Microsoft Dynamics 365 Business Central for Manufacturing

Business Central for Manufacturing is a good ally for business in the world of Industry 4.0. It helps manufacturing companies beat the competition and stay agile by offering multiple functionalities, such as real-time data, a simple user interface, and industry-specific modules.

Moreover, manufacturing companies are adopting lean manufacturing to improve profitability, enhance customer satisfaction, and reduce waste.

This is where you can utilize the powerful functionalities of D365 BC to fulfill varying requirements and deliver quality production at lower costs.

It empowers you to simplify the manufacturing process, automate repetitive tasks, and eliminate data silos.

Also, it streamlines the manufacturing process, improves operational efficiency, provides real-time access to critical data, and reduces operational costs.

In this article, we are going to learn about core benefits of manufacturing capabilities of Business Central and how we can avail them. Before moving forward, let's understand its basics.

Table of Content

What is Microsoft Dynamics 365 Business Central?

Microsoft Dynamics Business Central is one of the best ERPs for SMBs that comes with strong manufacturing functionalities. It enables you to streamline the entire business while boosting business efficiency.

Microsoft Business Central is flexible, offers integration and unifies all the data into a core business system that acts as a single source of truth.

Besides being a multi-language solution, it helps businesses manage their sales, supply chain, procurement, acquisition, marketing, finances, etc.

In the market, there are numerous manufacturing ERP solutions, but Microsoft Business Central is designed to tackle the challenges of all sorts of manufacturing businesses, including build-to-order, build-to-stock, and engineer-to-order.

Business Central Manufacturing Modules: Major Functionalities

Microsoft Dynamics 365 Business Central offers a comprehensive module for manufacturers to streamline their production processes. It is particularly available in the Business Central premium licensing plan for all businesses.

In this section, we are going to discuss some Business Central manufacturing module capabilities to know how it works.

Production Bill of Materials (BOM)

Manufacturing companies face challenges in managing Bills of materials (BOMs), such as managing thousands of components, creating new BOMs for every customized feature, communicating with the production floor, and inaccuracy.

These challenges can lead to production delays and material shortages, leading to a distorted supply chain.

Here, Business Central allows manufacturing companies to create a comprehensive BOM with production bills of material. You can specify raw materials and their quantities, allowing you to calculate standard costs.

Assembly Management

Manufactured product quality should be top-notch to maintain steady pricing and prevent product rejection. A distorted supply chain is another challenge of manufacturing companies that leads to production delays.

Microsoft Dynamics Business Central enables business to utilize assembly management.

It allows you to specify material lists, track components, maintain finished goods, promise delivery dates, monitor quality, capture customer requests, and customize products.

Microsoft Dynamics BC automatically creates an assembly order when you create a sales order line. Also, the assembly order module allows you to configure modules for "build to stock" or "build to order" products.

Standard Cost Worksheet

The more your business scales, the more difficult it becomes to manage inventory and maintain its standard cost. Raw material and labor costs are always fluctuating, so standard costs might not reflect real-world pricing.

Companies need to be flexible to negate the mismatch between standards and actual costs.

D365 Business Central offers standard cost worksheet functionality and a spreadsheet-like interface. It helps companies identify cost overruns and inefficiencies, allowing them to take corrective action.

Businesses can create a budget and set their financial goals by maintaining standard costs.

Basic Capacity Planning

Manufacturing companies work under duress of client expectations, such as increased delivery expectations, product visibility through digital workflow, and product customization.

Additionally, there are some internal challenges as well like resource allocation and seamless team collaboration.

Microsoft Dynamics ERP for manufacturing empowers organizations with basic capacity planning functionality, allowing you to make a system calendar.

You can include the required information in the calendar to ensure meeting customer demand.

This offers you a clear picture of the cost and resources required to fulfill the project.

Moreover, Microsoft D365 BC allows businesses to manage shift capacity. You can update the production schedule or change capacity according to demand forecasting.

Machine Centers

Manufacturing businesses face challenges in scheduling work due to changing customer demand, raw material availability, production process, and labor availability.

These things can make a simple manufacturing process difficult and doesn’t allow it to pivot quickly.

Work and machine centers help companies in their manufacturing process, allowing them to manage their machines digitally. By using machine centers, you can improve product quality and reduce production costs.

Moreover, you can store crucial information about manufacturing processes and access it effortlessly when you need it. Also, you can integrate IoT devices to keep track of machines and predict failure as well as maintenance.

Version Management

There could be various reasons why your company loses track of the production process. It can be a change in customer demand, limited raw materials, a change in invoice, and many more.

The Microsoft Dynamics 365 Business Central manufacturing solution provides a version management module. This allows you to manage project changes.

Version control records each file with its digital author, managing transparency and precision in the work.

This records the entire lifecycle of the file, from inception and revision to finalization.

Production Orders

Manufacturers should have the right material at the right time to remove shortages and surpluses. Without tracking them, it is challenging to understand the exact material required for production.

They also need to schedule production-based priorities and deadlines by considering the quality of each product.

However, quality demand can vary depending on the products. They need a system that can allow specific quality requirements, provide real-time insights, and offer a clear picture of material procurement and production processes.

Production Orders functionality in Business Central help manufacturers set the information for producing items and the quality conditions for manufacturing them.

Additionally, it offers an easy-to-use interface, allowing users to access the data with one click. Manufacturers can set various production orders using this module and identify the requirements for each order easily.

Finite Loading

It adds a layer to the production order module, optimizing the manufacturing process. The Finite Loading module helps manufacturers prevent overloading resourcing by considering the capacity of machines, labor, and materials.

If you overlook this, you can face various challenges during production, such as low quality, employee strain, and production delay.

The Finite Loading module in Business Central ensures that no more work is assigned to the expected execution capacity in a period.

How is Business Central Beneficial for the Manufacturing Industry?

Apart from unifying all the data, Business Central offers you extensive visibility into your inventory and stocks.

With Business Central, businesses can automate redundant tasks, avoid potential delays, provide timely responses to customer requests, and boost productivity.

Speaking of manufacturing functionality in Business Central, it includes assembly management, product bill of materials, basic capacity planning, production orders, automatic components, capacity consumption, and a lot more.

Now, let’s expand on the functionalities to learn how Business Central is beneficial for the manufacturing sector.

System Automation

Business Central can easily be tailored to business requirements due to its seamless scalability. Also, with the growth of your business, your automation needs and workloads increase.

In such a case, the integration of Power Automate with Business Central can effortlessly automate repetitive tasks and optimize processes. This solution can accommodate your ever-evolving business processes with its highly customizable options.

Production Planning

Production planning and scheduling are integral parts of the manufacturing process. This helps in meeting customer demand, maximizing resource utilization, reducing production bottlenecks,

and meeting the delivery commitments of customers.

Production order management helps businesses track their progress and schedule orders.

Demand Forecasting

With the help of the Demand Forecasts feature, users can create forecasts related to sales and production. This helps businesses create ‘what if’ scenarios so they can effectively plan for production to meet the diverse demands of customers.

This feature can make a significant difference in ensuring the utmost customer satisfaction by sharing the correct order fulfillment dates.

This demand forecasting can be done for multiple products. For instance, make-to-order businesses do not stock up on inventories. They start production when they receive orders.

With demand forecasting, businesses can gain insight into the turnaround time, which can help them fulfill orders accordingly.

Inventory Management

Business Central can help you track your inventory levels, stop overstocking, and streamline inventory operations. It will lead to a more cost-effective approach and enhanced cash flow movement with detailed warehouse insight.

The WMS (warehouse management system) for the Business Central suite includes:

  • Automated Data-Capture
  • Consignment Management
  • Courier Systems Integration
  • Cycle Counting
  • eCommerce Integration
  • EDI (Electronic Data Interchange)
  • Inventory Optimization
  • Multiple Locations
  • Serial Number and Batch Tracking
  • Stock-Unit Management
  • Supply Chain Management

Using the Supply Chain Management module, you can manage your entire supply chain and logistics.

The SCM module (Supply Chain Management) takes care of all aspects of supply chain management, such as order requests, merchandise purchasing, transportation, warehousing, shipping, and order tracking.

Real-time Insights and Reporting

Business Central provides real-time actionable insights into your business performances, trends, and analytics. It lets you gauge relevant data, charts, and KPIs (Key Performance Indicators) that are aligned with your preferences.

Besides that, you can also sneak into key minute details like filtering or sorting out the data and exporting it to Excel or Power BI (Business Intelligence) for additional scrutiny.

How to Avail Manufacturing Modules

Business Central provides three licensing options: Team Members, Essential, and Premium. All licensing comes per-user, but Business Central premium license is the one that offers Manufacturing module.

However, an essential license comes with limited modules, and businesses can access limited functionalities, like assembly management and the standard cost worksheet.

To get access to full manufacturing capabilities, you need to go for a premium license to avail yourself of all tools and capabilities.

If you want to experience how Business Central can work with your manufacturing company, you can also go for a Business Central trial. It is free for 30 days and can be extended to 60 days with the help of a Business Central partner.

If you facing issues getting the trial, feel free to connect with a reliable Business Central support, like Dynamics Square Canada.

How can Dynamics Square help you with D365 Business Central Implementation?

Dynamics Square is a renowned Business Central partner in Canada, with 150+ technical consultants and 14+ years of industrial experience.

We can help you with D365 Business Central implementation for manufacturing businesses so that you can improve your operational efficiency, maximize your revenue and get the most out of your investment.

Being a leading Business Central partner in Ontario (Canada), we are helping growing businesses to accept innovation, digitalization, and simplify their core processes.

In case of need, feel free to schedule a free Business Central trial with our experienced Business Central consultant.

You can write us an email at or Contact us for instant support.

Vivek Gururani

Vivek is a Digital marketing expert at Dynamics Square, specializing in crafting compelling content on advanced tech topics such as ERP, CRM, cloud computing, AI, ML, BI and more. His profound passion for the digital landscape has led him to explore and master diverse fields including SEO, SEM, content strategy, and data-driven marketing.


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