How to Use Dynamics 365 Business Central for Light Manufacturers

I want to show you why Dynamics 365 Business Central is a good fit for light manufacturers. We’re going to be looking at a number of ways to assemble goods with components that roll up to finished goods. And we’ll also look at an MRP process to see how easy it is to use for planning and execution.

Getting Started

So let’s get started. We’re going to look at an assembly transaction, which is a simple bill of materials. We’re also going to look at an assembly transaction that’s made in a sales order for an order. And then we are going to look at production orders, which is a full-blown manufacturing piece, but you can make it simple and I’ll show you a simple version of it. And finally, we are going to look at the MRP process, so you can see how easy it is to use MRP and execution and also planning.

Sales Order Overview

This is a sales order they have in my system. This is going to supply the demand for the assembly orders and also the production orders. So we’ve got 3 lines here. This first line, the conference bundle, that’s a pure assembly. The second line is an assembly that’s made to order. So we activated on this order. And then finally, we’ve got a production item down here. The Airpod 2024 is a production item, and we’ll take a look at how that looks in Business Central.

Reviewing Items in Business Central

So let’s look at the items next. I’m logged into Business Central as a manufacturing manager. So I’ve got a nice role set that really enhances the ability to work with the system from a manufacturing and assembly standpoint. So the first thing I want to do is look at some of the items. This is the first item on our sales order. It’s a simple assembly item. You can see that here. I’ll Scroll down. We get more information about the item and we can see right here, it’s an assembly item. That’s how I’m going to replenish this item in my inventory. It’s also an assembly to stock item. From a planning standpoint, the reorder policy is a lot to lot.

This is the second item on my sales order. This is another assembly item. It’s an assembly item that’s assembled at the time prior to shipment, so it’s not stocked in my warehouse. I put the components together at the time for the order and then ship it out to the customer. This is how this one is set up. You Scroll down a little bit, the replenishment is assembly, but the policy is assembly to order. This is also a lot for a lot from a planning standpoint. This is the bill of material for this assembly item. The first two components here are assembly items themselves. So this shows you that an assembly item can have sub-assemblies as well. You can see that right here. I also added some labor. This is going to be rolled up into the cost of this particular item. And this is the way that the assembly looks for this particular item.

And this is the third item on my sales order. This is a regular production item. I’m going to create this in the manufacturing process, but it’s a simplified version of it. So let’s take a look at this. If I Scroll down here, I can see that the replenishment system is for production order. I’ll go over to the right. The production order is the make to stock. I’ve got a bill of material right here for this item, and this one has no routing. Our routing is optional. If I want to use a routing, I can add that to add work centers and operations to a bill of material when I make it. So this is a simple bill of materials, no routing, and this is the bill of materials for this production item. I’ve got the components here, I’ve got the quantities per component. I’ve got that listed. So this is very similar to the Assembly bill of materials, has a little extra functionality when I add a router to it, but this is simple. I can use this in the system.

Running the MRP Process

The next thing I want to do is run an MRP process. The MRP process in Business Central is simple. It’s easy to do. I’ll go to this worksheet and pull up a planning worksheet. Let’s use this one right here. Right now you can see it’s blank. So what I need to do is I need to generate suggestions to purchase, to assemble. I’ll calculate the plan for this period of time. I’m going to create MRP suggestions for purchases, but also assembly orders and production orders. I don’t need a forecast. I’ll take that out and I’ll run it. And these are the suggestions from the MRP process. I’ve got three types of actions. I’ve got a production order to create. I’ve got three assembly orders. I’ve got a number of purchases right here. So what I want to do is take action on these items. I’m going to select all these messages here, and all that means are these are the items that I want from my MRP process to create transactions.

So let’s carry out the action messages. I’m going to create these types of production orders, these types of assembly orders, and these purchase orders. So now all the transactions have been created. Let’s go back now, look at them and we’ll execute them. So first of all, let’s take a look at our purchase orders. These are two purchase orders that were created from the MRP process. Let’s take a look at those. This is a standard purchase order in Business Central. I can turn this into an invoice by putting the invoice number here. I can post this. Let’s go ahead and post it. It’s going to take this item and put it in the main location. I’ll go ahead and post it. I can receive it and invoice it later if I want to, but I’m going to go ahead and receive an invoice at the same time, and I’ll go ahead and receive this one as well, and I’m done. Now I have all the components that I need to assemble those items in the manufacturer, the one item. So let’s take a look at it. The first thing we’ll look at is the assembly orders.

Assembly Orders

I’ve got four assembly orders that were created from the MRP process. The first one is the assemble to order. That’s the third line on my sales order. We’ll look at that later because this one can be posted automatically from the sales order. When the sales order is posted, you can see that it’s marked as an assembly to order. These other three we’ll look at and we’ll actually post them. So let’s go ahead and look at this one down here. Before we continue, if you like this type of content, the best way to support us and to help others find this content is to subscribe to our channel, activate the notifications, and share your thoughts in the comments section below. Thank you for helping us grow this channel. Let’s get back to the demonstration. This is an assembly order to make this conference bundle. You can see it’s got two components. I’ve got various quantities of those components, plus I’ve got some installation labor. I’m going to go ahead and post that, and that will create the finished good item, the conference bundle. It will relieve the components. And now I’ve got a new item in my inventory. This matches up with the sales order, so I’m ready to go for that particular item, and I’ll go ahead and post these other orders. So we are done with the assembly orders for now. So let’s go back to the role Center. I can see in this tile that I’ve got one plan, production order. This is the one that was created from the MRP process. Let’s look at that. This is the production order that’s going to create the finished good item, Airpod 2024. Here’s the line item here. This is the output. I’m going to create four of these. We can look at the components. These are all the components in this item, and this is the location where the components are going to be relieved from. As we can see here, we don’t have a routing for this item. We can add a routing if we wanted to. So with the production orders, it goes through a process. Right now this is a firm plan production order, so I’m going to move it along. So what I need to do is change the status. I’ll go up here. I’m going to change it to released. This has been moved to a new status. If I go back to the role center, I can see it in this tile right here. Let’s open that up. For this particular item, I used a backflush method to relieve the component items. I can also use a forward flush or a manual pick. You’ve got options how you want to do that. This is simple. I wanted to show you a simple way to do it. So what I’m doing here is I’m going to create a production journal. This is easy to do. It’s already made out for a quantity of four. I’m just going to post that. And now I’m basically done with this production order. So I’m just going to finish it off, change the status to finished, and I’m done. So I’ve done all the assembly that needs to be done and the production. Let’s go back to the sales order. The first line item is an assembled item. We already posted the assembly transaction for that, so that one’s ready to go. The quantity is sitting in the main location. The second line item is an assembly to order item. So let’s take a look at that. Here are the assembly to order lines. I’ve got the components and some labor on this. So right now, this is still sitting out as an assembly order in Business Central. However, it’s set up so that when I post the sales order, it will automatically close out the assembly order. I can do that automatically or I can do it manually. So I’m going to do it automatically. And the third item is a manufactured item. I use the production order to manufacture that.