Microsoft Dynamics® AX 2012

Warehouse Management

Content

1. Overview

2. ProductInformationManagement

3. Typesoftransaction

4. InventoryJournal

5. QualityManagement

Overview

• Inventory and Inventory Management concept

• General Warehouse Management Concepts

• Warehouse Management Definitions

• Quality Management

• Inventory and Warehouse Management

Processes

• Integration with Other Modules in Microsoft

Dynamics AX 2012

Product

Products can be items or services, and products that

are tracked in the warehouse become inventory.

Inventory

Inventory is the material and supplies a business

carries either for sale or to provide input in the

production process.

• Rawmaterialsandsupplies

• Productsinproduction

• Sub-assemblies

• Finishedproductsreadyforsale

Inventory Management

Inventory management is planning and controlling inventory from the raw material stage to the customer. Companies must consider inventory at every planning level.

• The most important products to keep in

inventory

• Thecontrolofproductsthroughacompany

• Thequantityofinventorytobeordered• The timing of when a product should beordered

Warehouse Management Key Concepts

Warehouse management is the administration and management of item flow and inventory in a company’s warehousesandstoragefacilities. It provides insight into your inventory and the tools to help increase customer satisfaction and reduce costs.

• Optimize Your Warehouse Layout

• Increase Your Warehouse Efficiency

• Improve Visibility into your Supply Chain

• Complete Inventory Overview

Warehouse Management Definitions

• Sites

• Warehouses

• Location

• Pallet ID

• Batch and Serial Numbers

Warehouse Management Definitions

Definitions Name

Site An area of ground on which a building or group of buildings is constructed.

Warehouse Storage location, such as a building.

Location Detailed item storage location, such as aisle-rack-shelf-bin. Typically, use this dimension when you operate with Warehouse management.

PalletID ID for a group of products on the same pallet. Only used when operating with Warehouse management.

Warehouse Management Definitions

• Sites

• Warehouses

Location Structure

Location Structure

Warehouse Management Definitions

• Pallet Batchandserial

Quality Management

Quality management makes sure that all

products are of a constant quality by enforcing

strict guidelines to controlling the product and

using routine checks and test.

Inventory and Warehouse Management Processes

Integration with Other Modules

Warehouse management is integrated with the

following modules:

• Accountspayablemodule

• Accountsreceivablemodule

• Inventorymanagementmodule

• Masterplanningmodule

Product Information Management

• Core master data in inventory management

are product records of inventoried items.

• Inventory management controls stock per

item number.

Product Information Management

The objectives are:

• Describe theconceptof products, product

masters and their variants

• Describe production creation process

• Describe the variantconfiguration technology

types

• Discuss inventorydimensiongroups

• Discuss how to finalize a releasedproduct

Product Terms and Concepts

Term Definition

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.

ProductMaster

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.

ProductVariant

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 configurator tool.

Product Creation Process

Use the following process to create a product:

1. Createanddefinetheproduct.

2. Release to legal entities.

3. Define legal entity specific data.

4. Use the product.

Create and define the product

Demonstration: Create a Product Master

Your instructor will demonstrate how to create a new product.

5 min5 min

Create and define the product

Product Types

• Producttype:• Item• Service

• Productsubtype• Products

• Identifiable products• No associated variations

• Product masters• Templates or models for variants • Predefined or manually created in sales scenarios• Associated with one or more product dimensions

Product Dimensions

Microsoft Dynamics AX 2012 offers three product

dimensions:

• Size

• Color

• Configuration

Configuration Types

Configuration Technology

Definition

Predefinedvariant

This type enables the product to be modeled based on the product dimensions, color, configuration, and size.

Dimension-basedconfiguration

A configuration technology that is used to create product variants by selecting values for product dimensions.

Constraint-basedconfiguration

This type enables product to be used in the Product Configurator.

Create and define the product

Finalizing Released Products

A product must be finalized in each legal entity where it was released. The following fields must be set up, but can be entered manually or by using a template:

Inventory Dimension Groups

Inventory dimensions are used to define the

physical characteristics of inventory items.

They control how items are stored and drawn

from inventory and enable inventory to be

managed on a detailed level.

Inventory dimensions are split into:

Storage dimensions

Tracking dimensions.

Storage Dimension Groups

Site

Warehouse

Location

Pallet ID

Tracking Dimension Groups

Serial and batch numbers are inventory tracking dimensions, and can be allocated to products only when the product’s tracking dimension group allows for it.

Serial numbers are assigned to individual items, where batch numbers are assigned to a set of items.

Item Groups

Item groups serve three main purposes:

• Defining sets of ledger accounts for accounting

entries, of a collection of products that are

classified in the item group.

• Using item groups to report detailed financial

information and queries.

• Creating other reports that are related to

products.

Item Model Groups

Item model groups determine the following stock and inventory policy:

• Whether the product is stocked or not stocked.• The cost flow assumption and cost measurement

method for valuing inventory of stocked products.• If physical and financial negative inventory is

permitted.• If inventory transactions should be posted to the

General Ledger.• The workflow that is used when you send or

receive items.• The reservation rules.

Item Model Groups

The SetupFastTaboftheItemmodelgroupsformhassixfieldgroups.

• Inventory policy

• Negative inventory

• Warehouse management

• Ledger integration

• Physical update

• Reservation

Item Model Groups

Released Products Details Form

Inventory Transactions

The objectives are:

• Define types of transaction

• Describe and explain the transaction process

• Discuss the transaction integration

• Discussion the transaction and inventory inquiry

Types of Transactions

In order to change the quantity on hand, you need to post an item transaction. Depending on the direction of the item transactions, you may distinguish three different types:

• Item receipts – Inward transactions

• Item issues – Outward transactions

• Inventory transfers

Item receipt

Item receipts increase the quantity on hand.

They include:

• Product receipts in purchasing

• Customer returns in sales

• Reporting as finished in production

• Positive inventory counting adjustments

• Manual journals in inventory.

Transaction Process

Procurement

ReleaseP/OAgreement

Prequisition

RFQItemArrival

On-hand

ProductReceipt

INVENTORY

1

2

Quotation

Item Issue

Item issues include:

• Vendor returns in purchasing

• Packing slips in sales

• Picking lists in production

• Negative inventory counting adjustments

• Manual journals in inventory.

Inventory transfer

Inventory transfers include:

• Transfer orders: support the transfer of items

form one warehouse to another, providing the

option to post and print picking lists.

• Transfer journals: not only available for transfers

from one warehouse to another, but also for

changing other dimension values (e.g. adjusting

a serial number).

Transaction Integration

Most of the inventory transactions do not originate in the inventory and warehouse management module, but derive from other parts of Dynamics AX.

=> Have to enter all data required for the inventory

transaction (like warehouse, quantity and price)

at the transaction origin in the other module .

Transaction and Inventory Inquiry

TransactionsForm

Transaction and Inventory Inquiry

In order to see the current quantity on hand of an item, you may click the button View/On-hand hand inventory on the action pane tab Manage inventory of the released product form.

Transaction and Inventory Inquiry

The physical inventory is the total of transactions, which show following status:

• Postedquantity– Invoiced quantity of purchasing deducting sales

• Received – Product receipt in purchasing, adds to posted quantity

• Deducted – Packing slip in sales, deducts from posted quantity

• Registered– Registration and item arrival, adds to posted quantity

• Picked – Picking in sales, deducts from posted quantity

Watching video

5 min5 min

Inventory Journals

The objectives are:

• Create and process inventory adjustment and

movement inventory journals

• Create and process a transfer journal

• Create and process a bill of material (BOM)

journal

• Explain counting journals

Inventory Journals

Inventory journals are used for posting physical inventory transactions including:

• Posting issues and receipts

• Inventory movements

• Creating bills of material

• Reconciliation of physical inventory.

Journal structure

• Inventory adjustment• Movement• Transfer• Bills of materials• Item arrival• Production input• Counting• Tag counting

Movement Journal

The Movement journal can be used to:• Bring in opening inventory balances during

system setup, and offset these adjustments to specific ledger accounts.

• Charge an item to a different department, for example, from Prototyping to Engineering.

• Take items out of inventory to take to a sales show. The inventory value must be reduced and should be considered as an expense from the Sales Department.

Inventory Adjustment Journal

Use the Inventory adjustmentform to enter:• Loss – where items are picked or removed from

inventory• Gain – where they are received in inventory

When you post this kind of journal, an inventory receipt or issue is posted, the inventory level and value are changed, and ledger transactions are generated.

Transfer Journal

Transfer journals are used to move or transfer an item in an Inventory dimension.

• Each transfer minimally identifies an item,

quantity, and the old and new stocking locations.

• Inventory transfers reflect the immediate

movement of material, without a requirement for

tracking in transit inventory

BOM Journal

• Bill of materials journals, provide the possibility

to post a receipt of a finished items while

consuming the components at the same time.

Entering a negative quantity, you may as well

post disassembling of a finished item.

Item arrival journal

• Item arrival journals provide the option to post

item receipts related to purchase orders or

customer returns

Counting Journal

• Calculate the current on-hand inventory level

that is recorded for a group of items, and then

post the actual physical count to make the

adjustments necessary to reconcile their

differences.

• Each warehouse item has its own counting

group, warehouse management, and product

dimension setup.

Tag Counting Details

• The following information should be registered on the tag: • Tag number • Item number • Item quantity

• Each tag must have one of three status values:• Used – item number counted for this tag • Voided – item number voided for this tag• Missing – item number missing for this tag

Quality Management

The objectives are:

• Describe the function of the quality management

• Describe the quality management process

• Explain how to create and use quality orders

Quality Management

Quality management functionality offers full integration for managing quality processes and non conformances. It helps manage, track, and handle quality processes and issues throughout a company.

The quality management functionality consists of two primary components:

• QualityControl

• QualityManagement

Quality Control

The quality control component is used to set up and manage the quality testing requirements for a company.

• Specification of the test instruments that are used to perform the tests

• Identification of test locations where the tests are held

• Definition of the test specifications that determine whether test items meet the quality standards

• Creation of the quality order

Quality control

Quality control can also be used to record the

test results that are associated with a quality

order and create a Certificate of Analysis

(C.O.A.) that will be linked to the quality order

information.

Quality Management

The quality management component is used to manage non conforming products and items, such as damaged or defective goods, and to track and resolve customer or vendor problems, such as product complaints or performance issues.

• Quality management can also be used to tag non conforming items for quarantine.

Quality Management

In Dynamics AX, there are two options to

exclude quantities of an item from available

stock:

• QuarantineManagement

• InventoryBlocking

Inventory blocking

• Inventory blocking generates a temporary

transaction, manually or automatically for

quality inspection.

Inventory Blocking Form

Quarantine Management

Quarantine management is based on quarantine orders, which post a transfer to a quarantine warehouse. You may transfer stock to quarantine either automatically with every item receipt, or manually when required.

Quarantine Management

InboundDirect

Qualitycontrol

QuarantineWarehouse

MainWarehouse

(Manual)

QuarantineOrder

(Automatic)

ReportasFinish

1

2

Quarantine Management

Quarantine management helps a company control incoming items and prevents items from entering a production environment or from being sold while they are waiting to be quality control or are in a controlled status.

Quality Management

If an item is set up for an automatic quarantine, the quarantine order can be created at the following points in time.

Quality Management

Quality Order

A Quality order definesasetofoneormore

teststhatmustbeperformed for an item and a

test quantity of its related order (such as a

purchase, sales, or production order) or a test

quantity of its inventory.

Quality Order

For each test, the quality order defines:

• The quality specifications

• An Acceptable Quality Level (AQL)

• The applicable test instrument

• The documents that describe the test

• ….

Quality Order

A test can be:

• Quantitative (with specifications and test

results expressed as values for a specified unit

of measure)

• Qualitative(with specifications and test results

expressed as user-defined outcomes that reflect

pass or fail).

Quality Management

Batch FixedQuantity

Percentage…

MainWH

TEST

ItemSampling

OK

(Destructivetest?)

NotOK

Returned

…..

Validation Process

After reporting the test results for each test in a

quality order, start a validation process that

assigns a pass or fail status (based on meeting

the overall AQL) and closes the quality order.

Demonstration: Create a Quality order

Your instructor will demonstrate how to create a Quality order.

5 min5 min