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Verified
Mark McCorry asked a question on 12 Apr 2013 5:29 AM

Hi All,

I have a question which is causing much debate with our AX2009 setup (manufacturing industry).

When creating a production route is it best practice to use the Quoted process time and resource qty and to measure performance on an ongoing basis by variance against the standard, or is it better to use actual process time and resource qty and get an absolute value which is measured against the business bottom line.

Currently we use actuals which is good from a capacity reservation point of view and maximising available capacity (we are below the quoted rates), however it means from a financial point of view we are using a variable rather than a standard model and therefore it is very difficult to measure variance.

I'm not sure if there is a correct answer to this, but would be interested in others opinions and set-up

Thanks

Mark

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Suggested Answer
Stef Rose responded on 12 Apr 2013 8:38 AM

Mark, I suggest you to use a real time process over manufacturing_production and you should use absolute_values entity to manage employee_productivity. First, understand that measuring such types and volume of datas require the entire production_modal to avoid overriding_system and to clearly measure employee_productivity  with valide datas. Plus, maybe you should consider revising route_sheet as task_system and create in production_modal a task_management entity over system and numeric commands, and a task_measurement to stop overrided_systems and to manage the rate_value of system_production. I must suggest you to implant line codes in format  command_entity and display these numeric command as described to employee_displaying information.

Good luck, you have a really potential of success when someone asking a technical question like this!

Stephane Rose

Private Advisor

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Verified Answer
Steven Weaver responded on 14 Apr 2013 9:29 AM

"Best practice" will depend upon your industry and your business I am afraid. There are many accounting reasons for statically costing and tracking variables, as there are for using actuals and tracking the fluctuations.

You are actually arguing against two concepts. You clearly like the accutacy the actuals gives you but then you want to see a variance - a variance against what exactly? This would be a standard cost traditionally.

What you could do is have both and hold a standard cost. However this would give you variance at FG level and next you will want the detail, so you start tracking a standard BOM and standard cost at component level, because variances can be caused by many reasons, but then when you get to this level your variance reporting is arguably standard cost so why not manage your costs that way?

In the implementations I have been involved in we discuss, with the financial controller/Director the options and how AX handled it in line with the AX processing of production. Then when they have the options they make the decision based upon what is best for them - which makes it difficult to advise a generic "Best practice" I am afraid.

Steve Weaver | Dynamics AX Solution Architect - UK | My Blog

This forum post is my own opinion and does not necessarily reflect the opinion or view of my employer, Microsoft, its employees, or other MVPs.

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Mark McCorry responded on 7 May 2013 10:08 AM

Hi All,

Thanks for your feedback and apologies for the delay in getting back. As you guessed this a conflict between the financial controller (my boss) and the production scheduling controller (me). In the end we have agreed that if we get the plan right the financial aspects should hopefully follow

Thanks again

Mark

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Steven Weaver responded on 7 May 2013 10:10 AM

Glad you got there Mark :-)

Steve Weaver | Dynamics AX Solution Architect - UK | My Blog

This forum post is my own opinion and does not necessarily reflect the opinion or view of my employer, Microsoft, its employees, or other MVPs.

Reply
Verified Answer
Steven Weaver responded on 14 Apr 2013 9:29 AM

"Best practice" will depend upon your industry and your business I am afraid. There are many accounting reasons for statically costing and tracking variables, as there are for using actuals and tracking the fluctuations.

You are actually arguing against two concepts. You clearly like the accutacy the actuals gives you but then you want to see a variance - a variance against what exactly? This would be a standard cost traditionally.

What you could do is have both and hold a standard cost. However this would give you variance at FG level and next you will want the detail, so you start tracking a standard BOM and standard cost at component level, because variances can be caused by many reasons, but then when you get to this level your variance reporting is arguably standard cost so why not manage your costs that way?

In the implementations I have been involved in we discuss, with the financial controller/Director the options and how AX handled it in line with the AX processing of production. Then when they have the options they make the decision based upon what is best for them - which makes it difficult to advise a generic "Best practice" I am afraid.

Steve Weaver | Dynamics AX Solution Architect - UK | My Blog

This forum post is my own opinion and does not necessarily reflect the opinion or view of my employer, Microsoft, its employees, or other MVPs.

Reply
Suggested Answer
Stef Rose responded on 12 Apr 2013 8:38 AM

Mark, I suggest you to use a real time process over manufacturing_production and you should use absolute_values entity to manage employee_productivity. First, understand that measuring such types and volume of datas require the entire production_modal to avoid overriding_system and to clearly measure employee_productivity  with valide datas. Plus, maybe you should consider revising route_sheet as task_system and create in production_modal a task_management entity over system and numeric commands, and a task_measurement to stop overrided_systems and to manage the rate_value of system_production. I must suggest you to implant line codes in format  command_entity and display these numeric command as described to employee_displaying information.

Good luck, you have a really potential of success when someone asking a technical question like this!

Stephane Rose

Private Advisor

Reply