demand driven and configure -to- order manufacturing

© Arbela Technologies Corp www.ArbelaTech.com @ArbelaTech

Demand Driven and Configure-to-Order Manufacturing solution

Using Dynamics 365 for Operations

© Arbela Technologies Corp www.ArbelaTech.com @ArbelaTech 2

Objectives/Agenda

• Objectives:• Develop a high level understanding of implementing

Dynamics 365 for Operations for Manufacturing• Discuss the critical components of the implementation and

their challenges• Create an ongoing dialog regarding this topic

• Agenda:• State of the industry• Order to cash best practices, considering distributors as

customers• Various postponement strategies and product modularizations• Supplier managed inventory and consignment capabilities• Implementation methodology• Best practices for item and product setup • Leveraging the standard AX configurator


Arbela Technologies

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• Founded in 2002 by ERP & Supply Chain Veterans.• Leading Microsoft Gold Certified Partner Since 2004.• Headquartered in California with Offices in Georgia,

United Kingdom, & Denmark.• Specialize in Large, Complex, Multi-company

Implementations (Multi-currency, Multi-site, Multi-language, & Shared Services).

• Extensive Industry Knowledge in Manufacturing, Distribution, Retail & Global Financial Management.

• Offer Full Dynamics AX & CRM Implementations, Upgrades, Audits & Development.

• Dynamics AX 7 competency – Add-on development• Security, Compliance, & Auditing Solution for Dynamics AX

2009, 2012, AX 7.• Centralized Master Data Capability & Consolidation Solution

for Dynamics AX 2009 & 2012, AX 7.• Extensive Manufacturing add-ons for Dynamics AX 2012 and

AX 7.98%

Customer Retention

95%Customer

Satisfaction

100+Customers


Social Media

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Facebookwww.facebook.com/arbelatech

Twitterwww.twitter.com/arbelatech

LinkedInlinkedin.com/company/arbela-technologies


Customer Centric Manufacturing: The On-Shore Opportunity

• The On-Shore Opportunity – more customer intimacy, better customer experience

• Off-Shore manufacturing can’t deliver what the customers want AND when they want them

• Mass Customization (I want it my way) is now the norm• Recent US Economic growth is fueling configure-to-order and make-to-

order manufacturing• Many companies have adopted fixed lead-times for a large number of

configurations of their products – creates a competitive advantage in addition to superior product designs and offerings

• Requires a flexible, connected and profitable supply chain and manufacturing• Requires an integrated system to reduce the information, cash and product

lead time

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Configure-to-Order Manufacturing• Building Material, Industrial and Life Sciences Manufacturing, Complex Material

Manufacturing • On-time Delivery, Integrated Supply Chain

• Product Design, Marketing, Demand Planning, Configuration, Order Management, Customer Services, Manufacturing and Supply Chain Planning, Purchasing and Procurement, and Business Intelligence

• Training our clients' teams to use modern ERP and supply chain systems for faster response to customers while reducing inventory

• Common challenges resolved• Integration to configurator• Rapid and fast order entry and visibility across your supply chain• Supply chain planning and postponement strategies• Advanced planning and scheduling• Multi-site and national company set up – shared services• Product numbering and digitizing the product intelligence• Business intelligence – products and customers

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Configure-to-Order Manufacturing• Building Material, Industrial and Life Sciences Manufacturing, Complex Material

Manufacturing • On-time Delivery, Integrated Supply Chain

• Product Design, Marketing, Demand Planning, Configuration, Order Management, Customer Services, Manufacturing and Supply Chain Planning, Purchasing and Procurement, and Business Intelligence

• Training our clients' teams to use modern ERP and supply chain systems for faster response to customers while reducing inventory

• Common challenges resolved• Integration to configurator• Rapid and fast order entry and visibility across your supply chain• Supply chain planning and postponement strategies• Advanced planning and scheduling• Multi-site and national company set up – shared services• Product numbering and digitizing the product intelligence• Business intelligence – products and customers

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Consider a different Approach

Ask what you need in order to improve customer service and

make critical decisions


Solutions for Roles

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Customer as a King: C-Director Level • Business Intelligence: Who are my most profitable customers? Distributors, retailors, and end-customers• Business Intelligence: How am I doing with respect to customers, sales, product configuration, etc.?• Strategic Planning: How to measure and increase shareholder value derived from investments in operations which span

multiple divisions and processes. • Strategic Planning and Execution: How to increase corporate agility to respond to dramatic swings in growth and recession

through outsourcing and alliances – How do I get these done efficiently and predictably?• Advanced Planning Tools: How to plan and manage operations across the geographic and organizational boundaries of

the extended enterprise (often post merger)• Operational Analytics: How do I meet ever changing customer needs and trends?• Operational Analytics: How do I improve delivery performance and improve customers and distributors’ satisfaction?• Simulations: How do I manage my supply chain to meet high volume of unique orders?• Operation Analytics: How can I improve my forecast for my components/sub assemblies?• Closed Loop ERP: How can I reduce errors in my errors and exceptions?• Advanced Scheduling: How can I create a flexible production capability?• People Skills/Talent: How to make the most of a legacy IT infrastructure which today often does not support effective

operational management

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C-level: See Your Sales Data in a Whole New Way

• Stay connected with access from almost anywhere, any device

Give sales managers the ability to get data needed for self-service BI like forecasts, performance, and market trends

Get immediate insights across all your data through self-service analytics

Manage sales performance and identify opportunities and trends

Click to see video

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YTD Sales – Customer Sales Trend

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Product Analysis – Which Configuration is Selling Most?

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Weekly and Monthly - Customer Sales Trends

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Operations: Sample Manufacturing Role-Center


Vendor Performance by Company

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Vendor Aging Report

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Company COGS Report

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Configure Anywhere – Web, Sales, Customer Service

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Various Manufacturing Strategies and Lead Times

Design Purchase Manufacture Ship

Inventory Manufacture Ship

Manufacture Inventory Ship

MTS Delivery Lead Time

Manufacture Assemble ShipInventory

ETO/CTO/ATO Delivery Lead Time

MTO Delivery Lead Time

ATO Delivery Lead Time

Assemble

Assemble

Assemble

Engineer-to-Order

Make-to-Order

Make-to-Stock

Source: Arnold et al., Introduction to Materials Management, 6th ed.

Assemble-to-Order

Inventory

Variety

Volume

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Various Manufacturing Strategies and Lead Times

Design Purchase Manufacture Ship

Inventory Manufacture Ship

Manufacture Inventory Ship

MTS Delivery Lead Time

Manufacture Assemble ShipInventory

ETO/CTO/ATO Delivery Lead Time

MTO Delivery Lead Time

ATO Delivery Lead Time

Assemble

Assemble

Assemble

Engineer-to-Order

Make-to-Order

Make-to-Stock

Source: Arnold et al., Introduction to Materials Management, 6th ed.

Assemble-to-OrderInventory

Inventory

Variety

Volume

Integrated Supply Chain Configure-to-

OrderConfigure-to-

Order

Service?

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Configure-to-Order – One Definition

• Configure-to-Order (CTO)* represents the ability for a customer/sales person to choose the make-up (configuration) of a product during order and quotation processing.

• A Configure to Order (CTO) system is a hybrid of make to order and assemble to order operations. It is a set of components (subassemblies) that are built to stock whereas the end products are assembled to order. This hybrid model is most suitable in an environment where the time it takes to assemble the end product is negligible, while the production/replenishment lead time for each component is much more substantial.

* There are multiple levels of CTO (from ETO , DTO, ATO to MTS) 21


Vision / Objectives / Operational Strategies• Streamline sales to production processes – improve the customer experience

• Easy to do business with • Delivery on-time at a lower cost• Speed up quote to sales processes – spend more time with customers

• Implement a consolidated business system for growth – visibility and productivity • One system of truth

• Improve end-user efficiency and experience implement a new system as the foundation for future capabilities access to the system on any device and anywhere!

• Improve existing manufacturing processes for more accurate customer delivery dates• Short term and long term scheduling

• Increase flexibility, agility and continuous improvement development • Remove constraints to growth & performance – new markets• Manage upgrades – a momentum killing, time consuming, and costly process

• Increase visibility across departments- integrate business processes• Information: Orders, Inventory, Exceptions – shortages Alerts

• Reduce inventory across the internal supply chain

Digitize the enterprise22


Vision / Objectives / Operational Strategies• Streamline sales to production processes – improve the customer experience

• Easy to do business with • Delivery on-time at a lower cost• Speed up quote to sales processes – spend more time with customers

• Implement a consolidated business system for growth – visibility and productivity • One system of truth

• Improve end-user efficiency and experience Implement a new system as the foundation for future capabilities access to the system on any device and anywhere!

• Improve existing manufacturing processes for more accurate customer delivery dates• Short term and long term scheduling

• Increase Flexibility, Agility, and continuous improvement development • Remove constraints to growth & performance – new markets• Manage upgrades – a momentum killing, time consuming, and costly process

• Increase visibility across departments- integrate business processes• Information: Orders, Inventory, Exceptions – shortages Alerts

• Reduce inventory across the internal supply chain

Digitize the enterprise

What are your Strategies and Pain Points?

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Engineering and Product Design

Sales and Customer Service

Marketing- Social Media

Web

Path to Digitization – Breaking Barriers between organization for information

Retailers DistributorsConfigure

QuoteOrder

ATP and CTP

Where to Build and Procure?

Customer Order Delivery Confirmation

Create BoMs and

Routes

Plan, Schedule

ProductionAssembly

Ship

Shipping – Order Status, Tracking, and Shipping

Invoices, AR

Marketing

Keys to the Kingdom

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Engineering and Product Design

Sales and Customer Service

Marketing- Social Media

Web

Path to Digitization – Breaking Barriers between organization for information

Retailers DistributorsConfigure

QuoteOrder

ATP and CTP

Where to Build and Procure?

Customer Order Delivery Confirmation

Create BoMs and

Routes

Plan, Schedule

ProductionAssembly

Ship

Shipping – Order Status, Tracking, and Shipping

Invoices, AR

Marketing

Keys to the Kingdom

Is your company prepared to meet the needs of your customers?

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Challenges, Needs, Strategies - Feedback

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Higher Quality

Lower Prices

On-time Delivery

Standardize Processes

Reduced Supply Chain

Cost

Reduce Quote to

Order

Improve customer service

Flexible and Modularized

Products

Postponement Strategy

Lean Manufacturing

Supplier and Subcontractor Connectivity

SMI and Consignment

Sequencing Full Order Shipping

Advanced Planning and Scheduling

Reduce Order Processing

Time

Improve Order

Accuracy

Social Media B to CB to B

Manage and Capture Sales

Activities

Business Intelligence

Full Order Shipping

Consistent Costing


Key Considerations• Configuration

• 2days to-2 weeks delivery superior customer service• Configuration id?

• Manufacturing• Product numbering previous orders, have I configured it before, who have I sold it to?• Sub-assembely inventory • postponement strategy• Flat Boms -- how to manufacture in parallel work-orders route operations executed in parallel• Manufacture a complete order at the same time everything gets shipped at the same time.. – Customization for Decore.• Re-work and re-make --- super customer service – no charge and or capture the cost

• Supply chain planning• Information lead time reduction – order to inventory Component that can be manufactured quickly vs. long lead time ones..• Available inventory for fast and consistent delivery strategy --??• Demand planning ?

• Common component planning• Forecast consumption??

• Manufacturing execution• For tracking and tracing purposes• Reliability –• Third party and also an AX version


Implementation Methodology

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Agile vs. Waterfall – Which Methodology To Use?

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Conception

Initiation

Analyze

Design

Develop

UAT

VS.

Deployment

Conception

Initiation

Analyze

Design

Develop

UAT

Deployment

Waterfall Agile


Arbela Agile Methodology (AAM) Stages

Analyze Design and Develop DeploySupport –Phase 2

• Go-Live Cutover Plan

• Final Data Migration Plan

• Production Environment Complete

• Go-Live simulation

• Go-Live• Provide Post

Go-Live Support

• Review Deliverables against Business Goals and Close Out Project

• Support end users

• Resolve issues• Stabilize

solution• Review Results• Record and

Communicate Results CRP

Design and SetupWorkshops(WKS)

Gap Discovery(GD)

ImplementationMilestones

CRP 1 CRP 2 CRP 3

• Finalize Production Hardware Configuration

• Training Documentation

• End User Training

• End User Training Complete

• Final System Readiness

• Final Acceptance Testing

• Conduct Acceptance Testing

• UAT Complete

• Project Kickoff• Project Charter• Communications and

Training Plans• Change Control Plan• Key business drivers and

values• Requirements and Business

Process Review• Fit Gap and Solution

Blueprint and Analysis• Roles and responsibilities• Fit Gap Analysis

Spreadsheet• Development, Quality &

Testing Standards• Hardware Configuration• System Installation

complete• FRD – Functional

Requirements Document• CRP timeline • Project plan• Budget Estimate• Analyze Complete

CRP 4

• CRP Start• Detailed CRP scope (integration, security roles, DM and reports)• Valid the scope by introduction and train• Core team Training• Design Workshops• Master data design• Customization and integration complete• Setup Workshops • Determine and create Security Roles• Create Test Scripts• Conduct Feature Testing• Technical Design Document• Complete Setup • Data migration design and development• Complete Data Migration• Reports Complete• Unit Testing Complete• CRP testing and validation• CRP-Complete

•

• Key Tasks• Milestones• Deliverables

January-FebNov-Dec 2016Mid June – October Mid June


Standard Requirements and Intelligent Part NumbersProduct Setups

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Mandatory Setups

• ‘Product subtype’ must be set to “Product master”

• ‘Configuration technology’ decision

• Choice of ‘Configuration technology’ affects options in ‘Product dimension group’

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Intelligent Legacy Part Numbers

• Does the client have to keep their intelligent legacy part numbers?• Example of an outdoor lighting company

• Had been making a single part per configuration, so we were moving from greater freedom to lesser freedom.

• Part numbers were made of segments separated and concatenated by a hyphen

• Every value was significant• Order of segments was inconsistent - The third segment was usually the color

of the fixture, but not always.• Solver values were concatenated in the order of the User interface, separated

by hyphens. The cosmetic solution eventually led us into a more robust technical description of the configuration

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Making the Smartest Choice the Simplest ChoiceConfiguration Technology


Selecting the Configuration Technology

• First question – Do you really need a configuration technology?• Exploring the Options

• Predefined variant• Do you have products with more than four options in them?

• Dimension-based configuration• How many more than four options do your products have?• How do configuration choices affect Production BOMs?• How often do you add new products?• How does your engineering/product development department function?

• Constraint-based configuration• Accommodates greatest complexity of options• Allows attribute-based pricing

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Expanding the Intelligent Part Number

• Used Solver values to create the item's Configuration number

• This meant that we could use the Solver value for BI reporting

• Eventually added fields onto the Solver values that gave some entries identities different from the others.

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Why Use Configurations?

• Control – If sales is allowed to make parts at will, we can have engineering issues.

• Pricing - Attribute-based pricing supported through a configurator only.

• Discrete Part - Despite all of the variability, it's still really the same fixture. Whether it’s black or brown, has a full shield or half shield, or an 8' power cord or a 12' cord, it's still really the same thing to us.

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Thank you

• Nima Bakhtiary• [email protected]• http://www.twitter.com/NimaBakhtiary

• http://www.twitter.com/ArbelaTech• www.arbelatech.com

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mailto:[email protected]

http://www.twitter.com/NimaBakhtiary

http://www.twitter.com/ArbelaTech

http://www.arbelatech.com/

demand driven and configure -to- order manufacturing

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