Synchronizing Real-Time Product Movement to Improve...

Microsoft Dynamics™ AX

Synchronizing Real-Time Product Movement to Improve Distribution Operation ProductivityWhite Paper

Date: March, 2006

www.microsoft.com/dynamics/ax

STREAMLINE

http://www.microsoft.com/dynamics/ax

Table of Contents

Introduction...................................................................3

Overview: A Solution for Supply Chain Challenges............3Key Solution Benefits...........................................................................................................4Specific Benefits...................................................................................................................4

How Solution Functionality Drives Business Benefits........6Streamlined Receiving.........................................................................................................6Built-in RF/RFID Technology.................................................................................................6Quick Insight through the Warehouse Control Center..........................................................6Strategic Slotting and Putaway............................................................................................7Enhanced Inventory Control.................................................................................................7Flexible Cycle Counting........................................................................................................8Effective Wave Planning.......................................................................................................8Configurable Picking Guidance.............................................................................................8Efficient Packing and Compliant Labeling.............................................................................9Integrated Load and Transportation Management...............................................................9Comply with Vendor Guidelines...........................................................................................9Improved Asset Management..............................................................................................9User-Defined Document Types...........................................................................................10

Solution Map................................................................11Supply Chain Execution for Microsoft Dynamics AX—Solution Map....................................11

Demonstrated ROI and Quick Payback...........................12

Deployment Considerations...........................................12Client and Database Server Requirements.........................................................................12

Conclusion...................................................................................13

2

SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY

IntroductionWholesale distribution operations are becoming more complex, with ever-changing customer requirements, global and electronic marketplaces, multiple distribution channels, and compliance initiatives adding to the perennial challenges of delivering accurately and on time. Successfully meeting these challenges in ways that provide competitive advantage requires tight synchronization of business processes throughout the supply chain and across the entire enterprise. Traditional warehouse management or enterprise resource planning (ERP) solutions are not enough.

True distribution effectiveness means streamlined processes and timely access to the information necessary for moving goods at maximum speeds. Tracking technologies such as radio frequency (RF) and radio frequency identification (RFID) eliminate manual labor but by themselves cannot make up for awkward workflows, redundant handling, or errors. Operational efficiency is the key to increasing inventory turns, improving order fulfillment rates, reducing cycle time, and eliminating chargebacks.

This white paper addresses business and technical decision-makers facing these issues for ambitious companies in which product distribution and transportation play key roles in daily operations and profitability. It describes how the comprehensive, integrated management solution represented by Supply Chain Execution for Microsoft Dynamics AX, formerly Microsoft® Business Solutions–Axapta®, can help build an integrated logistics solution.

Overview: A Solution for Supply Chain ChallengesSupply Chain Execution for Microsoft Dynamics AX integrates information from your business and the entire supply chain to help synchronize real-time product movement and improve productivity within distribution operations. This comprehensive, fully integrated business solution helps companies to balance the demands of extended supply chains and move product more efficiently to increase sales, improve fill rates, and decrease costs.

Building on the multilanguage, multicurrency functionality provided by Microsoft Dynamics, Supply Chain Execution for Microsoft Dynamics AX offers a powerful competitive advantage for companies distributing across a global marketplace. The supply chain solution can be most beneficial to organizations that seek to improve current distribution operations or to manage new initiatives for the following:

Distribution capacity Transportation optimization Delivery service improvement Retail compliance International expansion Implementation of barcode and RF data collection Global supply chain visibility Trading partner collaboration

With the ability to handle single-byte and double-byte languages, international currency exchange, various warehouses, and multiple companies, Supply Chain Execution for Microsoft Dynamics AX can manage entire supply networks. As organizational needs change, the Microsoft Dynamics AX three-tiered, scalable system architecture make it easy to tailor the solution both for today’s requirements and for the future growth of the business.

3


Key Solution Benefits Improve order fulfillment and accuracy Eliminate inefficient processes and excess inventory Enhance workload balancing and planning Enable compliance with industry standards Reduce transportation costs

Supply Chain Execution for Microsoft Dynamics AX delivers a flexible, modular approach, which offers cost-effective options for taking advantage of the functionality that can best enhance your operations. Extended Warehouse Management options streamline receiving, slotting, picking, and order fulfillment. RFID-enabled technology helps ensure Electronic Product Code (EPC) compliance with customer requirements and increases product visibility to facilitate tracking and inventory management while improving cross docking and expedition of back orders. Strategies and tools for selecting optimal product placement enable you to increase efficiency, shorten order fulfillment cycles, and eliminate user error. By balancing workloads, setting performance targets, and deploying resources, companies can achieve maximum work force productivity. Tracking all warehouse activities, sharing key performance indicators, and measuring against baseline standards help ensure a company’s operations are performing at full potential.

With integrated Transportation Execution options, companies can simplify and speed transportation management tasks. Efficient load building, automated carrier assignments, and quick generation of compliant documentation boost efficiency, eliminate errors, and reduce costs. Shipments can be confirmed and tracked as needed to maintain visibility throughout distribution and help ensure timely delivery and customer satisfaction.

Specific Benefits Extended Warehouse Management and Transportation Execution together can provide these specific benefits:

Increased warehouse productivity Reduced labor, transportation, and administrative costs Improved space utilization More accurate inventory Higher fill and throughput rates Enhanced utilization of assets (such as forklifts or pallet jacks) Optimal transportation service levels Stronger distribution capacity Enhanced customer service through improvements to:

Order fill rates Order accuracy On-time delivery rates Value-added services Customer compliance

Support for international expansion

4


Smooth implementation of barcode and RF data collection, such as through RFID Global supply chain visibility Facilitation for trading partner collaboration

5


How Solution Functionality Drives Business BenefitsSupply Chain Execution for Microsoft Dynamics AX enables more efficient flow of goods throughout the supply chain, from inbound receiving through outbound shipment confirmations and tracking.

Streamlined ReceivingCompanies can save time and labor with more efficient receiving processes, including the flexibility to handle cross docking or other immediate needs. Inbound goods can be identified through a variety of receiving touch points, including purchase orders, advanced shipping notices (ASNs) with container-level information, and return merchandise authorizations (RMAs). Explorers, quick-find options, and folder-oriented information groupings can speed receiving and help boost user productivity. These tools make it easy to find and sort information by using the view that makes sense for each task, whether searching for a single receipt or viewing inbound shipments by receipt date, source, priority, or another data field. The top of the explorer window provides at-a-glance visibility of summary data such as total number of receipts, containers, lines, units, and volume. Users can quickly drill down to details as needed.

When an inbound receipt is processed, Supply Chain Execution for Microsoft Dynamics AX can alert users to route items directly to shipping dock locations for immediate-need or cross-dock handling. This logic maximizes order fill rates and improves overall productivity by expediting product movement where appropriate. For example, when a shipment arrives containing items required to satisfy outbound orders, visual cues—such as color-coded icons—call attention to immediate needs. Receiving operators are directed to bypass the standard putaway logic and route the item(s) to a cross-dock consolidation location. This flexible functionality can be turned on or off by configurable system triggers.

Built-in RF/RFID TechnologyWhile paper-based inventory tracking is fully supported, built-in RF wireless and RFID technology increases the speed and accuracy of product identification and handling while helping ensure compliance with requirements of the world’s leading retailers. RF is the key enabler for real-time tracking and control in all warehouse management systems. Users can scan license plates or easily generated barcoded labels to speed putaway, picking, and cycle-counting activities. Additionally, warehouse processes can be set up to require scanning of license plate IDs, items, locations, or location check digits to verify putaway accuracy and increase inventory accuracy.

Companies can start quickly with paper-based inventory tracking and move to RF later with Supply Chain Execution for Microsoft Dynamics AX.

Quick Insight through the Warehouse Control CenterExtended Warehouse Management and Transportation Execution solutions include an executive desktop visibility tool called the Warehouse Control Center (WCC). The WCC offers real-time insight into the entire distribution operation so managers can measure performance and manage improvement. A variety of data views provide graphical, color-coded representations of key warehouse activities, status, and progress. Users simply click to change the metrics or view for the information needed to balance workloads, identify bottlenecks, reallocate resources, and help ensure operations run at full potential.

6


Managers can use the Warehouse Control Center to view activity summaries that support management decision-making and planning and to see quick snapshots of conditions such as the status of inbound goods.

Strategic Slotting and Putaway To make the putaway process a natural extension of the receiving process, companies can tailor a flexible set of locating rules specific to their products and environment. Built-in best practice strategies can be modified or replaced with the specific criteria and rules. The result is a highly adaptable, systemwide storage configuration philosophy in which operational information, rather than rigid hard coding, drives decisions.

As goods are received, the system directs putaway in the most efficient location given the strategies you have selected. Optimal product placement based on order demand eliminates human error, increases space utilization, minimizes unnecessary handling, and shortens fulfillment cycles by helping ensure more efficient picking.

Slotting new products becomes easier. Companies can set slotting criteria in advance to obtain the most efficient placement for each item in the warehouse.

Enhanced Inventory ControlCompanies can maximize space utilization with a fast and efficient process for defining and managing storage locations. Fixed locations and random locations can be configured according to different sizes, cubes, weight capacities, and other characteristics. The Extended Warehouse Management solution tracks all inventory down to the detailed location level. Item records can include multiple cross-references—such as Uniform Product Code (UPC) numbers—to aid in product identification. Unlimited options for units of measure (for example, each case, pallet, inner pack, bag, and box) and automated conversions provide total flexibility and quick user familiarity during setup.

7


Inventory records are maintained in real time through status changes, transfers from one location to another, and adjustments. Users can complete these activities by using RF devices or full-screen workstations. Either way, increased inventory accuracy helps ensure appropriate and timely replenishment while balancing inventory costs against service requirements.

To help ensure smooth order processing and timely product flow, a replenishment module makes inventory movement possible within the distribution center as part of order handling or as an independent request. As with locating rules, replenishment takes advantage of predefined strategies and rules to control product movement. Demand-based criteria and minimum/maximum target levels are evaluated as part of the replenishment process. When using RF product identification, replenishment tasks can be interleaved with others to maximize user productivity and efficiency.

Flexible Cycle Counting Comprehensive cycle counting increases inventory accuracy and relieves the need for onerous physical inventory counting activities. Companies can create user-defined cycle count plans in addition to activity-driven counts based on warehouse activities such as short picks at a location. Cycle counting can occur in RF, on paper, or in mixed modes depending on warehouse requirements. As cycle counts proceed, the system captures detailed statistics, providing quick access to count progress, open counts, percent complete, error rates, and similar information.

Effective Wave PlanningWave planning is the critical process of analyzing and grouping outbound orders into batches for release to the warehouse floor. Efficient batches speed order processing and boost labor productivity.

The wave explorer enables users to view orders that are eligible for processing. The orders included might have been downloaded from the business enterprise system, entered through the Internet, or created internally. Grouping orders, either in the default view or user-defined “pool views,” is simple and fast. Waves can be executed manually, automatically, or as part of a predefined release schedule for total control over how and when orders are processed.

Configurable Picking GuidanceYou can maximize the efficiency of picking layouts and workflows. As waves are executed, how much product to pick and from where is determined based on configurable rules that consider allocation strategies such as first in/first out (FIFO), last in/first out (LIFO), minimum location visits, maximum location space, location search hierarchies, and units of measure. The resulting pick decisions are translated into work tasks for order fulfillment.

8


Support for both RF and paper-based picking provides maximum flexibility and faster implementations. As with the putaway process, pick tasks are executed based on logical rules. A virtually unlimited number of execution strategies—from discrete order picking to batch picking to bulk picking—can be easily configured and implemented.

The explorers, quick-find tools, and reports provide insight into outstanding tasks and task details, which enables you to change priorities, hold tasks, and make other informed decisions to achieve an efficient yet flexible picking process.

Efficient Packing and Compliant LabelingYou can manage packing processes with flexibility and efficiency. Containers may be identified during wave planning or specified by users when packing into final shipping containers at a packing station. The two concepts can also be combined, for example, to generate full case labels during a wave and loose/mixed carton labels at a packing station. If desired, the hierarchy of packing data can include carton detail for generating ASN data that is passed to other parts of the enterprise.

In addition to vendor-compliant labels, the Transportation Execution solution enables users to easily generate labels that meet the requirements of all major parcel carriers. Built-in support includes rating, manifesting, and electronic manifest transmission as well as less than truckload (LTL) rating with Voluntary Interindustry Commerce Standards (VICS)–compliant bills of lading.

Integrated Load and Transportation ManagementCompanies can build shipping loads and generate load documentation that meets customer and carrier requirements. Multiple order confirmations are provided with one click. Carrier assignments can be automated based on routing guide information and preconfigured customer, least-cost, or best-way guidelines. Full parcel manifesting support means that companies can eliminate standalone parcel manifesting systems.

Visibility into shipping activities in real time enables companies to optimize day-to-day efficiency. Carrier routing and rating tools help reduce transportation costs and increase customer service.

Incoming and outgoing shipments can be planned, tracked, and audited. Carrier communication options include bills of lading and manifest information that can be accessed online as needed. Tracking and tracing tools help ensure full product visibility throughout the distribution process. Managers can quickly identify delays or changes in shipment due dates or carrier changes and make proactive responses to avert potential delivery problems. This can help identify and expedite critical shipments, such as those at risk of detention.

Comply with Vendor Guidelines Supply Chain Execution for Microsoft Dynamics AX can meet the vendor compliance guidelines of the top 100 retailers listed in STORES Magazine. Built-in RFID technology can help improve shipment planning and accuracy, help ensure EPC compliance with customer requirements, optimize order fulfillment processes, and enhance in-stock positions.

Improved Asset ManagementAs daily tasks proceed, Extended Warehouse Management captures data for analyzing and optimizing warehouse operations. From the time needed to complete a certain task to the actual cost of completing it, all activities performed on the system are tracked and cataloged for improved asset management. Summarized displays of productivity data

9


appear in an Asset Management Explorer. Yearly, monthly, or daily information can be accessed through the explorer or in Warehouse Control Center views. This functionality provides executive users with the detailed information needed to effectively manage the work force and drive improvement.

User-Defined Document TypesStandard document types are included for all areas of warehouse operations, and these standards can be easily configured by users to eliminate unnecessary programming and ease implementation. Document types include shipping labels, vendor labels, container putaway lists, shipment pick lists, bills of lading, packing lists, parcel manifests, truck manifests, and cycle count sheets. New document types can be introduced through pre-existing standard document configurations. Many document types are built in Microsoft Office Word 2003, so new fields can be added to document templates the same way new text is added to any standard Word document. Document additions and changes are straightforward and driven by business need rather than requiring costly or time-consuming code changes.

10


Solution Map Supply Chain Execution for Microsoft Dynamics AX is a multilanguage, multicurrency business management solution that supports high transaction rates and users across multiple sites. Employees, customers, and vendors can work using their own language and currency, while smooth conversion and reporting functions help ensure full insight and visibility at the highest levels of the organization.

Flexible modules permit business managers to tailor the solution, paying only for what is currently needed. Since all functionality is installed initially, additional capabilities can be easily unlocked as the organization’s needs change and multiply.

Supply Chain Execution for Microsoft Dynamics AX—Solution MapThe following diagram shows the industry-specific capabilities provided by Supply Chain Execution for Microsoft Dynamics AX as they integrate with core Microsoft Dynamics functionality.

11


Supply Chain Execution for Microsoft Dynamics AX

Solution Map

Microsoft Dynamics AX Core Functionality

Demonstrated ROI and Quick Payback Experience shows that Microsoft Dynamics AX solutions can provide a rapid return on investment (ROI). Payback is also achieved quickly. An independent study by Nucleus Research, Inc.1 in 2004 found that 75 percent of participating Microsoft Dynamics AX customers achieved a positive ROI within an average of only 23 months. The remainder had used Microsoft Dynamics AX for periods of less than two years and were expected to achieve a payback within months. More than half of respondents reduced staffing costs as a direct result of their Microsoft Dynamics AX deployments, while 44 percent reduced IT costs in moving from their legacy systems. The positive returns cited in the study ranged from more inventory turns and improved delivery times to productivity gains and changes in working capital.

Deployment Considerations The reliability, connectivity, and performance of Supply Chain Execution for Microsoft Dynamics AX are backed by Microsoft quality assurance. In addition, ongoing service and support are provided by Microsoft Support Services—that means one convenient, familiar contact for all help, maintenance, and upgrade support.

Client and Database Server Requirements

One or more of the following:

Client computers Microsoft Windows® 2000Microsoft Windows XP

Server platformsMicrosoft Windows 2000 ServerMicrosoft Windows 2000 Advanced ServerMicrosoft Windows Server™ 2003, Standard EditionMicrosoft Windows Server 2003, Enterprise Edition

Web serversMicrosoft Internet Information Services 5.xMicrosoft Internet Information Services 6.0 (from Microsoft Axapta 3.0 SP2)

Databases Microsoft SQL Server™ 2000Oracle 9i

Microsoft Office (only if needed)

Microsoft Office 2000Microsoft Office XPMicrosoft Office 2003 Editions

1 Nucleus Research, Inc. The Real ROI from Axapta. Research Note E116, October 2004.

12


ConclusionSupply Chain Execution for Microsoft Dynamics AX helps empower distribution operations with speed, efficiency, and comprehensive control. The solution integrates smoothly with your enterprise management applications to help you orchestrate product movement and optimize complex processes in real time.

With Supply Chain Execution for Microsoft Dynamics AX, companies have the tools they need to face the challenges of increasing customer requirements, globalization, multiple distribution channels, and compliance with government and trading partner initiatives while continuing to grow their business.

For more information, visit www.microsoft.com/dynamics/ax

The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication.

This White Paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property.

© 2006 Microsoft Corporation. All rights reserved.Microsoft, Axapta, Microsoft Dynamics, the Microsoft Dynamics logo, Windows, and Windows Server are either registered trademarks or trademarks of Microsoft Corporation, Microsoft Business Solutions ApS, or their affiliates in the United States and/or other countries. Microsoft Business Solutions ApS is a subsidiary of Microsoft Corporation.

13


http://www.microsoft.com/dynamics/ax

Synchronizing Real-Time Product Movement to Improve...

Documents

Transcript of Synchronizing Real-Time Product Movement to Improve...