How Chemical Manufacturers Can Use Microsoft Dynamics AX to Manage Co-Products

The production process for many chemical products often results in usable co-products or unusable by-products requiring disposal.  In some cases, co-products may be used as an ingredient in the next production run of the parent item.  Other cases may require planned orders for the parent item in order to satisfy demands for its associated co-product.  As a result, co-products have implications for formula definitions, cost calculations, master scheduling logic and production reporting in an ERP system.  This article focuses on the implications of handling co-products within Microsoft Dynamics AX, and an upcoming article will cover the implications of handling by-products.

The concept of co-products applies to chemical manufacturers and to other types of manufacturers.  For example, the concept applies to grading/sorting of agricultural products, cut plans for meat/poultry products, slitting of rolled products, cutting pieces of steel products, and the production process for life science products.  Illustrations within this article focus on chemical products.

To understand how Dynamics AX can support co-products, the explanation has been segmented into three major topics - the formula information with a co-product, master scheduling logic for a co-product, and production reporting for a co-product.  We'll start with a case study of a chemical manufacturing process with multiple co-products.  A separate book excerpt provides more detailed explanations about the additional formula information for co-products.

Case Study of a Chemical Manufacturing Process with Multiple Co-Products

A chemical manufacturer produces batches of various products that also result in co-products.  As shown in the following figure illustrating the formula for one product, the production process starts with a vessel containing a 1000 pound batch of ingredients, ...