Operational Sites in Microsoft Dynamics AX 2009

As companies grow and operations are distributed across multiple geographic locations, there is a growing desire for shared business processes alongside processes that are tailored to the needs of specific parts of the business.

Microsoft Dynamics AX 2009 introduced multisite hierarchy and supporting features which enable customers to create multiple logistic entities, such as operational sites, associated with a single legal entity

The multisite functionality was added as optional functionality which could be used for customers that run Microsoft Dynamics AX 2009 with the Logistics license key activated.

Operational sites can be defined as follows:

The term site refers to a location at which a company has setup operations. As such, a site is a grouping of resources and warehouses that are operationally interrelated. A site may be spread across multiple physical addresses, e.g. in the same city, if the associated resources and warehouse are operationally closely connected, and if it is considered one physical location.”

From this perspective, an operational site can be considered the geographical location where items are stocked in warehouses associated with the site. In Microsoft Dynamics AX 2009, the warehouse always associated to a particular site when the multisite functionality is enabled.

In Microsoft Dynamics AX 2009, the calculation of cost for stocked items can be done separately per site, just as it can be done per warehouse, and most other inventory dimensions. The costing information (inventory value) is linked to the operational site implementation via the inventory transaction engines and the Inventory transactions records carry both physical and financial information.

In case the business has a requirement to calculate costs and run Inventory closing per different warehouses the recommendation is to assign different sites to each warehouse to complete a separate calculation of the inventory value for each warehouse.

In case business has a requirement to calculate cost based on all existing inventory transactions across all warehouses, the system can be set up with a single site. This site must contain all warehouses even if the warehouses reside at the different geographical locations from operational perspective.

The multisite activation feature was introduced in order to enable existing customers to gradually adopt the new multisite functionality and upgrade their existing transactional data one company at a time. Once the multisite functionality is activated, the new Inventory site dimension becomes active and mandatory and all inventory transactions are populated with an operational site value. The following document contains a detailed description of the multisite activation feature: Microsoft Dynamics AX 2009 White Paper: Multisite Activation

The “Multisite Active” parameter is part of the Inventory parameters in Microsoft Dynamics AX 2009 and it is used to identify whether the multisite functionality has been activated within a given legal entity

Since the release of Microsoft Dynamics AX 2009, Microsoft has encouraged customers to activate and use the advanced multisite functionality.

Operational Sites in Microsoft Dynamics AX 2012

In Microsoft Dynamics AX 2012 it has been decided to enable the multisite functionality for all Microsoft Dynamics AX 2012 users.

It was primarily to simplify the functionality in Microsoft Dynamics AX 2012. The previous versions of Dynamics AX provide the customer an ability to store items in unknown (blank) warehouses. Going forward, we want our customers to be more explicit about the modeling of their sites and warehouses and be explicit about where they stock their items.

Numerous incentives have led to this strategic decision and we would like to bring some of them to your attention.

Lower TCO for partner and customer customization

Today, our partners and customers need to develop and test dual code paths for configurations with and without multisite activated as part of their vertical and horizontal solutions. This carries additional cost and risk – particularly since the Microsoft Dynamics AX application continues to grow in size and scope. Also, the variability of product configurations to be upgraded is limited.

Operational sites are integral parts of the Organizational Model

Operational sites are integral parts of the Organizational Model that is introduced in Microsoft Dynamics AX 2012 and the Organizational Model features are most relevant if the multisite functionality is activated. With the continued uptake of the Organizational Model across the application, and the SCM features in particular, the concept of operational sites will be required. We might consider enabling more advanced scenarios where multiple legal entities can share the same operation site.

Summary

We are happy to offer more out-of-the-box functionality to our customers, while at the same time making a strategic investment in the foundation logic and functionality of our core application. The objective of this approach is to pave the way for strong and advanced functionality in the next versions of Microsoft Dynamics AX. This means that:

  • All new Microsoft Dynamics AX 2012 users will automatically benefit from the multisite functionality!
  • Existing Microsoft Dynamics AX 2009 customers must activate the multisite functionality before upgrading to Microsoft Dynamics Ax 2012. This is done with the Multisite Activation Wizard that shipped with Microsoft Dynamics 2009.
  • Customers upgrading from Microsoft Dynamics AX 4.0 will experience that the multisite functionality is activated during the upgrade.
  • Going forward, all customizations and partner solutions can safely take a dependency on site being enabled and active as the core inventory dimensions.
    • The Multisite Active parameter is removed from the Inventory parameters.
    • The inventory Site dimension is always active as part of the shared storage dimension group.
    • The Logistics license key has been merged with the Trade license key, which is a part of the basic Microsoft Dynamics AX offering.

Ievgenii Korovin and Dynamics Ax SCM Team

Disclaimer

All the information about AX 2012 posted here is a pre-release. Any feature is a subject to be changed before the release without notice.
This disclaimer is applicable to all posts about AX 2012 in this blog.