Synchronizing Realtime Product Movementdownload.microsoft.com/documents/australia/mbs055/... · build an integrated logistics solution. Overview: A Solution for Supply Chain Challenges

Microsoft Dynamics AX

Synchronizing Real-Time Product

Movement to Improve

Distribution Operation

Productivity

White Paper

Date: March, 2006

www.microsoft.com/dynamics/ax

STREAMLINE

2

SYNCHRONIZING REAL-TIME PRODUCT MOVEMENT TO IMPROVE DISTRIBUTION OPERATION PRODUCTIVITY

Table of Contents

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

Overview: A Solution for Supply Chain Challenges .................................. 3

Key Solution Benefits...................................................................................................................................................................... 4

Specific Benefits................................................................................................................................................................................ 4

How Solution Functionality Drives Business Benefits .............................. 6

Streamlined Receiving ................................................................................................................................................................... 6

Built-in RF/RFID Technology ....................................................................................................................................................... 6

Quick Insight through the Warehouse Control Center ..................................................................................................... 6

Strategic Slotting and Putaway .................................................................................................................................................. 7

Enhanced Inventory Control ........................................................................................................................................................ 7

Flexible Cycle Counting ................................................................................................................................................................. 8

Effective Wave Planning ................................................................................................................................................................ 8

Configurable Picking Guidance .................................................................................................................................................. 8

Efficient Packing and Compliant Labeling ............................................................................................................................. 9

Integrated Load and Transportation Management ........................................................................................................... 9

Comply with Vendor Guidelines ................................................................................................................................................ 9

Improved Asset Management ................................................................................................................................................. 10

User-Defined Document Types ............................................................................................................................................... 10

Solution Map .............................................................................................. 11

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

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

Deployment Considerations ..................................................................... 12

Client and Database Server Requirements ......................................................................................................................... 12

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

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Introduction Wholesale 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 Challenges Supply 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 s

future growth of the business.

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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 compa

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

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Value-added services Customer compliance

Support for international expansion

Smooth implementation of barcode and RF data collection, such as through RFID

Global supply chain visibility

Facilitation for trading partner collaboration

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How Solution Functionality Drives Business Benefits Supply 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 Receiving

Companies 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 Technology

While 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

-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 Center

Extended 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.

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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 Control

Companies 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

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measure (for example, each case, pallet, inner pack, bag, and box) and automated conversions provide

total flexibility and quick user familiarity during setup.

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 Planning

Wave 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-

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 Guidance

You 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.

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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 Labeling

You 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 Management

Companies 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.

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Improved Asset Management

As 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 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 Types

Standard 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.

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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

needs change and multiply.

Supply Chain Execution for Microsoft Dynamics AX Solution Map

The following diagram shows the industry-specific capabilities provided by Supply Chain Execution for

Microsoft Dynamics AX as they integrate with core Microsoft Dynamics functionality.

Supply Chain Execution for Microsoft Dynamics AX

Microsoft Dynamics AX Core Functionality

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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® 2000

Microsoft Windows XP

Server platforms

Microsoft Windows 2000 Server

Microsoft Windows 2000 Advanced Server

Microsoft Windows Server 2003, Standard Edition

Microsoft Windows Server 2003, Enterprise Edition

Web servers

Microsoft Internet Information Services 5.x

Microsoft Internet Information Services 6.0 (from Microsoft

Axapta 3.0 SP2)

Databases Microsoft SQL Server 2000

Oracle 9i

Microsoft Office (only if

needed)

Microsoft Office 2000

Microsoft Office XP

Microsoft Office 2003 Editions

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

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Conclusion Supply 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.

Synchronizing Realtime Product Movementdownload.microsoft.com/documents/australia/mbs055/... · build an integrated logistics solution. Overview: A Solution for Supply Chain Challenges

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