Reduction key fixed month in Dynamics AX

The Reduction key is the period table for forecasting and master planning.

Most companies forecast in monthly buckets, a few get down to weeks, and I worked with a company once where the forecast was loaded in for every 2 weeks. Once the forecast is loaded, the typical process is that sales orders are netted off against forecast. If we’re going to do that we need to know which forecast relates to which sales order.

Dynamics AX master planning uses the Reduction key table. That was the only option in AX 2009. There’s a setup option on the Master plan:

Both the ‘Percent’ and ‘Purchase/sales order’ Reduction principle are driven by Reduction keys.

But AX 2012 offers a fourth option ‘Transactions – dynamic period’:

‘Transactions – dynamics period’ doesn’t use a Reduction key. The forecast records themselves define the period – a forecast period starts on a forecast record, and ends on the next period.

But whenever a company tells me that they forecast in calendar months I still tend to use Reduction keys, because it’s a simple and robust setup for monthly forecasting.

The Reduction key is defined on the Coverage group. It’s an optional field, but don’t leave it blank or you will find that sales orders aren’t netted off against forecast (the demands are just added together).

Where did that Reduction key come from? Master planning > Setup > Coverage > Reduction keys:

As you can see there’s a Wizard. Click the button and step through the setup. Not much to do on the first screen except click Next:

The next form lets you define the length of your buckets (e.g. months); the number of buckets (periods or reduction key lines) you wish to create; and whether the periods have a fixed start date or start on the current date.

This week I learnt to leave the Opening date blank, and I normally set the number of periods so that I’ve covered the forward time horizon for master planning, with plenty to spare, (although really when you think about it, you really only have to cover the forward time horizon of your open sales orders, not forecasts):

On the next form you define the Reduction key ID and a Description:

Then we’re given a preview:

… and a summary:

And Finish creates the Key and the Lines:

Now for the clever bit. As I said, until this week I never used to leave the Opening date blank. I suppose I was conditioned by the AX 2009 demo data which looked like this:

And then I reminded everyone that the Reduction key setup Opening date needs to be re-set once a year.

But as you can see from my AX 2012 screenshot above – you don’t have to enter an opening date. Leave it blank and the system just uses 1^st January of the current year. Simple! But don’t setup the Reduction key with only 12 monthly periods, because that’ll give you issues as you get into December (or earlier if you have a long forward open order book).

Project forecasts for items and hours in AX 2012

Projects in Dynamics AX have come a long way – especially in the assignment of workers to projects. That’s not the topic of this post, but if you’re interested checkout the Technet Identify and assign qualified workers to projects [AX 2012] documentation, or download the two whitepapers: Microsoft Dynamics AX 2012 R2 – Resource scheduling in Project management and accounting and Worker resource scheduling in Microsoft Dynamics AX 2012 R3.

But we’re travelling back in time, to a simpler, earlier age, and we’re going to look at how we can use project forecasts for items and work centre (resource) hours.

I’ve looked at some of the various ways we can issue inventory to projects in an earlier post: Project production orders in AX 2012 R3. Forecasting the items that you’re going to issue to a project is simplicity itself. As in that earlier post I’m working in the Dynamics AX 2012 R3 CU9 demo Hyper-V image. In the USMF company I’ve gone to Project management and accounting > Common > Projects > All projects, and created an ‘Internal’ project

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As you can see, on the Plan tab we can create forecasts for Hours, Project expenses, Items, Fees and On account transactions. Incidentally, changing the size and order of these buttons is really easy – see this post. Click on the item forecast button and the familiar (well familiar to me anyway) Item forecast form opens. Click on the New button to create a new forecast:

The system immediately fills in the Forecast model and the Project ID. The default forecast model comes from the Project management and accounting parameters form. You define the default forecast model on the Forecast tab. All forecasts have to be entered into a forecast model. One forecast model is linked to a master plan, and that’s the one that will trigger ordering based upon your project forecast. Forecast models are setup at Inventory management > Setup > Forecast > Forecast models:

Here, I’m using a Sub-model to identify my project item forecasts (and keep them separate from my inventory forecasts). Master planning includes all sub-model forecasts in its calculations, but you can only have one level of parent forecast model and sub-model.

Back on the project item forecast form before I try to enter any forecast lines I’ll use the Inventory > Dimension display form to show Site and warehouse on the Overview grid. All forecasts have to be entered with respect to a warehouse. Now I enter my forecast model, a date (the date I expect to issue the item to the project) and an item number. When you enter the item number the system will fill in the default sales site and warehouse. Finally enter the quantity you plan to issue to the project. Then the system asks me to specify a project category:

Although it’s tempting to click on the Project tab on the forecast and enter the category, it’s smarter to go to the item and set the default category on the item:

This isn’t a mandatory field when you create the item, but well worth setting if you plan to issue items to projects.

Now we’ve got our item forecast – which we can also see at Project management and accounting > Common > Transactions > All project forecasts:

When I run master planning the Item Net requirements form shows the planned demand from the project:

This is all good, except that nothing really identifies this as a project item forecast (as opposed to an inventory sales/demand forecast).

The project Hours forecast form looks slightly different. When I click on the New button I again get the default project model and project ID, so I can enter a date and a category and a number of hours:

Next I’ll click on the Resource requirements tab and define a resource that will provide the hours:

Again this form looks familiar to me – I’m used to setting up the resource requirements on production order route operations like this. There are now (in Dynamics AX 2012) a lot of options for defining how the system can select resources during scheduling – but I’ll stick to the simplest, and assign a single resource (a work centre in old money):

Unlike the item forecast (which is processed by master planning as soon as it’s created) you don’t see the Hour forecast as a capacity reservation on the resource until you schedule the hour forecast. Click on the Scheduling > Resource scheduling button and the Scheduling form appears:

The ‘Scheduling’ parameters look a bit odd, but there are some familiar elements (if you’re used to scheduling production orders), the In/Out options are Forwards and Backwards, the familiar scheduling directions.

However one odd feature here is that the Scheduling date on the Scheduling form is used to schedule the hours forecast – even though the project date is mandatory when you enter the project hours forecast it isn’t used. I’m setting my scheduling date to 14/03/16 and clicking OK. The scheduling tab now shows that capacity reservations have been created by the scheduling:

You can see these on the Scheduling > Capacity reservations form:

Another form that looks familiar to me, from the resource you can see the same display:

And on the References tab you can see that these are Project capacity reservations:

You may have noticed that we’re in the Dynamic master plan – these capacity reservations are copied into the Static master plan the next time you run master scheduling and regenerate the master plan.

Two more things and then we’re done. Firstly, there’s a Line number on the General tab of the Project Hours forecast:

If you have more than one resource to reserve (and of course in a real example you might have) the reservations are made in Line number sequence.

The other thing is that the Edit button displays options for copy, update and delete:

There’s a similar form for the project item forecasts. Use the select button to select the forecast; select the update you want to perform; and OK to process.

There is of course another way to generate capacity reservations for your project and that it simply create an item forecast for a production item with a route – but this option (adding an hours forecast to your project and generating capacity reservations directly for the project) works well for project activities not directly related to production items (for instance plant maintenance, or new product development).