Manufacturing Management in Dynamics 365 Business Central
Plan production, manage bills of materials, optimize shop floor operations, and track capacity with manufacturing capabilities that are fully integrated with your financial and supply chain systems.
Integrated Manufacturing, Production Planning, and Shop Floor Management
Business Central Premium includes a complete manufacturing suite designed for discrete and process manufacturers. Unlike bolt-on manufacturing tools that run alongside your accounting system, Business Central’s manufacturing capabilities are natively integrated with inventory, purchasing, and financial management. Material costs, labor, overhead, and scrap flow directly from the production floor to your general ledger without manual journal entries, batch imports, or end-of-month cost allocations.
For mid-market manufacturers that have outgrown spreadsheet-based production tracking or that are running manufacturing operations outside their current ERP, Business Central brings production planning, execution, and costing into the same system that manages your finances and your supply chain. The result is real-time production cost visibility, accurate inventory valuation, and planning calculations that account for both customer demand and production capacity.
Manufacturing and Production Management Components in Dynamics 365 Business Central
The following financial management components come with Dynamics 365 Business Central:
Bills of Materials (BOM)
Define multi-level bills of materials that specify the components, quantities, and scrap percentages required to produce each finished or semi-finished item. Business Central supports production BOMs for manufactured items and assembly BOMs for lighter assembly and kitting operations. Each BOM can have multiple versions with effective date ranges, allowing you to manage engineering changes, material substitutions, and process improvements over time.
BOM management capabilities include:
- Multi-level BOMs with component quantities, scrap percentages, and unit of measure conversions
- Production BOMs for manufactured items and assembly BOMs for kitting operations
- Version control with effective date ranges for managing engineering changes
- Phantom BOMs for intermediate items consumed immediately without separate stocking
- BOM costing that rolls up component, routing, and overhead costs for standard cost calculation
Routings
Define manufacturing routes that specify the sequence of operations required to produce each item. Each operation specifies the work center or machine center where the operation is performed, the setup time, the run time per unit, the wait time, and the move time to the next operation. Routings support parallel operations, sub-contracted operations, and alternate routing versions.
Routing costs are calculated based on the capacity rates defined at the work center level. When a production order is released, Business Central uses the routing to calculate the expected capacity requirements and production time, feeding this information into the planning engine for capacity-aware scheduling.
Capacity Planning
Define work centers and machine centers with their available capacity, efficiency percentages, and operating calendars. Business Central calculates the capacity load for each work center based on released and planned production orders, showing you where your production schedule exceeds available capacity.
Capacity-constrained scheduling adjusts production order start and end dates based on available capacity at each work center, helping you set realistic delivery promises and identify bottlenecks before they affect customer orders. Shop floor calendars define working hours, shifts, and non-working days for each work center, ensuring that capacity calculations reflect your actual operating schedule.
Production Orders
Create production orders manually for make-to-order jobs, or let the planning engine generate them automatically based on demand. Production orders move through a lifecycle from planned, to firm planned, to released, to finished. At each stage, Business Central tracks the expected quantity, the components to consume, the routing operations to perform, and
the expected output.Production order execution supports multiple shop floor practices:
- Forward flushing: automatic component consumption posted when the production order is released
- Backflushing: automatic consumption posted when finished goods output is recorded
- Manual posting: production journals for consumption, output, and scrap with full cost traceability
- Subcontracting: send components to external vendors for outside processing and receive finished goods back
Subcontracting is supported for operations that are performed by external vendors. Send components to subcontractors, track work-in-progress at their locations, and receive finished or semi-finished goods back into your inventory when the subcontracted operation is complete.
Find Out More About Microsoft Dynamics 365 Business Central
For more information about Microsoft Dynamics 365 Business Central and how it can benefit your business, please call us at 1.855.MIGCORP (855.644.2677) or contact us
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