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Lean Manufacturing in Dynamics AX 2012

I recently spent some time digging into Lean Manufacturing in AX 2012, so I thought I’d post a few notes and some information about lean concepts in AX 2012. Overall, I think it looks great and appears to work well in mixed mode. You can use lean kanbans and production orders even within the same bill of materials.


Here are a few high level concepts that help describe lean functionality in AX 2012:

Production Flow –

  • For those familiar with previous functionality with Dynamics AX discrete manufacturing (production orders), you could compare Production flow to a Route, although there are significant differences.
  • The production flow contains activities performed by Work Cells. Activities can either be transfer (move inventory) or process (value add) activities.
  • You define all of the possible sequences for those activities by defining predecessors and successors for each activity.
  • A production flow could contain all activities from the very first on the lowest level semi-finished item, all the way up to the final activity on the finished good.
  • On each activity, you determine whether inventory is picked or produced. You have the option to do neither. An activity can simply be continuation of WIP.

Kanban rules

  • This is where a series of activities from the production flow are assigned to an item (semi-finished or finished).
  • That specific series of activities is referred to as a kanban flow.
  • The kanban rules determine how and when AX will generate kanban orders to replenish demand. The options are
    • Event-based(automatic or periodic)  - Sales line, BOM line, Kanban line, Minimum, Stock replenishment
    • Scheduled (via MRP) – using standard MRP rules and logic
    • Fixed quantity – Always maintain static number of active kanbans


  • As far as AX is concerned, I just view a kanban as an order. You process the kanban in order to satisfy the demand from which it was created.
  • There is a kanban board for both process and transfer jobs. There is a separate board for each work cell. It’s a clean and friendly user interface. You can simply select the job and mark it as complete, or you can record a start and a complete, pick raw material, etc.
  • There’s also a separate scheduling board where jobs can be moved around (drag and drop). It’s much nicer than the gantt chart.


A few key discoveries

  • Circular flows are not allowed
  • Alternative activities require multiple kanban rules. Example – if your second activity is subcontracted, and could be done by several different vendors, you would not be able to start the first activity, then select which vendor is going to do step 2. You’d have to either know before starting the first activity, or set up your flows such that the subcontracted activity is a new kanban rule, separated from the first activity. That way, you could choose an alternate vendor (kanban rule) before the 2nd activity is started. I may post a separate entry on this topic if there is interest.
  • Any item managed by kanbans must be standard cost

Comments (4)
  1. Conrad Volkmann says:

    Hi Cody,

    I would suggest that you solve your issue with the alternative kanban rules by running the first activity on a separate scheduled or fixed quantity kanban rule, and then have 2 alternative kanban rules for the subcontracted activities. This way you are not blocked to change the vendor.

    The exception to the standard cost rule is withdrawal kanban's (Kanbans that only exist of one transfer activity). These activities are cost neutral and can therefore be applied to any cost accumulation method.

    Maybe you could also add a link to the 3 lean whitepapers for further reading.

  2. Michael says:

    Hi Cody,

    Is there a way to setup supplier managed kanban card in AX 2012, so that when a bin in emptied, the kanban will trigger the replenishment of that material by the supplier?

    Thank you.

  3. Steve says:

    Interesting concept about the alternate vendor after starting an activity.

    Perhaps you can elaborate for me in the future. Right now I'm wondering if you know anything about autoruns for MRP. Currently MRP runs at 4 different times, because we set it up for one thime, then changed that tim to another time…we did this four times and our settings say only one time to run MRP (last time entered) but when looking at the session logs, it has run MRP 4 times (all the previous times are still "scheduled" and they run everyday). We are using AX 2012, any idea how to kill the other runs??

  4. Buen dia, aqui les dejo información importante que se ha posteado en otros blogs: http://blogs

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