requirements if the attribute type is fraction or integer. Batch attribute groups allow for the association of multiple batch attributes to an item or a customer. Batch attribute data can be associated to a batch manually or through the use of quality orders, and can be used to search for inventory that meets customer requirements at sales order reservation. Using a batch attribute to measure the level of an active ingredient in product batches allows for calculating the amount of the overall usage of ingredients to use in batch orders. This process is called batch balancing. Active, Compensating and Filler ingredient quantities are all adjusted based upon the potency attribute of the active ingredient. Batch balancing allows Finance and Operations to automatically calculate and adjust the quantities in a production formula. The batch attribute values for a specific product batch are recorded during product receipt or reporting as finished from production. Recording of batch attribute values can also be tied to quality inspection using quality orders. Batch attribute pricing allows for pricing a product batch based on the level of its active ingredient. This can be used for both selling and purchasing product batches.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Module 3: Configure Commodity Pricing and Product Compliance This topic explains how to work with commodity pricing, and compliance in Finance and Operations. Lessons •

Introduction

•

Configure commodity pricing

•

Configure product compliance

•

Practice labs

•

Module summary

In this module you learned to: •

Configure commodity pricing

•

Configure product compliance

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Work with commodity pricing, and compliance in Dynamics 365 for Finance and Operations Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/ The fall and rise of prices for commodities such as renewable energy, natural gas, coal, and oil in manufacturing affect the cost of production. In this module you will learn how to set up commodity pricing and stay in compliance for our finished goods. By the end of this module, you will be able to: •

Configure commodity pricing in Finance and Operations

•

Configure product compliance in Finance and Operations

Configure commodity pricing Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/1-configure-commodity-pricing Commodity pricing is used when a raw material purchase price fluctuates over time based upon a commodity exchange. The commodity material may be an agricultural material, such as wheat or corn, a natural resource, such as oil, or a metal commodity such as copper. The pricing of the item is set on a daily, weekly or monthly basis due to fluctuations in the exchange-traded commodity value of the material. In manufacturing, the purchase price fluctuations of the commodity impact the cost and sales price of the finished good that uses the commodity item as a major ingredient in the production process. In order for the sale of the good to remain viable, the sales price of the finished product must be adjusted regularly with respect to the pricing fluctuations in the commodity market. The following parameters at Inventory and Warehouse Parameters > Commodity Pricing tab must be set to utilize commodity pricing in Dynamics 365. •

Cost basis type - Select the cost basis to use as the default for new pricing calculations.

•

Pricing template - Select the pricing template to use as a default, when you generate a pricing and margin update.

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•

Keep BOM/Formula calculations - Select the check box to store results from a commodity pricing and margin update calculation. The results are retained until the update calculation is deleted.

•

Price/discount agreement - Select the trade agreement journal to update with the new sales price for the commodity.

•

Base reference depth - Enter the maximum number of base item references allowed. A line item in the Commodity pricing form can both represent a base item and line which reference a base item. This controls how many line items that can be defined in the chain. When the limit is reached, an error message is displayed.

•

Dimension set - Enter the financial dimensions to use as the default account, department, cost center, and purpose for commodity pricing. You can choose among Dimension sets which have selected financial dimensions that are included in account structures and associated to the chart of account for the company. With the Dimension set selected, you can filter the records in the Price margin update - lines form with the use of the function "Dimension criteria", by the financial dimension values defined by the selected Dimension set.

To utilize commodity pricing in Dynamics 365 for Operations, you must set up a cost basis type and a pricing template along with the price a margin data. •

Cost basis type - You can create a cost basis type record for each commodity market which affects commodity prices. For example, you can create a cost basis type as "NYMEX" to denote the New York Mercantile Exchange.

•

Pricing template - You can create a pricing template to use in the Create price and margin data calculation form. The pricing template together with the quantity and margin templates define the pricing criteria that is used in the formula calculations and the new pricing determination for item, item group, and item by customer relationships.

When creating a quantity and margin template the following must be populated. •

Item Relation - The relation can be specified for all formula items, and individual item group, or an individual formula item. Note that only items where the production type is formula can be used in a quantity and margin template.

•

Customer Relation - The relation can be specified for all customers, a customer group or an individual customer. This is the selection that will be populated on the trade agreement journal that is created from the calculation.

•

Inventory Dimensions - Site and Warehouse can be populated if required for posting trade agreement journals.

•

From and To Quantity - The effective sales quantity for the calculation line.

•

Cost Multiplier - A multiplier to the total production cost of the formula item. The cost multiplier is applied before calculating margin to determine the base cost of the item.

•

Margin amount or percentage - Either a fixed margin or a percentage that is based on the multiplied cost of the manufactured item.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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The pricing calculation in Dynamics is the form in which the raw material commodity pricing information is entered. The applicable date range for the commodity price is also entered on the pricing calculation form. For the example of the oranges the pricing is set for a month at the beginning of the month, therefore the date range would be entered for the entire month on the pricing calculation form. If multiple commodities are all calculated using the same cost basis with the same date ranges, only one pricing calculation is required. In the details form for the pricing calculation the raw commodity along with a cost is specified as an individual line. Pricing calculations also allow for the cost of one cost item to be based upon the changing cost of a different product (called a base item) and a cost factor. This could be used when one purchased item cost is based on another purchased item cost such as the price of roasted and unroasted coffee beans where the price of the roasted beans is based on the unroasted coffee bean commodity price. After entry of the raw material commodity pricing data, the cost and sales price of the manufactured items can be calculated by running the function to create price and margin data. When running the function the pricing calculation to utilize is selected. Dynamics then review the pricing calculation and finds all Formula items that utilize the commodity item and completes a BOM calculation to determine a new cost price based upon the updated commodity price. This price calculation continues up the BOM tree until a finished good is found. For any item with a Quantity and Margin Template the sales price and margin are then calculated for review. When the pricing and margin data calculation is completed the pricing calculation can be reviewed in the pricing update form. This pricing can then be selected to create a trade agreement for the specific customers or all customers as was setup in the quantity and margin setup for the pricing template. The trade agreement must be posted by a user after creation from the pricing update form. The trade agreement that is created is valid for the dates that are specified in the pricing calculation utilized. Consider the following scenario: Crude oil pricing is based upon the crude oil futures market traded on the New York Mercantile Exchange, the price for a barrel of crude oil can be very volatile based upon supply and demand which can be seen by analyzing the price over the last 5 years. Between 2012 and 2015 the price of crude hovered around $90-100 per barrel, but in 2015 the price plummeted to $50/barrel and kept dropping, hitting a low around $35/barrel. It is currently priced around $52/barrel. During the rise and fall of the price of crude oil, the price of the gasoline was adjusted to compensate for the price changes of the crude oil. Commodity pricing is used when a raw material purchase price fluctuates over time based upon a commodity exchange. The commodity material may be an agricultural material, such as wheat or corn, a

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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natural resource, such as oil, or a metal commodity such as copper. The pricing of the item is set on a daily, weekly or monthly basis due to fluctuations in the exchange-traded commodity value of the material. In manufacturing, the purchase price fluctuations of the commodity impact the cost and sales price of the finished good that uses the commodity item as a major ingredient in the production process. In order for the sale of the good to remain viable, the sales price of the finished product must be adjusted regularly with respect to the pricing fluctuations in the commodity market. The following parameters at Inventory and Warehouse Parameters > Commodity Pricing tab must be set to utilize commodity pricing in Dynamics 365. •

Cost basis type - Select the cost basis to use as the default for new pricing calculations.

•

Pricing template - Select the pricing template to use as a default, when you generate a pricing and margin update.

•

Keep BOM/Formula calculations - Select the check box to store results from a commodity pricing and margin update calculation. The results are retained until the update calculation is deleted.

•

Price/discount agreement - Select the trade agreement journal to update with the new sales price for the commodity.

•

To utilize commodity pricing in Dynamics 365 for Operations, you must set up a cost basis type and a pricing template along with the price a margin data. •

•

When creating a quantity and margin template the following must be populated.

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EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

•

Inventory Dimensions - Site and Warehouse can be populated if required for posting trade agreement journals.

•

From and To Quantity - The effective sales quantity for the calculation line.

•

Cost Multiplier - A multiplier to the total production cost of the formula item. The cost multiplier is applied before calculating margin to determine the base cost of the item.

•

Margin amount or percentage - Either a fixed margin or a percentage that is based on the multiplied cost of the manufactured item.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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This pricing can then be selected to create a trade agreement for the specific customers or all customers as was setup in the quantity and margin setup for the pricing template. The trade agreement must be posted by a user after creation from the pricing update form. The trade agreement that is created is valid for the dates that are specified in the pricing calculation utilized. Consider the following scenario: Crude oil pricing is based upon the crude oil futures market traded on the New York Mercantile Exchange, the price for a barrel of crude oil can be very volatile based upon supply and demand which can be seen by analyzing the price over the last 5 years. Between 2012 and 2015 the price of crude hovered around $90-100 per barrel, but in 2015 the price plummeted to $50/barrel and kept dropping, hitting a low around $35/barrel. It is currently priced around $52/barrel. During the rise and fall of the price of crude oil, the price of the gasoline was adjusted to compensate for the price changes of the crude oil.

Configure product compliance Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/2-configure-product-compliance Product compliance is used to track chemical and safety related information for items that are purchased and sold within a company. Examples of products that may require tracking in Dynamics include flammable chemicals to include product safety sheets with each shipment, carcinogens to restrict and regulate shipment to specific countries or states, and other chemicals to track CAS, OSHA or EPA codes as required by local and federal regulations. Product Compliance allows for the tracking of products as a: •

Regulated Product - A product that is regulated by a government authority of a country, region or state.

•

Restricted Product - A product where the distribution is limited or constrained by a government authority.

•

Reported Regulated Product - A product that is regulated by a government authority of a country, region or state and requires compliance and audit reporting.

It also allows for tracking of a Product safety data sheet which is a brochure that contains handling, emergency and other safety related information about the product. Dynamics also includes tracking of the safety data sheet validity dates. In order to utilize product compliance within Dynamics, the following parameters at inventory and warehouse management must be set: •

Administration user - This is the user who will receive notifications from Dynamics when the PSDS are set to expire.

•

PSDS Effectivity days

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•

Compliance check transactions - Transactions required to issue user warnings when product safety data sheets are expired or were never sent to the customer, including PO entry, SO entry and Pack Slip Posting. Also allows for the ability to default printing of the PSDS to customer who never received a valid copy and to prevent posting of the packing slip/invoice when the PSDS is expired.

•

PSDS Notification transactions - Options for issuing alerts to the Administrator including when a PSDS is expired in a sales or purchase transaction.

•

Annual reporting date ranges

•

PSDS control

Regulated product lists are mandatory for any item that is a controlled item. In order for an item to have the Product Safety Data Sheet print correctly, the item must be listed on a regulated product list. The regulated product lists may also be flagged as reported if the usage of items on the list need to be reported to local regulatory agencies. A regulated product list may be set for a country or a country and region depending upon the reporting requirements as some regions require more stringent reporting than the country requirements, for example in California. In setting up restricted product lists, the lists are based on where products are allowed or not allowed to be sold. Each list is set for a country and/or state/province and if the products on the lists are allowed or excluded from sale to that area. If the number of states or regions in a country where product is allowed to be sold is greater than the number where it is excluded for sales, an inclusion list should be set up for the country first and then exclusion lists set for each state, province or region where the item is not allowed to be sold. Each item can only exist on one type of list for a country. If the product is listed on exclusion lists, the product is assumed to be included for all other states in the country. Each item that is a PSDS controlled product must be listed on a restricted product list. Product Safety Data Sheets (PSDS) are used to detail safety information to users of the material. The safety data sheet is standardized into multiple sections that include information on the Chemical identification and composition of the material, hazards identification, first aid measures, fire and explosion data, handling and storage, protection and chemical property information. In Dynamics the PSDS is associated to a regulated and restricted item to print at shipment to customer in regulated and restricted countries or to track for expiration to request a new copy from the vendor of the material.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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In order to utilize the PSDS notifications at purchasing and shipping, a PSDS list must be created for the country and/or country/state combination for the address on the order. The expiration and advice date validation for a PSDS is based on the PSDS list setup which can be modified from the default parameter dates. Local regulations require maintaining a valid PSDS on-site at all times with the validity time period based upon the location of the company. Dynamics can track the expiration dates of the PSDS and notify the user when a new copy is to be received or sent to a customer. In Microsoft Dynamics 365 for Finance and Operations a released product can have additional safety information added to the item for tracking including information required by: •

EPCRA - Emergency, Planning and Community Right-To-Know Act

•

CERCLA - Comprehensive Environmental Response, Compensation, and Liability Act

•

TSCA - Toxic Substances Control Act

•

TRI - Toxics release Inventory from United States Environmental Protection Agency

•

OSHA - Occupational Health and Safety Administration

•

EHS - Extremely Hazardous Substances

•

CAS - Chemical Abstract Service - A unique registry for organic and inorganic chemical compounds.

Along with reporting the types of material stored at a company, some governments and government agencies require the usage and the on-hand inventory to be reported with each quarterly or annual report. In Dynamics the usage and on-hand inventory status can be calculated automatically for a controlled item. The function updates the usage and on-hand inventory based upon inventory transactions during a set date range that is setup in the product compliance parameters. When creating a purchase order for a regulated and restricted product the following checks are completed: •

If no PSDS exists, a warning message is displayed to request a new PSDS from the vendor.

•

If PSDS exists but is passed the advice date or expired, a warning message is displayed to request a new PSDS from the vendor.

•

If PSDS exists and is valid, no message is displayed.

Upon sales order entry Dynamics completes the following checks. Validates the item is not restricted for sale to the country/state on the sales order. If the item is restricted a error message is given and the item is not allowed to be shipped to the customer. •

Determines when the current PSDS for the material was last sent to the customer.

•

If current PSDS version sent and within the expiration time period, no notification given.

•

If previous PSDS version sent, a warning message to send latest PSDS is given.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

When completing the packing slip for a restricted product where there is a PSDS associated to the item, the PSDS can be automatically printed by Dynamics. In order to print the PSDS automatically the following setup must be completed. •

The PSDS must be active and within the expiration date requirements (either based on delivery date or current date in the product compliance parameters).

•

The item must be set as a restricted and regulated product.

•

On the inventory management parameters, both the Print Product Safety Data Sheet AND Prevent Sales Pack Slip/Invoice Posting must be set to TRUE.

•

The PSDS file associated to the PSDS record must have the restriction field set to "External" in document handling.

The PSDS will open once the packing slip is created, based upon printing setup it can be set to print to the default printer or remain displayed on screen for the user to manually print.

Exercise - Setup commodity pricing Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/3-exercise-setup-commodity-pricing In company USP2, the price of apples, part M9103, is to be tracked based upon the NYMEX commodity exchange pricing of apples. The sales price of the Apple Sauce, part P9100, manufactured from this apple should be based on a margin of 45% and a cost multiple of 1.25 for all quantities. As the pricing employee in the company, set up the cost basis and pricing template for this scenario.

Create Cost Basis 1.

Go to Inventory management > Setup > Commodity pricing > Cost basis type.

Click New.

In the Cost basis type field, type 'NYMEX'.

In the Description field, type 'New York Mercantile Exchange'.

Click Save.

Close the page.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Create Pricing Template 1.

Go to Inventory management > Setup > Commodity pricing > Pricing template.

Click New.

In the Pricing template field, type 'Apples'.

In the Description field, type 'Apples'.

Click Save.

Create Quantity and Margin Template 1.

Click Quantity and margin template.

Click New.

In the Item relation field, type 'P9100'.

In the Site field, type '1'.

Set Cost multiplier to '1.25'.

Set Margin percentage to '45'.

In the Warehouse field, type '12'.

Click Save.

Close the page.

Complete Inventory Parameter Setup 1.

Go to Inventory management > Setup > Inventory and warehouse management parameters.

Click the Commodity pricing tab.

In the Dimension set field, enter or select a value.

In the Cost basis type field, enter or select a value.

Select Yes in the Keep BOM/Formula calculations field.

Click to follow the link in the Trade agreement field.

Click New.

In the Name field, type 'Price_S'.

In the Description field, type 'Sales Price Adjustment Journal'.

10. In the Relation field, select 'Price (sales)'. 11. Click Save. 12. Close the page. 13. In the Trade agreement field, enter or select Price_S.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

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14. Click Save. 15. Close the page.

Exercise - Create price data and update agreements Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/4-exercise-create-price-data-update-agree In company USP2, the price of apples, part M9103, is to be tracked based upon the NYMEX commodity exchange pricing of apples. The sales price of the apple sauce manufactured from the apples is to be based upon the fluctuations in the pricing of the apples. Complete the calculation of the sales pricing for the apple sauce for the weeks of 2/20/17 and 2/27/17 and approve and post the trade agreements that are created.

Complete Price Calculations 1.

Go to Inventory management > Periodic tasks > Commodity pricing > Create price and margin data.

In the Pricing calculation field, enter or select a value.

In the Pricing template field, enter or select a value.

Click OK.

Click Yes.

Review Price Calculation data and create trade agreements 1.

Go to Inventory management > Periodic tasks > Commodity pricing > Price margin update.

Click Lines.

Click Update trade agreements.

Click OK.

Close the page.

In the list, find and select the desired record.

Click Lines.

Click Update trade agreements.

Click OK.

10. Close the page.

Post Trade Agreements 1.

Go to Sales and marketing > Prices and discounts > Trade agreement journals.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

Click Lines.

Click Post.

Click OK.

Close the page.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Exercise - Set up pricing calculation Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/5-exercise-setup-pricing-calculation In company USP2, the price of apples, part M9103, is to be tracked based upon the NYMEX commodity exchange pricing of apples. The sales price of the apple sauce manufactured from the apples is to be based upon the fluctuations in the pricing of the apples. The weekly pricing for the week of 02/20/17 and 02/27/17 has been received as 0.14/lb and 0.15/lb respectively. Enter the pricing calculation based upon this data.

Create Pricing Calculation for 02/20/2017 - 02/26/2017 1.

Go to Inventory management > Periodic tasks > Commodity pricing > Pricing calculation.

Click New.

In the Cost basis type field, enter or select NYMEX.

In the Site field, type '1'.

In the Run effective date field, set the date to '2017-02-20'.

In the Run expiry date field, set the date to '2017-02-26'.

Click Save.

Enter commodity pricing data 1.

Click Commodity pricing.

Click New.

In the Item number field, type 'M9103'.

In the Warehouse field, enter or select a value.

Set New cost to '0.14'.

Click Save.

Close the page.

Create Pricing Calculation for 02/27/2017 - 03/05/2017 1.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In the Cost basis type field, enter or select NYMEX.

In the Site field, type '1'.

In the Run effective date field, set the date to '2017-02-27'.

In the Run expiry date field, set the date to '2017-03-05'.

In the Previous run field, enter or select a value.

Enter commodity pricing data 1.

Click Commodity pricing.

Set New cost to '0.15'.

Click Save.

Close the page.

Exercise - Product compliance Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/6-exercise-product-compliancy In company USP2, product M7001, Sulfur Dioxide, has been setup as a regulated and restricted product. A new PSDS has been obtained from the vendor and must be attached to the item. Using the attached file, create the PSDS record and activate it based upon an effective date range of 6/1/2016 to 5/31/2019.

Create PSDS List 1.

Go to Inventory management > Setup > Product compliance > Product safety data sheet.

Click New.

In the Country/region field, type 'USA'.

Click Save.

Close the page.

Create PSDS Record 1.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'M7001'.

On the Action Pane, click Manage inventory.

Click Safety data sheet.

Click New.

Select Yes in the Active field.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

In the Document Name field, type a value.

In the Country/region field, type a value.

In the Approval source field, enter or select a value.

10. Click Select. 11. In the Major version field, enter a number. 12. In the Approval date field, set the date to '2016-06-01'. 13. In the Effective date field, set the date to '2016-06-01'. 14. In the Expiry date field, set the date to '2019-05-31'. 15. Click Save.

Upload PSDS File 1.

Click Attach.

Click New.

Click File.

Click Browse.

Select the PSDS file.

In the Restriction field, select 'External'.

Click Save.

Close the page.

Refresh the page.

10. Click Open document. 11. Close the page.

Reporting Details for an Item In company USP2, product M7001, Sulfur Dioxide, has been setup as a regulated and restricted product. As the product safety manager, the OSHA Product Name should be set a Sulfur Dioxide with a threshold quantity of 5, an EHS reportable quantity of 500 and a TPQ of 500. The CAS number should also be set as 7446-09-5. The annual usage quantity must also be updated for reporting.

Enter Product Reporting Details 1.

Go to Product information management > Products > Released products.

Use the Quick Filter to filter on the Item number field with a value of 'M7001'.

On the Action Pane, click Manage inventory.

Click Reporting details.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Click Edit.

In the OSHA product name field, type 'Sulfur Dioxide'.

Set OSHA threshold quantity to '5'.

Set EHS reportable quantity to '500'.

Set EHS threshold planning quantity to '500'.

10. Click Save.

Enter CAS Number 1.

Click Item CAS relations.

In the CAS number field, type '7446-09-5'.

In the CAS name field, type 'Sulfur Dioxide'.

Click Save.

Close the page.

Update annual usage quantities 1.

Click Update quantities.

Close the page.

Create SO and Print PSDS In company USP2, product M7001, Sulfur Dioxide, has been setup as a regulated and restricted product. A new request for 100 oz of M7001 from customer US-031 on April 4, 2017 has been received. As the sales representative, enter the sales order and note the messages received. Ship the material and verify that the valid PSDS printed upon posting of the packing list.

Create Sales Order 1.

Go to Accounts receivable > Orders > All sales orders.

Click New.

In the Customer account field, type 'US-031'.

In the Warehouse field, type '11'.

In the Requested receipt date field, set the date to '2017-04-04'.

Click OK.

In the Item number field, type 'M7001'.

Set Quantity to '100'.

In the Unit price field, enter a number.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

10. Click Save.

Complete Reservation 1.

Click Inventory.

Click Reservation.

Click Reserve lot.

Close the page.

Post Packing Slip and Print PSDS 1.

Click Post packing slip.

Click OK.

Click Yes.

Verify PSDS was printed.

Close the page.

Check your knowledge Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/7-knowledge-check

Work with Commodity pricing, and compliance in Dynamics 365 for Finance and Operations knowledge check 1.

Which of the following is the form in which the sales item, margin and cost multiplier are entered? a.

Cost Basis Type

Pricing Template

Quantity and Margin Template

Pricing Calculation

Which of the following is the menu option in which the commodity traded item pricing information is entered, including the date ranges and the ability to specify a base item? a.

Cost Basis Type

Pricing Template

Quantity and Margin Template

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

d. 3.

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Pricing Calculation

When setting up a Restricted Product List, if the number of states within a country/region where a product is allowed is greater than the number where it is excluded which of the following setups must be completed? a.

Create an inclusion list for the country/region first and then an exclusion for each individual state

Create exclusion lists only

Create an inclusion list only

Create an exclusion list for the individual states first and then an inclusion for the country/region

Summary Link: https://docs.microsoft.com/en-us/learn/modules/work-with-commodity-pricing-complianced365-finance-ops/8-summary The fall and rise of prices for commodities such as renewable energy, natural gas, coal, and oil in manufacturing affect the cost of production. In this module you learned how to configure commodity pricing and stay in compliance for finished goods.

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Index Accept error, 121, 139 Activity relations, 259 Actual takt time, 257 Allocation keys, 5, 18, 35, 142, 143, 173, 174 Approved vendor list, 419, 420 Approved vendor list (AVL), 419 Approved vendors, 399 Attribute group, 202 Attribute type, 203, 206, 215, 221, 234, 237, 451 Attribute types, 203, 206, 221, 237 Attribute value, 202 Attributes, 9, 200, 207, 212, 214, 221, 222, 223, 230, 233, 234, 237, 440, 451, 452, 457 Automatic route consumption, 51, 121, 139, 160, 161, 195, 196 Available at location, 178 Average Daily Demand, 312 Average takt time, 257, 258, 262, 267 Backflush costing, 8, 33, 243, 356, 368, 369, 377 Balance batch ingredients, 449 Base calendar, 40, 146 Base reference depth, 462, 464 Batch attributes, 397, 441, 442, 451 Batch balancing, 445, 449, 458 Batch number, 116, 397, 423, 450, 452, 454 Batch orders, 23, 30, 416, 446, 449, 450 Bill of materials (BOM), 4, 7, 12, 18, 19, 20, 24, 25, 26, 27, 45, 51, 62, 63, 64, 65, 66, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 93, 94, 96, 98, 99, 102, 103, 104, 105, 106, 108, 109, 117, 118, 121, 123, 124, 128, 137, 139, 156, 160, 161, 165, 176, 177, 178, 188, 192, 194, 195, 200, 206, 209, 211, 212, 213, 214, 216, 217, 218, 222, 230, 231, 232, 235, 237, 248, 249, 313, 318, 319, 320, 321, 326, 327, 328, 333, 336, 337, 339, 354, 356, 364, 366, 368, 371, 372, 374, 375, 376, 396, 400, 403, 404, 415, 421, 426, 427, 428, 429, 434, 438, 462, 463, 464, 465, 471 Blank issue, 114, 115 Blank receipt, 114 BOM Versions, 91 Bundle type, 35, 143, 174 By-product, 9, 25, 396, 401, 416, 427, 439 Calculation groups, 85, 197 Calculation of unused quantities, 377 Calendars, 18, 36, 37, 39, 40, 111, 143, 144, 145, 146, 185, 384 Capabilities, 21, 40, 59, 148, 185 Capable-to-Promise (CTP), 319, 324, 328, 329, 330, 337 Capacity planning, 3, 16, 17, 36, 44, 163 Capacity shortage reactions, 253, 261, 272 Catch weight, 8, 9, 395, 396, 406, 408, 409, 411, 413, 421, 439 Catch weight items, 395, 396, 408, 411

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Catch weight tags, 9, 413 Centralized work list, 194 Certificates, 41, 148 Clock-in/clock-out, 178 Color, 81, 111, 215, 216, 223, 441 Compensating ingredients, 445, 446, 447, 448, 458 Compensating principles, 448 Complementary effect, 448 Compliance Chemical Abstract Service (CAS), 398, 399, 466, 468, 475 Comprehensive Environmental Response, Compensation, and Liability Act (CERLCA), 468 Emergency, Planning and Community Right-To-Know Act (EPCRA), 468 Extremely Hazardous Substances (EHS), 468, 475 Occupational Health and Safety Administration (OSHA), 398, 466, 468, 475 Toxic Substances Control Act (TSCA), 468 Toxics release Inventory (TRI), 468 Component Instance, 202 Components, 29, 123, 200, 204, 213, 221, 230, 233, 237 Compose working times, 40, 146 Configuration, 6, 80, 81, 82, 83, 90, 111, 197, 200, 202, 204, 206, 211, 212, 218, 220, 232, 233, 236, 351 Configuration groups, 81 Configuration routes, 80, 81, 82 Configuration rules, 82 Configure to order (CTO), 26 Consistent processes, 194 Constraint model, 202 Constraint-based configuration, 83, 221, 234 Consumption of items, 102, 128 Co-product, 9, 25, 30, 396, 401, 414, 416, 426, 427, 439 Cost basis type, 461, 462, 464, 470, 472, 473 Cost breakdown, 87 Cost categories, 55, 56, 118, 136, 151, 152, 373 Cost groups, 55, 85, 86, 136, 152, 373, 377 Cost management, 85, 379, 409, 449 Cost Multiplier, 462, 465 Courses, 41, 148 Coverage plan by dimension, 115 Customer value, 32, 241 Customers, 32, 229, 241, 332, 334, 451, 452, 455, 456, 457, 462, 465, 476 Cycle time, 33, 242, 257, 258, 261, 266, 298, 386, 387 Cycle times, 261 Default currency, 204 Default order settings, 24, 106, 323, 329, 340, 345 Dimension link, 4, 125, 126 Dimension-based configuration, 83 Direct outsourcing cost group type, 365

DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING Job cards, 34, 50, 60, 67, 119, 122, 137, 138, 160, 190, 194, 196, 197, 199 Job list, 174, 198, 199 Job registration, 35, 142, 167, 168, 169, 174, 175, 188, 193, 194 Job scheduling, 27, 46, 65, 66, 93, 136, 139, 140, 155, 179, 180, 193, 194 Jobs, 35, 66, 139, 143, 169, 174, 193, 272, 277, 279, 295, 304, 315, 387 Journal names, 34, 133 Kaizen, 33, 242, 243, 246 Kanban, 6, 7, 13, 18, 23, 27, 34, 69, 71, 141, 183, 240, 243, 245, 246, 247, 248, 251, 252, 253, 254, 255, 256, 257, 258, 259, 260, 261, 267, 268, 269, 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 299, 300, 301, 302, 304, 305, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328, 329, 330, 331, 332, 333, 334, 335, 336, 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 347, 348, 349, 350, 351, 352, 353, 355, 356, 357, 360, 362, 364, 365, 366, 367, 368, 369, 371, 372, 373, 374, 375, 376, 380, 381, 382, 387, 388, 389, 413 Kanban Job Planning, 294 Kanban schedule, 27, 34, 243, 252, 254, 269, 271, 272, 276, 277, 278, 294, 295, 304, 315, 317, 324, 332, 342, 364, 389 Last plan activity, 285, 322, 344, 387 Lean manufacturing, 3, 31, 40, 141, 240, 242, 247, 249, 250, 264, 267, 278, 283, 284, 294, 313, 314, 320, 321, 322, 327, 329, 330, 341, 343, 350, 354, 355, 356, 357, 367, 369, 371, 372, 373, 376, 377, 382, 387, 389 Lean Schedule Items, 278 Levels, 41, 59, 148, 199, 248 Location, 20, 113, 263, 265, 292, 332, 335, 450, 458 Locked for rescheduling, 93 Machine, 20, 53, 68, 183, 184, 198 Machine operator, 68, 183, 184 Make to order (MTO), 26, 30, 270 Make to stock (MTS), 26, 30, 270 Mandatory cost category for hours, 120, 137 Mandatory cost category for quantity, 120, 137 Manufacturing execution, 5, 68, 167, 168, 169, 171, 173, 174, 175, 176, 177, 181, 182, 183, 184, 187, 188, 190, 194, 195, 196, 197, 198, 199 Master planning, 4, 12, 22, 26, 64, 68, 69, 92, 109, 186, 320, 321, 331, 339, 341, 344, 349, 350, 351, 352, 423, 425 Material costs, 96, 124 Maximum job lead time, 136 Maximum takt unit, 257, 262 Microsoft Solver Foundation, 200, 201, 207, 215, 227, 232 Minimal domains first, 227, 229 Minimum takt time, 257, 262, 267 Model type, 252, 253, 261 Net time, 35, 143, 174 Operation relations, 150 Operation resource, 42, 147 Operation resources, 42, 147 Operation scheduling percentage, 43

Discrete manufacturing, 3, 29, 62, 63, 110 Distinct Product, 202 Effective date, 59, 474 Efficiency, 38, 43, 145, 187 Efficiency percentage, 38, 43, 145 End job, 28, 29, 47, 67, 128 Engineer to order (ETO), 26 EPE Cycle in days, 252 EPECycle, 276 Estimation, 35, 65, 94, 100, 123, 136, 143, 151, 174 Exclusivity, 43 Expiration date, 42, 59, 147, 383, 423 Expression constraint, 203 Facility, 20, 41 Fillers, 445, 446, 447, 449, 458 Financial inventory, 115 Finished items, 102, 128 Finite capacity, 44, 140 Finite material, 140, 187 First plan activity, 285, 313, 314, 322, 344, 351, 387 Flushing principle, 51, 121, 137, 139, 177 For purchase price, 115 Formula items, 394, 395, 401, 463, 465 Formula lines, 450 Formula multiples, 404 Formula size, 403, 405, 430, 433, 435 Formula versions, 402, 429, 431, 432, 435, 436 Formulas, 8, 9, 18, 23, 25, 30, 151, 152, 158, 307, 394, 395, 396, 399, 400, 401, 402, 403, 404, 405, 406, 414, 419, 425, 426, 428, 429, 430, 431, 432, 433, 434, 435, 436, 437, 438, 446, 448, 450, 462, 463, 464, 465, 471 Full visibility, 30, 407, 408 General ledger, 3, 4, 11, 16, 17, 18, 22, 34, 45, 49, 60, 64, 118, 119, 120, 133 Heijunka board, 34, 243 Heijunka leveling, 34, 243, 294 Human resource (HR), 20, 41, 148, 197 Identifying value, 32, 243 Inbound warehouse processing, 412 Indirect activity, 174 Indirect manufacturing, 373 Inv.-manage planned order qty., 120 Inventory model groups, 116 Inventory posting profiles, 4, 48, 131 Item, 8, 24, 53, 54, 55, 57, 67, 70, 71, 72, 83, 85, 93, 98, 102, 103, 104, 105, 106, 107, 108, 111, 118, 128, 132, 151, 159, 204, 235, 258, 293, 321, 323, 331, 332, 334, 341, 345, 348, 350, 352, 375, 383, 398, 401, 419, 420, 421, 422, 423, 424, 426, 427, 428,429, 430, 431, 432, 434, 435, 436, 439, 446, 451, 452, 453, 455, 457, 458, 462, 465, 470, 473, 474, 475, 476 Item configurations, 83 Item coverage, 24, 321, 331, 350, 352, 375 Item groups, 53, 103, 104, 105, 106, 118, 132, 159, 421, 426, 427, 428, 429, 434 Items in production, 51, 123 Job bundling, 174, 198, 199 Job Card Device, 66 Job Card Terminal, 66

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DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Operations, 1, 3, 4, 5, 6, 7, 8, 9, 11, 15, 16, 17, 20, 22, 23, 24, 25, 27, 30, 34, 35, 37, 41, 42, 43, 44, 45, 46, 52, 56, 59, 60, 62, 63, 64, 65, 66, 67, 68, 69, 71, 74, 76, 79, 81, 84, 86, 87, 88, 90, 91, 93, 96, 100, 102, 103, 108, 110, 111, 112, 113, 115, 116, 117, 118, 128, 129, 133, 134, 135, 136, 139, 147, 149, 150, 151, 152, 154, 155, 157, 158, 159, 161, 165, 167, 168, 175, 177, 178, 179, 181, 184, 185, 187, 188, 192, 194, 195, 198, 200, 201, 215, 227, 231, 233, 236, 237, 239, 240, 241, 243, 244, 245, 246, 247, 248, 249, 251, 256, 259, 260, 267, 268, 269, 270, 271, 273, 282, 284, 294, 305, 312, 313, 316, 318, 321, 330, 331, 332, 336, 338, 339, 341, 343, 348, 350, 352, 354, 355, 356, 357, 359, 362, 363, 364, 365, 366, 367, 368, 373, 376, 377, 381, 382, 383, 388, 389, 391, 392, 393, 394, 395, 397, 398, 400, 402, 405, 407, 408, 415, 419, 420, 425, 438, 440, 444, 445, 451, 457, 458, 460, 461, 462, 464, 468, 469, 477 Operations resource, 118, 185 Operations scheduling, 27, 46, 65, 66, 93, 139, 179 Opposing effect, 448 Optimization Modeling Language (OPML), 202, 207, 214, 215 Outbound warehouse processing, 412 Owner, 116 Partial visibility, 407, 409 Pegged supply, 27, 71, 72, 108, 321, 328, 401 Pegging tree, 281, 320, 328 Pegging tree supply status, 281 Per cycle unit of measure, 256, 262 Percentage controlled consumption, 405 Phantom, 71, 73, 108, 401 Physical inventory, 115, 116 Physical reduction, 120, 138 Pick list, 119, 296 Pick negative, 120, 138 Picking lists, 34, 50, 60, 122, 138, 297, 335, 456 Pilot/assistant registrations, 174 Plan ahead, 184 Plan entire pegging tree, 281, 320, 329, 334 Plan groups, 404 Planned order rules, 341 Planning item, 25, 338, 397, 401, 418, 419, 438, 439 Planning period type, 252, 254, 261 Planning time fence, 252, 254, 261, 272 Posted registrations, 170 Predefined variant, 83 Price calculation, 124, 125, 137 Pricing template, 461, 462, 464, 470, 471 Primary stocking, 114, 117 Priorities, 41, 59, 148, 159, 282 Process Actions, 276 Process manufacturing, 3, 8, 30, 31, 393, 394 Process visibility, 194 Product compliance, 10, 398, 399, 466, 473, 474 Product concept, 70 Product configurations, 81 Product master, 70, 202, 221 Product variant, 70, 112 Production cost, 4, 51, 96, 122, 123, 124, 419 Production costs, 4, 51, 122, 123 Production feedback, 190

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Production flow, 18, 33, 241, 243, 244, 245, 246, 249, 251, 252, 256, 259, 261, 262, 263, 264, 265, 266, 291, 316, 356, 362, 363, 370, 371, 376, 382, 384, 385 Production flow costing, 249, 356 Production flows, 244, 251, 252, 259, 262, 263, 264, 266, 356, 370, 382, 385 Production groups, 4, 18, 22, 48, 49, 118, 121, 122, 133, 250, 262, 379 Production jobs, 169 Production journal types, 49, 119 Production journals, 4, 49, 119 Production manager, 68, 181, 195 Production orders, 4, 23, 26, 28, 34, 46, 51, 52, 62, 66, 91, 92, 93, 94, 96, 98, 107, 117, 118, 123, 129, 133, 168, 171, 175, 177, 192, 193, 195, 196, 377, 422, 455, 456 Production planner, 181, 182 Production pools, 5, 16, 17, 18, 22, 36, 52, 93, 141, 142 Production posting, 124 Production processing, 413 Production scheduling, 168, 186 Production status Created, 26, 45, 91, 93, 109, 193, 310, 311 Ended, 28, 29, 47, 67, 93, 102, 109, 128, 129, 131, 193 Estimated, 27, 53, 54, 56, 60, 67, 93, 193, 446 Released, 9, 23, 27, 57, 58, 89, 90, 93, 96, 105, 193, 206, 377, 396, 401, 420, 421, 423, 425, 428, 429, 431, 432, 434, 435, 436, 451, 455, 474, 475 Report as finished, 23, 28, 34, 46, 47, 50, 60, 65, 67, 93, 96, 100, 107, 119, 120, 122, 129, 138, 139, 160, 163, 175, 177, 178, 188, 190, 193, 195, 409, 456 Scheduled, 7, 27, 66, 96, 185, 186, 193, 270, 338, 339, 342, 343, 344, 346, 348, 349, 350, 351, 352, 365 Started, 3, 6, 8, 16, 28, 62, 93, 98, 193, 200, 240, 305, 392, 449 Production supervisor, 182 Production units, 18, 35, 142 Profit settings, 86, 136 Project activities, 169 Project manager, 183, 184 Project team member, 184 PSDS, 399, 467, 468, 469, 473, 474, 476 Quality assessment, 28 Quantity category, 56, 152 Quantity validation, 175 Raw registrations, 169, 170 Raw registrations archive, 170 Real time, 36, 143, 174 Register absence, 179 Register as empty, 286, 291, 322, 344 Register breaks, 179 Register on inventory, 178, 198, 199 Register on production jobs, 178, 198, 199 Register on projects, 179 Register overtime, 179 Registration history, 170 Regulated Product, 466 Regulated products, 467 Release and start, 46, 66 Remain status, 93

DYNAMICS COMPANIONS CERTIFICATION EXAM STUDY GUIDE

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Report as finished offset account, 47, 122 Report remainder as finished, 93 Reported Regulated Product, 466 Required takt time, 257, 258 Reservation, 114, 136, 456, 476 Reserve batches, 444 Resource, 5, 18, 20, 21, 22, 25, 35, 39, 40, 42, 44, 56, 58, 59, 66, 77, 89, 118, 143, 145, 146, 147, 148, 149, 153, 154, 168, 185, 186, 187, 358, 384 Resource capabilities, 5, 18, 21, 22, 40, 58, 59, 147 Resource consumption, 25, 77, 89 Resource groups, 5, 40, 42, 44, 56, 66, 118, 146, 147, 148, 149, 186, 384 Resource requirements, 153, 154 Resource scheduling, 185 Resource types, 18, 20, 35, 143 Resources, 18, 20, 35, 36, 41, 43, 44, 56, 58, 59, 62, 63, 64, 85, 118, 122, 142, 143, 147, 153, 174, 185, 194, 379, 384 Restricted Product, 466, 477 Route cards, 34, 50, 60, 119, 138, 160 Route group dependent, 51, 121, 196 Route network, 5, 136, 157 Route networks, 5, 157 Route operations, 210, 217, 231, 238 Route versions, 5, 155 Routes, 5, 18, 20, 34, 50, 51, 52, 55, 60, 62, 63, 64, 96, 119, 121, 122, 124, 136, 137, 138, 149, 151, 152, 154, 155, 156, 157, 158, 159, 160, 175, 196, 210, 217, 231, 238 Run time, 56, 151, 152 Run time category, 56, 152 Safety factor, 306, 308 Safety stock, 306, 307, 308, 311 Sales line events, 319, 328, 337 Scalable lines, 405 Schedule Board, 272, 278 Scrap method, 129, 140 Semi-finished products, 6, 29, 248 Serial number, 116 Serial number control, 116 Service, 71, 128, 307, 363, 386, 389, 411, 468 Setup time, 151, 152, 196 Shelf advice period, 398 Shelf life, 8, 398, 439 Shop supervisor, 182, 183, 184 Size, 111, 216, 405, 428 Skills, 3, 11, 40, 148

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Standard cost, 8, 358, 370, 371, 372, 382 Standard work day in hours, 40, 146 Step consumption, 404, 406, 437 Stock replenishment event, 321, 326, 330, 337 Storage dimension groups, 105, 106, 114, 115, 117, 293, 421, 426, 427, 428, 429, 434 Striving for perfection, 33 Style, 111 Subcomponents, 206, 208, 222, 235, 237 Subcontracting, 7, 8, 271, 354, 355, 356, 357, 359, 360, 364, 366, 385, 386, 387, 389 Subcontractor, 73, 384 Supermarkets, 33, 242 Supply schedule, 338, 339, 341, 342, 343, 351, 353 Table constraint, 203 Takt time, 33, 242, 267 Takt unit, 257 Titles, 41, 148 Tools, 20 Top-down, 227, 229 Total cost allocation (TCA), 415, 416 Tracking dimension groups, 116 Transaction adjustments, 9, 408 Transfer batch, 153 Transit time, 153 Transportation management processing, 413 Update capacity plan, 120, 138 Use alternative kanban rule, 281, 364 User requirements, 208, 216, 222, 230, 237 Value stream, 6, 32, 33, 241, 242, 243, 244, 245, 246, 247, 248, 251, 252, 260, 261, 267, 364 Value streams, 18, 32, 33, 241, 244, 246, 251, 260, 261, 262 Vendors, 20, 57, 71, 108, 192, 362, 363, 383, 384, 385, 401, 419, 420, 422, 424, 439, 453 Version control, 73, 74, 75, 403 WIP accounts, 28, 46, 55, 67, 122, 250, 367, 373 Work Cell Capacity, 295 Work cells, 6, 242, 248, 263, 295, 315, 333, 334, 384, 385, 388 Work in Progress (WIP), 8, 28, 34, 46, 53, 54, 55, 56, 60, 67, 87, 102, 122, 128, 168, 249, 250, 256, 292, 363, 365, 367, 368, 369, 370, 371, 373, 377, 378, 379, 380, 381, 382, 389 Working time, 3, 37, 38, 40, 144, 145, 146, 153, 185 Working time templates, 3, 37, 144, 185 Working times, 40, 146 Z3, 227, 229

DYNAMICS COMPANIONS

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

CERTIFICATION EXAM STUDY GUIDEGUIDE CERTIFICATION EXAM STUDY

About the Author

EXAM MB-320: MICROSOFT DYNAMICS 365 FOR FINANCE AND OPERATIONS, MANUFACTURING

Murray Fife is an Author of over 25 books on Microsoft Dynamics including the Bare Bones Configuration Guide series. These guides comprise of over 15 books which step you through the setup and configuration of Microsoft Dynamics including Finance, Operations, Human Resources, Production, Service Management, and Project Accounting.

This study guide contains all of the exam prep content, including walkthroughs, practice exercises and sample Questions following core courses that are recommended for the MB-320 certification. Course MB-320T01-A: Configure and use discrete manufacturing in Dynamics 365 for Finance and Operations Module 1: Get Started with Production Control Module 2: Get Started with Discrete Manufacturing Module 3: Configure Discrete Manufacturing Module 4: Create and Complete Production Orders Module 5: Work with Cost Sheeting Module 6: Use Manufacturing Execution Module 7: Get Started with Product Configuration

If you are interested in contacting Murray or want to follow his blogs and posts then here is all of his contact information:

Course MB-320T02-A: Configure and use lean manufacturing in Dynamics 365 for Finance and Operations Module 1: Get Started with Lean Manufacturing Module 2: Configure Lean Manufacturing Module 3: Create and Process Fixed Kanban Rules Module 4: Create and Process Event Kanban Rules Module 5: Create and Process Scheduled Kanban Rules Module 6: Configure Activity-Based Subcontracting and Production Flow Costing

Email: Twitter:

murray@murrayfife.com @murrayfife

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facebook.com/murraycfife google.com/+murrayfife linkedin.com/in/murrayfife

Blog: Amazon:

atinkerersnotebook.com amazon.com/author/murrayfife

Course MB-320T03-A: Configure and use process manufacturing in Dynamics 365 for Finance and Operations Module 1: Get Started with Process Manufacturing Module 2: Identify and Configure Batch Attributes for Process Manufacturing Module 3: Configure Commodity Pricing and Product Compliance

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