Lean Manufacturing For Microsoft Dynamics AX

Agenda• Introduction• About lean manufacturing• How Lean Manufacturing for

Microsoft Dynamics® AX 2009 can help• Enable and sustain lean implementation• Provide a fast return on investment

• Demonstration• Questions

Difficult Global Market Conditions• Changing business climate• Plant and company

closures• Tight capital• Global competitors with

lower labor costs

Cost reduction and superior customer satisfaction are imperative for survival

Lean Manufacturing—More Attractive Than Ever• Proven focus on:

• Value creation• Waste (“muda”) reduction• Process efficiency• Continuous improvement

• Successful implementations yield competitive advantage

Adoption of Lean Practices

*Source: Demand-Driven Manufacturing. AMR Research Report, January 2007.

Continuous improvement techniques such as Six Sigma DMAIC

Value stream analysis to identify value/ non-value-added activities—

country cross tabulation

Lean replenishment strategies with suppliers

Lean manufacturing tools, such as kanban loops, takt times, and heijunka

Not using or evaluating lean manufacturing practicesSeries1 8%

43%

52%

53%

64%

Lean Manufacturing Principles• Do more with less…• …While providing customers with

exactly what they want, when they want it, at the cost they want to pay…

• … And increase market share and profitability

Five Lean Principles

1.Understand value from the customer’s view

2. Identify the value stream—and non-value activities (waste)

3.Create flow to reduce waste4.Pull production (rather than pushing it)5.Strive for perfection

Flow ImprovementFrom this…

Work in process

CNC Lathe Area

Tool Room

Job Reporting

Assembly AreaWelding Area

Sawing Area Lathe Area Drilling Area

Shop Floor Office Area

Inbound

Outbound

Job Reporting

Flow ImprovementTo this…

CNC Lathe Area

Tool Room

Job Reporting

Assembly Area

Cell 1

Lathe Area

Shop Floor Office Area

Inbound

Outbound

Job Reporting

Sawing/Drilling AreaCell 2 Cell 3

Welding Area

Lean Manufacturing Benefits

•Throughput time slashed by 75 percent

• Inventory reduced by 90 percent•Quality rejections down to zero•Delivery performance up to 99+ percent

•Productivity up 45 percent•Cost reductions of 50 to 70 percent

Lean Manufacturing ChallengesEveryone talks about lean, but few implement:• Requires commitment from shop floor to

CEO• May include false starts• “Proof of concept” means running mixed

modes or phased implementations• Information integration, access, and

analysis is crucial• ERP and Material Requirements Planning

(MRP) systems essential but need to promote process flow thinking

How Lean Manufacturing for Microsoft Dynamics AX Can Help• Achieve demand-driven

production• Drumbeat scheduling to “takt” time

• Improve production flow and leveling

• Increase replenishment efficiency

How Lean Manufacturing for Microsoft Dynamics AX Can Help• Free people for higher-value

activities• Support kaizen (continuous

improvement)• Business intelligence and insight

• Team collaboration tools

• Flexibility for ongoing change

How Lean Manufacturing for Microsoft Dynamics AX Can Help

Lean Accounting

Value Stream as Financial Dimension

Planning/Scheduling

LOS (Lean Order

Schedules)

Heijunka Board

Sales Pull Signals (Call

Off)

Purchase Kanban

Kanban and Pull-Based Execution

SubcontractingKanban

Barcodes

Organization

Cells Kanban

Sales Schedules

Transfer Kanban

Kanban Board

Kanban Inventory Overview

Takt Meter

Cost Substitution

Item

Lean Manufacturing Functionality

Integrated Sales, Purchasing, Financial, Collaboration, and Business Intelligence

• Sales-based scheduling• Heijunka board production leveling• Robust kanban functionality and options• Enhanced business intelligence• End-to-end integration and connectivity

to other Microsoft products, servers, and technologies

Lean Manufacturing for Microsoft Dynamics AX Functionality

Summary

• Achieve demand-driven production • Increase replenishment efficiency• Accelerate continuous improvement• Understand value streams, eliminate

bottlenecks, and identify improvement opportunities

• Free people for higher-value activities

For more information: www.leancentreofexcellence.com

Q&A

© 2009 Microsoft Corporation. All rights reserved. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.01/2009