item type formula

In this blog, I will show you how to run process manufacturing in Microsoft Dynamics AX 7. There are steps from estimate to end to produce goods in AX 7.


Before running process manufacturing we need to configure the following prerequisite:

  • The item that we are manufacturing must be of type ‘Formula’.
  • The formula should exist in the system
  • Routes must be configured

Step by step approach for Process manufacturing

We are taking the example of Item P0001, from the Contoso data (USMF legal entity).

  • Go to: Product information management > Released products>Select item P0001. Click on edit> Engineering> Production type.

item type formula

  • Go to Production control > All production orders.


  • Click on the ‘New batch order’ tab and click ‘Create new Batch order’.

create batch order

  • Enter the item number that you want to produce, in our case its (P0001). Formula and route enable automatically because it is already created for Finished goods item, producing quantity you can enter manually or you can set it to any figure like below quantity is 200, to set producing quantity you need to select in from production information management, please see point 5.

create batch order with details


  • Fix Producing quantity for > Go to inventory management > released product> Manage inventory> default order settings > inventory tab> you will find standard order quantity.

default order quantity

  • For checking & creation formula and route is enabled for item or not. Go to inventory management> released product >engineering> Formula & route. Check below screen shot.

Formula and route

  • Estimate the production order.


  • Once, estimation is done, we can check estimated consumption and estimated amount for producing the finished goods. See the highlighted fields, the realized consumption is actual cost which will show data when you end the production order.

price calculation at estimated


  • Now release batch order.


  • Start the production order, when we start production order the required raw material is received from the warehouse to production for producing finished goods. And picking list journal and route journal posted to bring the cost and raw material from inventory to production.


  • Pick list and route card will now be posted with estimated consumption. We do Report as finished to record actual consumption of route and Pick list. At this stage we can revert production to created status. For report as finished see below screen.


  • After clicking on RAF the below screen will open, in the goods quantity column we can enter actual produce unit of Finished goods.


  • Once, RAF is done, we have the option to end the production order, after pressing end we cannot revert the production order for any change


  • After end production order the finished good quantity will be increased with 200 quantity and realized consumption also available for this batch order. See below screen shot for on hand inventory before production and after production.
  • Before producing item P0001on hand before producing

On hand after producing item P0001.

on hand after producing

  • Realized and consumption is enabled when we end the production order. Which shows the actual cost and actual consumption to produce finished goods. See below image.

realized cost


Key features of Process Manufacturing in AX7

Some of the key industry-specific features of Process Manufacturing Production and Logistics are as follows:

  • Formula management
  • Co-product and by-product planning and management, including allocating costs for unplanned co-products and by-products
  • Multi-dimensional inventory capability
  • Containerized packaging
  • Full visibility and partial visibility catch weight management
  • Batch attribute assignment, search, and reserve capability
  • Inventory batch management
  • First expired/first out (FEFO) and shelf life inventory management with the ability to set vendor-specific batch information
  • Commodity pricing management
  • Rebate and trade promotion management
  • Approved vendor set up and maintenance
  • Vendor batch detail set up and maintenance
  • Potency management
  • Batch balancing for potency formulas
  • Purchase pricing based on actual potency
  • Lot inheritance
  • Batch order sequencing


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