7. Active
Standard Potency
% Caustic
.
As less Quantity is
needed, more
Compensating
Quantity is required
As Potency
increases, less
Quantity of the Active
Ingredient
is required
Sodium
Hydroxide
Potassium
Hydroxide
C
Compensating
8. Active
Standard Potency
% Caustic
.
As more Quantity is
needed, less
Compensating
Quantity is required
As Potency
decreases, more
Quantity of the Active
Ingredient
is required
Sodium
Hydroxide
Potassium
Hydroxide
C
Compensating
9. Standard Potency
% Fatty Acid
Active
Compensating
OliveOil
As Potency
decreases, more
Quantity of the Active
Ingredient is required
As more Quantity is
needed, more
Compensating
Quantity is required
10. Standard Potency
% Fatty Acid
Active
Compensating
OliveOil
As Potency
increases, less
Quantity of the Active
Ingredient is required
As less Quantity is
needed, less
Compensating
Quantity is required
15. A batch of lower concentration (42.5%) has been selected
which results in a increased required quantity for the Active
ingredient.
When the Balance batch ingredients is clicked, the
Balanced quantity for the Compensating, Filler and other
ingredients are calculated.
16. A batch of lower concentration (42.5%) has been selected
which results in a increased required quantity for the Active
ingredient.
When the Balance batch ingredients is clicked, the
Balanced quantity for the Compensating, Filler and other
ingredients are calculated.
17. Pay Suppliers and value inventory based on the active ingredient quantity received.
Most common price calculation:
Price / Target Potency * Actual Potency received
50
Gallons
85%
Active =
$655.50
50
Gallons
82.5%
Active =
$636.22
50
Gallons
86.7%
Active =
$668.61
Price calculation may vary by
supplier and item
34. Example: Consumed inventory lots include these
attributes and shelf life
Shelf Life: Earliest Expiration date is 04/01/2013
Attribute Values: Unique attributes and values for each item and batch
35. Example: Batch for the formula item includes the batch
attributes and shelf life dates of the consumed raw
material batches
Inherits earliest expiry
date for consumed
batches
Inherits attributes of
consumed lots and their
respective values
Editor's Notes
Another feature is Production Sequencing. Often, manufacturers just need to apply some sequencing logic around particular attributes so that production can be processed in a manner to reduce changeover times and increase quality and efficiencies.[Click]
The final feature in this new set of enhancements for Process Manufacturing R2 is Lot Inheritance. Lots, or Batches as there are often referred to within Dynamics AX, may be defined as Shelf Life items that have different dates defined for identifying that the item would be Best Before certain dates or Expire on other dates. There may also be Batch Attributes or characteristics of the ingredients that need to be inherited or passed along to the produced items in manufacturing.[Click]
So, let’s explore a little deeper into each of these functionality areas and see how these features can be presented as a solution to many of the challenges that face process manufacturers today.[Click]
APICS describes potency as a measurement of an active material in a specific lot or batch which is normally expressed in the terms of an active unit.Under potency management, you have the ability to define the Type of each of the ingredients in the formulation.Typically, you would always have at least one active ingredient in a potency item.You might also have one or more compensating ingredients to adjust for the variation in the activity level of those potency items for which the compensating ingredient is adjusting.You might also have one or more filler ingredients that are used to adjust for differences in the overall quantities of the active and compensating ingredients.Then you would have all of the other ingredients that would not be adjusted based on the variations in the active, compensating or filler ingredients. These ingredients would have an Ingredient Type of ‘None’.When we have an Active Ingredient in a formulation it will have a standard level of activity or standard potency percentage. The quantity of the active ingredient will change based on the actual potency of the inventory batch or lot that is going to be selected to be included in that production batch. Usually, you would have a compensating item that will adjust for this variation in the quantity of the active ingredient. However, there may be a couple of variations in the behavior of those adjustments.[Click]
So, to take this concept in more detail we will describe exactly how these behaviors or effects react.We describe one behavior as being an Opposing Effect. For example, I have an active ingredient called Potassium Hydroxide, which has a potency of a specified Percentage of Caustic.The Compensating ingredient in this example is Sodium Hydroxide. There is a standard potency or activity level that is established for Potassium Hydroxide, such as 45 Percent. Changes in the potency level will change the inventory quantity that is required to achieve that same level of activity. The potency could be higher or lower than the standard, as long as it is within the standard limits defined for that potency item.So, if the Potency were higher than the standard there will be less of the Active Ingredient quantity that will be needed.As less quantity of the Active ingredient is needed, then more of the Compensating ingredient quantity will be required.[Click]
Likewise, if the potency was lower, more quantity of the Active ingredient would be needed and less of the Compensating ingredient would then be required.This Opposing Effect doesn’t have to be a one-to-one relationship. We have a Compensating Factor that allows the user to define the ratio of the compensating ingredient adjustment to the variation in the active ingredient.A Compensation Factor of 1.0 would adjust the Compensating ingredient pound-for-pound to the Active ingredient deviation.A Compensation Factor of 0.5 would adjust the Compensating ingredient 1 half pound for every pound of deviation in the Active ingredient.[Click]
We describe the other behavior as being an Complimentary Effect. For example, I have an active ingredient called Oleic Acid which has a potency of a specified Percentage of Fatty Acid.The Compensating ingredient in this example is Olive Oil. There is a standard potency or activity level that is established for Oleic Acid, such as 70 Percent. Changes in the potency level will change the inventory quantity that is required to achieve that same level of activity. The potency could be higher or lower than the standard, as long as it is within the standard limits defined for that potency item.So, if the Potency were lower than the standard there will be more of the Active Ingredient quantity that will be needed.As more quantity of the Active ingredient is needed, then more of the Compensating ingredient quantity will be required.[Click]
Likewise, if the potency was higher, less quantity of the Active ingredient would be needed and less of the Compensating ingredient would then be required.This Complimentary Effect doesn’t have to be a one-to-one relationship. Again, we have a Compensating Factor that allows the user to define the ratio of the compensating ingredient adjustment to the variation in the active ingredient.A Compensation Factor of -1.0 would adjust the Compensating ingredient pound-for-pound to the Active ingredient deviation.A Compensation Factor of -0.5 would adjust the Compensating ingredient 1 half pound for every pound of deviation in the Active ingredient.So a Positive Compensation Factor provides an Opposing Effect, where a Negative Compensation Factor provides a Complimentary Effect.[Click]
While a Compensating ingredient is not required for an Active ingredient, you can have one or more Compensating ingredients for each Active ingredient in the formula.Each of these Compensating ingredients can have a different Compensating Principle with a different Factor which can provide a different effect.[Click]So if the Potency is lower than the standard or target potency for the Active Ingredient the required quantity may be increased.[Click]With one Compensating Ingredient with a Complimentary Effect, the required quantity of this ingredient may also rise.[Click]With another Compensating Ingredient with an Opposing Effect, the required quantity of this ingredient may need to be lowered.[Click]Also, while a Filler ingredient is not required in the formulation, you can have one or more Filler ingredients in the formulation.Based on the net difference between the estimated total of the Active and Compensating ingredients and the actual quantities, that result will be applied to the Filler ingredients in a prorated basis.[Click]
This Batch Balancing function allows the production formula to be modified by easily selecting the inventory batches of the Active ingredients based on their current potency.This will automatically calculate the required inventory quantity of those ingredients.Once completed, the process will determine the required quantities for the Compensating ingredients and then the Filler ingredients and then update the batch production formula based on all of these adjustments.The Picking List is generated and populated with all of these quantities and inventory batches of the selections that have been made.[Click]
After the Batch Order has been started, the Batch Balancing menu option becomes enabled for selection so the desired batches of the Active ingredients can be selected and the other ingredient requirements calculated.[Click]
While the standard or base value of the potency for Potassium Hydroxide is 45%, a batch of a lower concentration of 42.5% has been selected which results in an increased requirement for that Active ingredient.[Click]
Once all of the Active ingredients have been selected, the Balance Batch Ingredients menu option is enabled to let the system calculate the required quantities of the Compensating ingredients.Once that is done, the Filler ingredients can be calculated and then all of the other ingredient quantities are defaulted from the Estimation.[Click]If the user is in agreement with the adjusted quantities the Production Formula can be confirmed and the Picking List generated with these batches and quantities.[Click]
Another feature in the Potency Management is the ability to influence the price paid for potency items.With Attribute-based Pricing, we can establish a unique formula as to how the price would be calculated. Usually the price would be dependent upon the actual potency or activity level that was received.One of the most common price calculations that is used in the industry is to take the unit price for the product and divide it by its standard or target potency and then multiply that result by the actual potency that was received.So, if we received 50 gallons of a potency item that had a standard potency of 85%, we would see the total price on the purchase order as $655.50. The unit price being $13.11.If that 50 gallons was received at a lower potency, say at 82.5%, then the total that would be paid for that receipt would be less – at $636.22 – about $12.72 per gallon.If that 50 gallons was received at a higher potency, say at 86.7%, then the total that would be paid for that receipt would be more – at $668.61 or at about $13.37 per gallon.This price calculation can be different for each item and for each supplier of that item.The calculation can also take other elements into account for the price calculation that could include the total quantity received or some constant value that might need to be applied in the calculation.[Click]
By adjusting the unit price and net amount paid for the receipt based on the actual potency of the material received the inventory value will reflect that actual level of concentration – depending on the costing method that is used for the item.Adjusting the price based on the actual concentration of the material received is required in many chemical industries where the potency fluctuates from batch or batch.This is also common in the oil and specialty chemical blending industries where the pricing is based on the percentage caustic, acid or other intrinsic efficacies. This is also a standard business practice for pricing precious metals.[Click]
During the Invoicing process of the purchase order, the adjusted price is applied to the inventory that was received – in a similar manner as when a supplier provides a discount based on a particular shipment.Margins for those materials that are then used or sold will use this adjusted value of that inventory – again, based on the inventory costing method used – whether that be standard costing, or weighted average, etc.[Click]
So, let’s explore a little deeper into each of these functionality areas and see how these features can be presented as a solution to many of the challenges that face process manufacturers today.[Click]
This feature provides the ability to sequence products on a resource that the planner would consider as a limiting or bottleneck resource in the production facility.The planner can define Sequences and Sequence Groups. The Sequences are often characteristics of the items that are used to identify how the planner might wish to sequence those products in production.Those Sequences are then ranked within Sequence Groups.The Sequences are assigned to Items and then the Sequence Groups are assigned to those bottleneck resources.A Sequencing principle is applied to the Master Schedule so the outcome will produce the expected results.[Click]
In Life Sciences and Pharmaceuticals instead of sequencing products by color it might be more important to perform a ‘safe’ sequencing where different products that look similar and configured so that they never follow each other. So instead of sequencing a white pill, followed by another white pill and a pink pill followed by another pink pill, the desired sequence might be White, Pink, White, Pink, to ensure that the products are not confused and packaged incorrectly.[Click]
With these Sequence Codes ranked within the Sequence Group in this manner, the planned orders generated by Master Scheduling will be sorted by Flavor first.So all of the ordres would be scheduled by flavor sequence (in this case - non-citrus to citrus)Pack type would be ranked next with all the Blister Packs sequenced first, followed by BottlesSo the overall campaign cycle will Flavor then packagingAt the end of the campaign cycle a single change-over and cleanup would be performed.[Click]
So, let’s explore a little deeper into each of these functionality areas and see how these features can be presented as a solution to many of the challenges that face process manufacturers today.[Click]
The Lot Inheritance feature is designed to automatically transfer the properties of selected raw materials batches to the finished good batches.This will allow key batch characteristics or batch attributes from the raw materials to be updated to the finished good along with any co-products that are produced from the batch order.Also, when the items are shelf life items, the earliest shelf life date properties of Best Before date and Expiry date can be transferred from the shelf life ingredients and updated to the finished goods and co-products.[Click]
When using chemicals,you can have raw materials that have many different batch attribute values such as Appearance, or Melting Point, and Solubility that need to be updated to the finished goods and co-products that are produced. By automatically transferring this information insures that it will be updated on the produced items and reduces the opportunity for human error.[Click]
In Pharmaceuticals, the attributes or characteristics may be Blood Type and this value would be the same for each of the finished goods, or Co-products produced.[Click]
With regard to shelf life, it is common where an assembly may contain several different items that may also have limited shelf life duration and the finished good item needs to be updated based on the earliest Best Before date and earliest Expiry date across all of the ingredients.In this example, the assembly would inherit the earliest shelf life date of the ingredients with shelf life durations.The system does not calculate shelf life dates based on the mixture of certain ingredients. It is simply taking the earliest shelf life dates across all shelf life ingredients in the formula.[Click]
In this example, we can see the values for the shelf life expiration dates for these two ingredients. The earliest shelf life dates will be updated to end item and co-products based on the setup configuration.[Click]The batch attribute values and shelf life dates will be updated to the end items and co-products based on the configuration on the formula ingredient.[Click]In this example, there are batch attributes that we have configured to update to the co-product and different batch attributes to update to the formula item, based on the batch selection activation that was performed on the formula.[Click]
When the finished good batch is reported from production, the batch inherits the earliest expiry date for the consumed batches as well as inheriting the attributes of the consumed lots and their respective values.This occurs during the Reporting of Finished production.[Click]
As you have seen, these Enhancements for Process Manufacturing R2 are applicable to many different process industries and can address those unique requirements using common techniques.To help these industries meet today’s challenges and requirements, these new generation of solutions will help them automatically calculate required quantities of batch ingredients based on potency variations, manage accurate inventory valuations based on actual potency of inputs and outputs, transfer key batch characteristics and shelf life information from ingredients to the manufactured products, and identify and execute production sequences that maximize efficiency and minimize downtown from changeovers. This will help manage that variability, improve production and resourceefficiency and maximize value. Gartner has identified Microsoft Dynamics AX as a leading ERP system for process manufacturers with broad and robust functionality, and delivering low TCO. These Enhancementshave succeeded in providing even deeper functionality and return for process manufacturers. [Click]
