How to Use Microsoft Dynamic 365 Business Central as a Procurement Manager

I want to show you how our procurement manager might use Dynamics 365 Business Central. We’re going to look at item approvals and vendor approvals and how that’s a workflow of functionality that’s built into Business Central. We’re going to look at demand forecast and also inventory forecast.

We’re going to look at planning worksheets and how to turn those into purchase orders, and we’re also going to look at an MRP process that involves multiple locations that are manufacturing items.

So let’s get started.

New Item Approval Process

The first thing I want to show you is a new item approval process that’s built in Business Central. It’s optional. You don’t have to use it, but it can be handy for adding new items to make sure that all the information is there and that new items are approved.

Adding a New Item

I’m logged in now as Alan. He’s a user that has access to a lot of the system, and what he’s going to do is he’s going to add an item. We’ll show you the item card, and he’s going to send that for approval.

This is my current item list. This is everything in my inventory. I want to add a new item. It’s easy to do. I’ll click on new. I’ve got some templates set up. I’m going to use this one here. It assigns a number. I can override that number if I want to, but I’m going to accept it and I’m going to add this item to my new inventory.

Requesting Approval

And here’s my new item. Now what I want to do is I want to send this through an approval process to make sure everyone sees this and that this new item is approved. So let’s go ahead and do that. I’ll just request approval. Once that’s done, I can look at outstanding approvals. I can see them here. This is approval right here. The approver ID is admin.

Currently, I’m logged in as Allen, so this goes to another user. Let’s take a look at that user. Now I’m logged in as an admin person, and I can see on my Role Center down here in this tile, I’ve got some approvals. Let’s take a look at them. Here’s a new item right here. I can take a look at the card. This is the item that we just entered. I can make changes to this, or I can go ahead and approve it, or I can reject it right from here. I’m going to go ahead and approve that now that new item has been approved for my inventory, I can go ahead and purchase it and sell it.

Vendor Approval Process

Next, let’s take a look at a similar vendor approval process. This is my list of vendors here. I want to add a new vendor. I’ve got this template as well. I’m going to use that. I’m logged in as Alan still. I’m going to add this new vendor and I want to get it approved to make sure that once I do business with this vendor that the accounting and finance team has seen this and they’re OK to go ahead and pay the vendor.

Requesting Vendor Approval

So I’m going to request the approval again, same process. There we go and I can see the outstanding approvals. It’s automatically approved by Alan because he’s in the approval chain and now goes to the admin person. Both of these approval processes took place with the workflow that comes with Business Central. There are a number of templates that you can use for your business. Another one that I see commonly used is for purchase orders. I can set up approval workflows for purchase orders and then specify the chain of approvals that that purchase order needs to go through the people and the dollar amounts before it’s good to go. So this is handy, It’s all in Business Central and you can easily use it for your organization.

Demand Forecast in Business Central

Next, let’s take a look at how demand can be represented in Business Central. Demand includes open sales orders, open requirements for stocking levels, but you can also add a demand forecast. Let’s take a look at it.

Demand Forecast for Furniture

This is a demand forecast I have set up for furniture. These are furniture items. In this forecast, I’ve got quantities for every month through 2024. You can see I also have different locations specified, so this is handy to make sure that I purchased the correct things for the right locations and get it there on a timely basis. So a forecast allows you to plan and execute your purchases for your tire organization. Here’s the furniture one here, but we’re also looking at another one. This is a forecast for a manufactured item. I’ve got levels in here for different quantities throughout 2024. I also have it specified by location and these locations are different. The first one there is a Three PL. This is just a distribution location. It receives all its product from the CMO, so the transfers will transfer the product from the CMO where it’s assembled and then send it to the Three PL. The other locations, West and Main, are manufacturing locations, so they will manufacture the product there as well. This allows us to set up different criteria for a specific item in different locations. It’s very helpful, especially if you’re doing heavy distribution and also manufacturing or assembly.

Inventory and Sales Forecasting

Next, I’m going to show you a short clip about inventory forecasting and sales forecasting that’s built in the Business Central. It uses another process. It looks at historical information and creates a forecast. So let’s take a look at that.

Inventory Forecasting

Let’s start out by looking at this item here in the item card. There’s a forecast window down here. You can see that fact window right there. And I already have a forecast set up and running in my system, but let’s take a look at how I did that. So what I’m going to do here is I’m going to just delete this forecast for this particular item. There it goes. And this is real handy. This gives me access to almost everything about forecasting in Business Central.

Let’s go back to this item here. There’s not a sales forecast available because I deleted it earlier, but we can run it for this item right from this page. So we’ll go to actions forecast. So we’ll update the forecast. And you can see here that this is a combination of those two methods that we looked at earlier. What’s nice about this is from the screen, you can change those time series methods and take a look at the results. So if I wanted to do that, all I need to do is go to forecast, forecast settings. I can select a different method here. Let’s just go with the ETS. I’ll save that. I’m back at the screen. This still has the old forecast in it, but let me run it again and you’ll see it change slightly.

Sales Forecasting

So now it’s moved up, it’s just using the one method and the forecast is a little higher. This is the sales forecast. I can also look at the inventory forecast and I can see I already have a problem.

Examining Transactions

Let’s take a closer look at one of the items I have in my inventory. I can look at the transactions for that item directly from the item cart. So let’s do that. Let’s take a look at this furniture item. And what I want to do is I want to look at transactions and get a sense of the value of this item from whom I can purchase it and if the value changes. So let’s go to value entries here. These are all my transactions in the system. This is a list view. It’s a common list view. And what’s useful about it is every user can modify it to meet their needs. So for example, I put a filter on here just to look at the purchases. So I’m just going to look at the purchases here. And then I have an analysis tool built right into the system. Let’s take a look at that. And what this is doing is sorting the entire list by vendor from whom I purchased the items. So what I can do is I can open these up. I’ll see individual transactions. We can see this is the vendor for vendor 20,000. I can also look at this vendor up here. I’ve got more purchases. I also see some variations in the price. So the advantage of this is I can look at the information in Business Central and get an idea of what the pricing is for the items that I’m purchasing. If I find a vendor that I want to go out to because I get good pricing, I’m going to go ahead and do this. So this gives me a tool to identify that information and gives me more information when I go out and talk to my vendors.

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MRP Process in Business Central

Next, I want to show you how easy the MRP process in Business Central is to use. It’s easy to use and execute transaction based on that information. So I want to run it right now. I’m going to generate the results right here. You can see the information I’m going to use. I’m using a forecast called Airpod. Airpod is an assembled consumer good. My company makes it. I want to see what I need to do in order to make that process easier. So let’s run it. So these are the results of my MRP run. What I like about this screen is I can filter it to get just the information I want. I can take action from the screen. So let’s take a look at it.

Filtering MRP Results

I’ve got a number of things that it’s recommending here. I’ve got product transfers here. You can see the transfers here. It’s also recommending production orders for things that I need to assemble, need to make in my organization. And I’ve got purchases. Purchases are what I’m interested in. So there’s a number of ways that I

can do this. I can filter it based on the purchases. Let’s do that. I’ll just look at purchases here and now I’m just looking at the things that I need to purchase. But I can also break this up differently. I may have vendors set up to different purchasers. I can do that as well. Let’s just take a look at by purchaser.

Filtering by Purchaser

In my purchaser code here, let’s take a look at the purchases that need to be made by Ben. There’s just two that need to be made, so it’s easy to do. I’ve got these items here. I can just select them as action messages. Once I’ve selected the action messages, all you need to do is carry out the action messages. Let’s go ahead and do that. These are the options I have. I’m primarily interested in purchase orders, and what this will do is make purchase orders of everything that I’ve selected. Let’s go ahead and do that. It’s now created those purchase orders and it’s in my system.

Filtering by Location

Another way to look at this is filtered by location. I can easily do that, and now I’m just looking at the MRP suggestions for the main location. This makes it much easier to deal with all that data that can be generated from the MRP process.

Personalizing the MRP Screen

What I can also do is in Business Central, I can personalize the way this screen looks. And what that means is I can rearrange the columns, I can add columns, I can take columns off, and it’s easy to do. All I need to do is go up here to my settings, go to personalize. I can move these fields, I can hide them. I can also add fields. If I hit plus field, I’ve got dozens of fields from which I can choose to put that on the screen. And what’s important is that these changes a user makes are only for them. All they’ll see is the changes that they make in their system. This makes the system a lot easier for each user to use for their own needs.

MRP Results for Multiple Locations

Let’s take another look at the MRP results from a different perspective. In this perspective, we’re going to look at the fact that we’ve got multiple locations that are manufacturing items that I will then send out to my customers. So let’s take a look at the full extent of the type of transactions that can be generated from MRP.

Production Orders

The first few lines here are production orders that are being suggested by MRP and they’re specific to locations CMO and West. These are both manufacturing locations in my organization. So this makes complete sense.

Inventory Transfers

If we scroll down a little bit, we can see these purchases are going to go directly to the CMO. I can change that if I want to. If I want to bring them into my own organization first do a quality inspection and then send them out to the CMO, I can do that. I also have inventory transfers being suggested by the MRP process. These are going to the three PL and location main. These are non-manufacturing locations. So this makes complete sense. Business Central will set up those inventory transfers and you can execute them as you want.

Purchase Orders

Finally, let’s take a look at the purchase order. This is a purchase order that was generated by the MRP process. Let’s take a look at that. These are all items being purchased by this vendor and they’re going to be sent to the West location. Again, this is a manufacturing location. They’re going to be looking forward to getting this information in. What I can do here is I can receive it in and then I can invoice it later. I can also add landed cost to this. It’s really easy to do. I can do it after this has been posted if I want to. So there’s a lot of flexibility in the purchase order. And as I mentioned before, I can also make this an approval process as well.

Conclusion

So we took a quick look at how a procurement manager might use Dynamics 365 Business Central. We looked at some approval workflows for item vendor and talked about purchase orders. We also looked at the demand forecast and we saw a little clip about the inventory forecast. We looked at planning worksheets and how you can use those in your daily work to make life a little easier for you and for the people that work for you. And finally, we looked at the MRP process in Business Central and how that can be used for multiple location MRPs, whether I’ve got CMOs that are making it for me, I’ve got my own manufacturing locations, or I’ve got just distribution-only locations. The MRP process is very flexible and can handle multiple locations.