Master Planning in Manufacturing using Microsoft Dynamics 365 for Operations or AX 2012 R3

By:  Scott Hamilton

Editor’s Note:  This article summarizes the newly published book by Dr. Hamilton about master planning in different types of manufacturing. The book contents apply to those firms using Dynamics 365 for Operations or Dynamics AX 2012 R3.

The planning calculations for managing a manufacturing business can provide significant benefits by coordinating supply chain activities driven by S&OP (sales and operations planning) game plans. They help orchestrate success across the organization. However, these calculations often represent one of the more complex and misunderstood aspects of system usage, which leads to ineffective use and limits the ability to achieve the benefits. Businesses that fail to do effective planning within their ERP system commonly rely on informal or non-integrated systems for SCM coordination, and they need additional consulting assistance after go live to understand where their performance is falling short.

My new book about Master Planning in Manufacturing addresses these issues for companies using Microsoft Dynamics 365 for Operations. The book contents also apply to those using Microsoft Dynamics AX 2012 R3 because the master planning capabilities are essentially the same — although the two versions differ in technology foundations and user experience as well as slight changes in terminology.

The intended readers are SCM professionals that need to learn the master planning capabilities for running day-to-day operations in a manufacturing business, especially those trying to use standard software as much as possible. In many cases, these SCM professionals represent the key role in maintaining the S&OP game plans within a company, where the role has traditionally been called a master scheduler. In other cases, they represent members of the project team responsible for system implementation or the sponsoring executives.

1. Scope of Book Topics

The broad range of master planning capabilities can be segmented into three groups consisting of core topics, additional considerations, and major variations. These three groups are reflected in the organization of book chapters shown in Figure 1 and described below.

Figure 1. Organization of Book Chapters
Figure 1. Organization of Book Chapters

Core Topics. The core topics start with common S&OP scenarios and several basics of master planning. The basics include one-time setup considerations about master plan policies and the master planning parameters, and the day-to-day considerations about performing master planning calculations. Several options can be used to perform these calculations, and they generate different outputs for analyzing and coordinating supply chain activities. The analysis tools include information about net requirements and capacity requirements, and the coordination tools include planned orders, action messages, calculated delay messages, and suggested production schedules.

The core topics include modeling inventory locations, the use of coverage planning data to model SCM decision making, the use of demand forecasts, and several sales order considerations such as delivery promises, reservations and the analysis of delivery alternatives.

Additional Considerations  Many additional considerations apply to the master planning calculations, since they build on the foundation of information about items, bills of material, routings, production orders, purchase orders, transfer orders, quality management and batch number tracking. The inventory batches for a batch-controlled item may have shelf life dates and/or batch disposition codes that impact master planning.

Major Variations One or more major variations may apply to a given manufacturing enterprise. A common variation involves coordination of a multicompany supply chain. Other variations apply to process manufacturing scenarios and the unique aspects of using formulas and batch orders. Additional variations apply to project manufacturing scenarios and the unique aspects of project sales orders, item forecasts, and item requirements. Master planning calculations can also apply to lean manufacturing scenarios, such as generating planned kanbans that can be firmed to create scheduled kanbans, and providing the basis for calculating the number of fixed kanbans. The explanation of each major variation covers just the incremental differences in master planning.

Excluded Topics  The technical and administrative aspects of master planning are not covered. Given the book’s focus, it does not cover the related SCM topics that build on the same information (such as product costing) or the master planning considerations for retail-oriented operations.

2. Reviewer Comments

The intended goal of assisting SCM professionals implement master planning was highlighted in reviewer feedback on pre-released versions of the book. Evert Bos of Sikich LLP commented:

“This book provides a thorough education on master planning in a broad business context as well as an excellent guide to work through the specifics of the software. It is highly recommended for users of all experience levels.”

Jeff Moran of UXC Eclipse commented:

“As a former master scheduler and APICS practitioner, I’m delighted to find a guide that lays out the ‘how-to’ techniques of every topic, yet always with an eye to better decision making.”

3. New and Prior Research

This book draws on the prior research documented in the 2016 Editions of my previous books about supply chain management in discrete manufacturing and process manufacturing which covered master planning as part of the broader scope of SCM capabilities. The evolving scope of master planning capabilities has been tracked in previous books about discrete and process manufacturing. In addition to the above-mentioned 2016 Editions, previous books about discrete manufacturing included the 2004 Edition (for AX 3.0), the 2007 Edition (for AX 4.0), the 2009 Edition (for AX 2009), and the 2012 edition (for AX 2012). Previous books about process manufacturing included the 2009 Edition (for AX 2009) and the 2012 Edition (for AX 2012).

Additional research and hands-on testing were conducted over that past year for Dynamics 365 for Operations, especially the currently available version (version 1611). This included participation in webinars and conference sessions; reviews of the existing training materials, e-learning lessons, user documentation and sales demo materials; reviews of blogs and articles; discussions with users, development personnel, and field consultants; and hands-on testing for hundreds of use cases that reflected common requirements in manufacturing. The significant improvements in user documentation – especially the Help Wiki – proved especially useful.

The book includes example screens and case studies to illustrate key points. The example screens reflect use of Dynamics 365 for Operations, and they would be slightly different when using Dynamics AX 2012 R3. The user experience and navigational details are difficult to convey with example screens, but the embedded conceptual models and business processes still apply whether accessing the software from customized pages, workspaces, web-based applications, or hand-held devices.

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