Microsoft’s SCM Innovations for the Discrete Manufacturing Industry and Dynamics AX

posted in: Microsoft Dynamics | 0

By:  Scott Hamilton

Editor’s Note:  The following article reflects Dr. Hamilton’s prior research and 10+ books about Dynamics AX across the past 13 years. The books provide comprehensive explanations about supply chain management (SCM) functionality within AX. The most recent books published in 2016 focus on SCM for Discrete Manufacturing and SCM for Process Manufacturing. A third book applies to both, and covers the major options for Warehouse Management

The manufacturing industry represents one of Microsoft’s key markets, and Dynamics AX has emerged as their flagship ERP product.  Microsoft has steadily introduced significant innovations to Dynamics AX since acquiring the product in 2002, especially for supply chain management (SCM) in the discrete manufacturing industry.  Each release of Dynamics AX has expanded the footprint of SCM capabilities, thereby solving many requirements with out-of-the-box functionality and reducing the need for customizations or add-ons. In addition, the pace of these changes has increased in recent history, and is likely to accelerate even more with the technology foundation underlying the new Dynamics AX and the Azure-centric delivery model.

To really appreciate the progress Microsoft has made in meeting the demands of the discrete manufacturing industry, it is worth exploring past accomplishments related to Dynamics AX.  The historical analysis in this article also provides a starting point for projecting potential areas for future SCM innovations, which you can read about in a separate article.

SCM Innovations for Discrete Manufacturing 

Many different SCM innovations for discrete manufacturing have been introduced since Microsoft’s acquisition of Dynamics AX.  Each major software version typically introduced a step-function increase in the footprint of SCM functionality, and minor releases have also contributed.

Some rough metrics of the SCM footprint size (and increases in footprint size) can be based on my research and related books, where the page count metrics illustrate the depth of comparable topics within the series of books about discrete manufacturing.

These books are identified by the book cover icons in Figure 1, and they are also available on Amazon.  This represents a conservative approach to the metrics about SCM footprint size.  The consideration of additional-yet-related topics — such as projects for engineer-to-order products, lean manufacturing, and the process industry capabilities for mixed-mode scenarios – would indicate an even larger footprint size and greater increases. For example, based on my associated books for AX 2009, the footprint size increased by 30% with the introduction of lean manufacturing capabilities, and by 20% with the introduction of process manufacturing capabilities.  These aspects of SCM functionality were also enhanced in subsequent releases.  However, these additional topics and their evolving scope are not displayed in the figure.

With these limitations in mind, the analysis can still provide a representation of the SCM innovations added to Dynamics AX over time.

The timeline starts with 2003 and the AX 3.0 version (previously called Axapta).  For each version, the relative scope of SCM functionality is identified by the height of the grey box.  The percentages within the yellow-colored arrows indicate the relative increase in functionality between versions.

Microsoft Dynamics AX SCM Innovations for Discrete Manufacturing
Figure 1: SCM Innovations for Discrete Manufacturing

AX 3.0 reflected Microsoft’s efforts to standardize the newly acquired software product.  For measurement purposes, the aggregate SCM functionality of AX 3.0 can be quantified as “1X”, as shown in the left side of Figure 1.  A small increase was introduced in the next release of AX 4.0.  A step-function increase in the SCM footprint was introduced in each subsequent release – AX 2009, AX 2012, and AX 2012 R3 – so that the currently available versions have more than doubled the aggregate scope relative to the starting point.  In addition, the frequency of these major releases reflected an accelerated pace of SCM innovations.

This historical pace of changes in the SCM footprint seemingly slowed with the initial release of the new Dynamics AX at the start of 2016, and the incremental changes were described in a separate article.  This reflected Microsoft’s emphasis on technology changes within the new Dynamics AX while maintaining existing SCM functionality.  However, the new platform will help provide a much faster cadence of innovation in the future, as described in a follow-on article about potential areas for future SCM innovations.


Microsoft has steadily introduced significant SCM innovations for the discrete manufacturing industry, especially in their flagship ERP product of Dynamics AX.  To really appreciate the progress Microsoft has made, this article reviewed the past accomplishments in terms of the SCM footprint size, and also the relative amount and pace of changes across multiple software versions since 2003.  The pace and relative amount of change have increased in recent history.  However, increases in the SCM footprint seemingly slowed for the initial release of the new Dynamics AX at the beginning of 2016, but this simply reflected Microsoft’s emphasis on technology changes while maintaining existing SCM functionality.

About Scott Hamilton

Scott Hamilton has consulted globally with several hundred manufacturing/distribution companies on SCM and ERP issues. His publications include multiple books about SCM using Dynamics AX as well as two textbooks about SCM/ERP, and his books have been translated into Russian, Chinese and Japanese. For more than 10 years, Scott has been a frequent speaker at Microsoft and AXUG conferences around the world, and a multi-year winner of the rarely given Microsoft MVP award for Dynamics AX. His regular column “The AX Solution Architect” is published in He currently contributes to the UXC Eclipse initiatives for manufacturing