Microsoft Dynamics AX 2012 R3 Inventory Status: Important Enhancement for Manufacturing Industries

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In an earlier article we introduced the inventory status functionality in AX 2012 R3 and showed a Quality order scenario to convert the inventory status automatically after an inspection. We now discuss some other scenarios that use the inventory status.

1. Rework scenario using inventory status

Dynamics AX never had specific Rework functionality. But you certainly could do a rework scenario as follows:With the new inventory status, this scenario can be enriched. Before we dive into that scenario, here is an important remark: If rejected parts can typically be reworked (or most of the time), we should not use the standard functionality of the “error quantity” at Report as Finished time because that will scrap the quantity immediately. We need to report our rejected quantity as “good” and then we can use the inventory status!

  1. In the Report as Finished screen below,  we avoid using the field “error quantity”, we click “Inventory/ Registration”.

If our order quantity is 5 and 1 has to be reworked, we split the order and click “auto-create” for both lines.In the bottom of the screen we modify the inventory status to “rework” for the item that was rejected. We probably would modify the warehouse location also to isolate the rework inventory from the rest. We Report the order as Finished. Now our inventory looks as shown below.2. We create a new production order for the item to be reworked, quantity is 1, inventory status “available”. (This is correct, this work order will upgrade the “rework” status to the regular “available” again)3. Remove BOM and Route number

4. After “Create” we are adding a manual line to the Prod-BOM for the same item in the rework status.5. We are adding a rework route

6. Processing this rework production order normally, we will end up with a reworked item in status “available” again,  consuming the item in status ‘rework’.

2. How to change the inventory status directly?

There are only a few ways to change inventory status directly using special WMS functionality. For the seasoned AX user who assumed the Transfer Journal could do this (it can change all the traditional storage and tracking dimensions without a problem!), the answer is no.As we see above, the transfer journal line does not allow any change in the inventory status. Then what are our options?

  • The WMS mobile client has a menu choice “status change” which can directly change the inventory status of a quantity of an item
  • The WMS warehousing module “periodic” section has two options:

The first one, “Inventory status change” is the least friendly.The new status we want is entered in this start screen. In the Select, we choose item number, existing status and location. It is un-necessary to enter the item number multiple times. After OK, when the system finds no problem, it does not send a confirmation message. (). WARNING: this transaction does not work for regular warehouses when you have different statuses in the same location. You will get the message below.The second menu choice “Warehouse status change” does exactly the same but in a much friendlier way. And… it works fine for regular warehouses also with one small hurdle: it won’t show a list of regular warehouses after selecting the site. You have to type in your warehouse code.An empty picklist for warehouses in site 1!After typing in your warehouse and indicating to which status you would like to change your inventory, you click on “Details” if you want to see what quantity we are talking about. If you are not interested in that, you can click “change status” right away.The details screen shows us the locations and the quantities. By clicking the “convert” box and then OK, the quantity will be converted.

ATTENTION: Regardless whether using WMS-enabled or regular warehouses, the system will not allow mixed statuses of the same item in one location. Although there is a parameter in the location profile that controls this, in the regular client we are not allowed to. It is a different – and very positive – story when using the mobile client, as you will see.NOTE: It should come as no surprise that we cannot change the inventory status of reserved inventory.

Using the mobile client Inventory status transaction, we can actually convert the status of a partial quantity in a location. The location should be non-license plate controlled. If it is, as shown below, we don’t get the opportunity to put in a quantity. We can only convert the full license plate quantity.If our location profile does not allow mixed inventory statuses, we will get the error below.So two conditions are required in order to convert partial quantities in a location, both controlled in the location profile:

  • Not license plate controlled
  • Allow mixed inventory status

Under these conditions, the process works fine. I can convert partial quantities of the same item in the same location!

3. What about refurbishment or remanufacturing?

In my experience with manufacturing companies that have a refurbishment or remanufacturing business, I found that a so called “item condition” is important requirement for their ERP system.

An item is either “new”, “used” or “refurbished”, with a different cost assigned to each. The inventory status we now have in R3 is not going to handle the costing difference. To address this requirement, a product dimension like size or color should be renamed and used.

However, the inventory status does allow functionality that would help refurbishment businesses quite a bit:

  • I can set up item coverage for an inventory status, triggering refurbishment replenishment orders, for example
  • I can set up sales prices (and purchase prices) for an inventory status.
  • The rework production order scenario would be used to create Production orders that create “refurbished” inventory from “used” inventory. The Production order BOM would contain the “used” item and additional “new” parts that would be replacements for worn out components. The BOM would also contain parts in “used” condition that don’t have to be replaced.
  • The Production Route would depend on the diagnosis of the used part, what it takes to bring to “as new” status again.
  • A configurator could be used to quickly create these BOM’s and Routings based on the answers to diagnostic questions
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