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Beyond Kanban Orders: How Big Is the Conceptual Leap from Traditional to Lean SCM Using Microsoft Dynamics AX?

by Scott Hamilton
Consultant and Author, The Manufacturing Guild

Many  lean manufacturing practices -- such as work cells and the positioning of required material and resources at the work cells --  make common sense, whether you produce make-to-stock products (with a small finished goods inventory) or make-to-order products (from stocked or buy-to-order components).

The concept of kanban orders also makes good sense, but I've always wanted to "look under the hood" and fully understand how to make best use of the software capabilities in an integrated ERP system like Microsoft Dynamics AX to implement such concepts. Some questions about looking under the hood include:

- How can you use the different types of kanban orders to model the common and unique practices in different manufacturing scenarios? For example, how do you handle the different scenarios for subcontract manufacturing and custom product manufacturing?  

- What's different about the policies that define the behavior of a kanban order, especially in comparison to the policies for a purchase order, production order and transfer order?

- What's different - in terms of software capabilities - about supporting different maturity stages of lean manufacturing?

Answers to these three questions can help answer this key question: "Just how big is the conceptual leap from traditional to lean SCM?"  The question can be specifically posed about Microsoft Dynamics AX 2009, since the initial release supported just the traditional SCM practices, and a subsequent release included the incremental functionality to support kanban orders and lean SCM practices. 

Two previous books have described my prior research about these two releases, and the second book answers the three questions about lean SCM (in 200 pages with lots of diagrams).[1] One aspect of this prior research is worth mentioning, since it provides the ...

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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 365FO/AX, two textbooks about SCM/ERP, and 100+ articles in Scott has been a frequent speaker at Microsoft and user group conferences around the world, and a 10-time winner of the rarely given Microsoft MVP award.

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