Hi,
Many of the kinetix servo drives have auxiliary inputs for an encoder.
The easiest and best solution is to use this input.
This way you can create a virtual axis and select the auxiliary input from the drive, like you would select the drive on a normal cip axis.
The "harder to get working" solution is to create a virtual axis and then using 2 MAM instructions to move the virtual encoder to the position of your encoder input in each scan cycle.
There is an AOI called AOI_Flex_gear which can do this for you... I have never used it in a real life application, so i cannot be of any help if you run into problems.
I belive to remember it is part of the "machine builder library" that you can download from their website.
If you are not used to work with motion, i would deffently suggest going the easy route and using an auxiliary input on a drive.