How to Master Manufacturing in Dynamics 365 Business Central From Basics to Demand Forecasting

Manufacturers often face numerous challenges, such as managing complex production processes, ensuring accurate demand forecasting, and optimizing resource utilization. These challenges can lead to inefficiencies, increased costs, and missed opportunities. Dynamics 365 Business Central offers a comprehensive solution to address these issues, providing powerful tools and features that streamline manufacturing operations, enhance productivity, and improve overall business performance. 

In this newsletter, you’ll learn: 

1. How to use basic manufacturing components and processes  

2. How to use manufacturing orders  

3. How to do manufacturing with Demand Forecast   

How to use basic manufacturing components and processes 

How to set up a manufactured item 

Switch to the Production Planner role in your settings if you haven't already.  

To set up your item, select the product design drop down > pull up your list of items > search for your item > select item to pull up item card.  

Setting up a manufactured item is similar to creating a standard inventory item, with the key difference being in the replenishment section of the inventory master.  

When you tell Business Central the item is a production order, you need to specify values in the production section of replenishment.  

To make the item, you need to specify how and when to make the item through the manufacturing policy, which includes the Routing Number, Production BOM Number, and Flushing Method. For details of this section, watch full video here. 

How to create a bill of materials for the item 

To make the item and its components, navigate to the production BOM list > locate the finished good > access its bill of material at the general level > describe what you're going to make such as the unit of measure used as the finished good output.    

With tracking version control, you can review archived versions to see how this item was built over time, noting any changes or substitutions in the line items. 

The production bill and material in line item 5 refer to a subassembly with its own bill of material and route. To complete the final product, at least one subassembly must be available. 

🛑 If you’re new here,don’t forget to click SUBSCRIBE (top right) to this newsletter to stay updated with monthly tips and best practices! 

⏯️ Watch full demo to learn how to create routing for this item and how to work with capacities.   

How to use manufacturing production orders 

There are five types of production orders and each serves a specific purpose in the manufacturing system. They are: 

1. Planned 

2. Simulated 

3. Firm planned 

4. Released 

5. Finished  

Planned Production Order 

Planned production order can be created directly from sales order or from planning based upon a forecast. To view the production order transaction for a planned production order, select production orders > select the item. 

The general tab lets you create the manufacturing production order, including the product description, quantity, due dates, responsible users, etc.   

Simulated Production Order 

The purpose for a simulated production order is for quoting and cost. If you’re doing research and development and want to know the estimates on new items or significant changes on an existing item this is the type you’d use.  

Note: Simulated type does not influence the planning of true production orders. MPS and MRP will ignore anything you have in simulated production order when it comes to planning or capacity. 

⏯️ Watch full demo to learn about the five different types of production orders.   

How to do manufacturing with Demand Forecast 

Basic Item Setup 

In this scenario, we’ll use an airpot. We’ve already set up the item’s Production BOM Number and Routing.  

To view the materials for that items, select the Production BOM Number. These items will be backflushed when production is completed.  

To view the routing, select the Routing Number. This will show you the machine centers the product goes through to be made. 

To create an entry from the production order to record the actual labor, use the Demand Forecast where you have the finished good item and the unit volumes for each month identified. 

Start with a blank planning worksheet 

Once you’re in the blank worksheet, select Prepare > Calculate Regenerative Plan > in this scenario we’ll calculate it out to a month > make sure to include demand forecast > Run MPS and MRP together to get suggested production order.  

⏯️ Watch full demo to continue.   

If you enjoyed this month’s Dynamics365 BC Pro Tips Hub, we would love it if you subscribed for more. Want more news and insights about Microsoft's Business Cloud solutions? You can subscribe to our email newsletter here. 

Learn about your two options to migrate to BC