Tag: AX 2012 R3

Support for BOMs that includes items with different product dimensions of the same item

This blog post describes new functionality released with the Microsoft Knowledge base (KB) in article 3089402.
 
When using one or multiple of the product dimensions in production, you can have situations where you would like to produce an item, based on a different variant of the same item.
There are many scenarios where this can be useful, e.g.
•  A Green variant of a specific item that is produced using a white variant of the same item.
•  An item variant produced using a different configuration of the same item.
•  Large item variant cut into multiple smaller variants of the same item.
 
Until now it has been mandatory to use different items for the parent and child product respectively. If this was not the case, the user would get a warning from the BOM check that circular reference is not allowed. If the warning was ignored MRP might fail. This warning was caused by the fact that the level check and the BOM level calculation was done per item.
 
With KB3089402 you can use the same item as both parent and child in a BOM – as long as minimum one product dimension differs.

This means that an item can now have multiple levels. In this case:
•  Item A Config 1 is level 0
•  Item A Config 2 is level 1
•  Item A Config 3 is level 2

Required setup
Inventory model: To ensure correct costing, items with BOMs including variants of the same item must use standard cost.
BOM check: Circularity check strategy have to be set to ‘Optimize for high complexity’. The other option ‘Optimize for low complexity’ has not been updated, and will detect circularity for item variants produced from the same item.

High level KB changes
•  Update BOM level calculation for planning: Will include any used product dimensions (Configuration, Size, Color, Style).
•  A correct configured BOM will need to have at least one product dimension that differs. Blank is not a value. The product dimension that differ must be set on both parent and child item in the BOM structure.
•  MRP, Predetermine cost calculation, and Actual cost calculation (inventory closing) is updated to use item and product dimensions with the new BOM levels.

Important implementation note
Ensure that the reqItemLevel table is empty before the first MRP (Master Schedule) run. Any change, like creating or modifying an item, will generate entries to the table and as a result it will not be empty.
The simplest way to do this is to truncate the reqItemLevel table, and then run a full MRP (regenerative with no filters). Otherwise MRP will not generate any planned orders!

 
Q&A
Q: What dimensions are supported?
A: The Product dimensions: Configuration, Size, Color & Style
Q: Will this require additional setup?
A: Only adding the relevant product dimensions to the BOMs, and ensuring to use Standard cost as well as the Circularity check strategy Optimize for high complexity. Also notice the implementation note regarding reqItemLevel.
Q: Will BOM circularity be checked for local changes on Production and Batch orders?
A: No, this KB is not changing what triggers the circularity check, as this is beyond the scope of the KB.
Q: Will this KB address issues related to rework scenarios, where exactly the same item and product dimensions are both input and output of production/batch order?
A: No, rework is outside the scope of this KB.
Q: What is the impact on performance?
A: Impact is none or minimal for both circularity check and MRP. There is a bit more data to process, but information is now stored outside InventTable. MRP tasks are per Product and BOM level, so multi thread of products with variants on different BOM levels is possible and can give minor performance improvements. Our tests have shown less than 5% change in performance based on this KB.
Q: Can I produce a specific variant from “any variant” – e.g. a Red variant from any (Blank) variant of the same item?
A: No, blank is not a value. The product dimension that differs must be set on both parent and child item in the BOM structure. So in this example you will have to choose a color for the used component.
Q: Will the BOM level calculation be stored in the same location for both Planning and Costing?
A: No, that changed with this KB. Costing will continue to use the current BOM level calculation stored in the InventTable. For planning (MRP) a new table is created to store the BOM levels with both Item and Product dimension information. This design will make it possible in the future to differentiate the processed data for Planning vs costing, e.g. ensuring that ended production orders are not included in BOM level calculation for MRP planning.
Q: Will the BOM consistency check uptake support for product dimensions as well?
A: Yes, with Circularity check strategy set to Optimize for high complexity.
Q: Does this mean that we now have the same options for product dimensions as for items?
A: No, but this is a step on the road to full variant support in AX – and a very important step 🙂

T-Shirt example with screenshots
A Green variant of a T-Shirt item is produced, using a white variant of the same item.

First we set the Circularity check strategy to Optimize for high complexity. Optimize for low complexity does not support BOMs that includes items with different product dimensions of the same item.

Create new T-Shirt item with Product dimension for Size and Color, using standard cost

Define size and colors for the product

Create all the variants for the product. We now have 9 variants of the T-Shirt:
 – Size: Small, Medium and Large
 – Each size in the Color: White, Red, Green

We can now create a BOM for producing a medium green T-Shirt, using a medium white T-shirt

The Circularity check will pass, since the color dimension differ

Say we made a mistake and tried to produce a medium green T-shirt from the same medium green. Then we would get an error, indicating that we have a circularity loop in our BOM:

Let’s modify the item coverage to ensure that the white T-Shirt is purchased. The green T-Shirt is produced and with a minimum of 3 to trigger a supply when running MRP

Now let’s run MRP and look at the planned orders generated for the T-Shirt

Notice that we get planned orders to produce 3 medium green T-Shirts, and purchase 3 medium white T-Shirts. Also, looking at the Explosion, you can see that the two colors have different levels

Support for Recycled By-products in AX 2012 R3 CU8

This new functionality is available with KB 2989470 / HF 2989470 and will be included in Microsoft Dynamics AX2012 R3 CU8. To find the HF you can use LCS Issue Search.

What’s new?
To support recycled or recurrent products in process industry, it is now possible to use the same product as both input and output on a formula. As an example, this is useful in plastic molding where consumed plastic regrind can be recovered from the manufacturing process. Other examples are processes where you put metal scrap from the stamping/forming process in a foundry.
The recurring co-product solution in Microsoft Dynamics AX2009 had some limitations on the costing side and was not ported to AX2012. This new solution use by-products with a stronger support for costing.

Feature solution
This new feature enables the consumption and reuse of the same by-products in the production of formulas and batch orders, by allowing BOM circularity for output that has the production type, By-product.
For costing purposes a new Burden type, Recycled, was added to handle the cost of the recycled by-products. Use of the Recycled Burden type deducts the joint production cost that is allocated to the formula and co-products, by using the standard cost value of the recovered by-product.
By-product output from planned and firmed batch orders is ignored during planning. This is done to ensure that demand for the recycled product isn’t pegged against by-product output from the same order, or other orders from the same process or BOM chain. This means that the recycled by-product cannot be pegged until it is on-hand (posted from the batch order).
Finally as a small additional improvement on the Explosion form, it is now indicated when a formula output is a by-product. This is done by adding ‘(By-product)’ to the line.
 
Set up recycled by-products
In order to allow BOM circularity, the recycled item must use standard cost and use the production type By-product or in special cases Co-product. On the formula the recycled product input is a normal formula line, and the output on the same or other formulas is a co-product output of the Production type, By-product, and the Burden type, Recycled.

  1. Product 
    1. The recycled functionality only supports standard cost, so ensure that you select an Item model group that uses the Inventory model, Standard cost, on the General FastTab:
    2. Ensure that the Production type is By-product on the Engineer FastTab for the product:
       
      Note: Products with production type Co-product can also be used, but then you will have to change the Production type to By-product on the formula or batch order, to use the recycled by-product functionality.

  2. Input – formula consuming the recycled product
    The recycled product is added as a normal formula line on the formula:
  3. Output – formula producing the recycled product
    On the formula (can be the input, or another formula) that produces the recycled item, the recycled item must be added as a co-product output of the production type, By-product, with the Burden type, Recycled:

    We are aware that the name Burden is not full correct with the Recycled option added. However, the nature of a hotfix release didn’t leave room for renaming.

 

Let’s try an example to see the feature in action:
 
We have the following three products:
M1 – Main ingredient, Standard cost – $10/Kg, Purchase, 100 kg On-hand
B1 – By Product, Standard cost – $5/Kg, Purchase, 15 kg On-hand
F1 – Formula item, Standard cost, Production, 0 kg On-hand
 
To produce F1 we use the following formula:
F1-FORM, Formula Size: 10 Kg

With the following lines
M1, 20 kg
B1, 10 Kg

Co/By-Product lines
B1, Production type = By-product, Burden = Recycled, 8 Kg 

In AX it looks like this:

With the B1 added as By-product under the Co-products output:


First sales order
To generate a demand for F1 let’s create a sales order for 10 kg:

Running the explosion on the sales order will generate a batch order to produce the 10 kg because we don’t have any F1 on-hand:

Notice that the first line for B1 indicates that we get an additional co-product output of the type, By-product.
 
As both M1 and B1 are on hand, we can firm the planned batch order and start the production. (Planned orders -> Firm)
 
Processing the batch order
Let’s report the batch order as finished with the expected input and output:

What happened to the cost?
I have set a material overhead of 10%, so looking at the cost perspective we get the following.

Batch cost:
     M1 20 kg = 20 * $10 = $200
     B1 10 kg = 10 * $5 = $50
     Overhead 10% = 10% * ($200+$50) = $25
     Total = 200+50+25 = $275

B1 cost share (8kg): 8 * $5 = $40 (note this is fixed to the Std. Cost – no overhead)
F1 cost share (10kg): $275 – $40 = $235 (Incl. all $25 in overhead)

For the formula product – F1:

And for the by-product – B1:
 

Second sales order
Let’s create another sales order for 20 kg F1, to see how planning handles a shortage of the recycled by-product.

Running the explosion on the sales order will generate a planned batch order to produce the 20 kg. Notice the planned order for B1.

We still have plenty of M1: 

  • We have 80 kg and we need 40 kg for the additional order.

However, we are running short of B1:

  • Initially, we had 15 kg. The first batch order consumed 10 kg and output was 8 kg, so now we have 13 kg.
  • For the new order we need 20 kg, so a planned order for 7 kg is created to cover the missing ingredient.

Summary:
With HF 2989470 that is included in Microsoft Dynamics AX 2012 R3 CU8, it is now possible to recycle and reuse by-product output from batch orders.

  • The recycled product must use standard cost and have the production type, By-product or Co-product
  • On the formula, co-product output must be of the type, By-product, and have the Burden type, Recycled
  • Planning will now consider only on-hand inventory for by-products. So potential supply from batch orders is not used for pegging until the batch order output is posted.