Microsoft Dynamics Business Central for Manufacturing - A Viable ERP System?

Why Should we care if we can use Dynamics Business Central for Manufacturing?

Given the disruption of the past year, a lot of businesses are investigating ways to work remotely and in a hybrid work environment. There are a few technologies that manufacturing companies need to use that don't work well remotely. One of them is ERP systems. That's why we should care about Dynamics Business Central for Manufacturing.

If you are looking to replace an ERP system because you want to ensure it facilitates remote work, cloud ERP is where you need to look. My experience is almost entirely with what is often called "SMB" or Small and Medium Business manufacturers.

There are not a lot of good, modern cloud based ERP systems in the mid-market / SMB space. There are even less that really support manufacturing. That means that the best cloud systems are priced out of most manufacturers budget.

Oh, In case you are wondering, Microsoft defines SMB as businesses with less than 250 computers. That's a pretty large manufacturer.

What is Business Central?

In the simplest terms, Business Central is the new brand name for Microsoft Dynamics NAV. In all the ways that count this cutting edge new cloud based ERP is the old Dynamics NAV reimagined in the cloud.

Microsoft did not shirk on the technology either! They have a boat load of money, and they were willing to spend a lot of it on Business Central.

The full name of the product is Dynamics 365 Business Central. That 365 should look familiar, because it appears on Office 365, Microsoft 365 etc...

This does mean that Business Central is part of the same suite of products you might already be using for your Outlook email, Teams communication, Microsoft Word or Excel productivity tools. And yes, that is a big advantage to Microsoft. It doesn't mean that it will work in Manufacturing however - so that remains to be seen.

How does it compare with more traditional manufacturing ERP?

I recently wrote a blog comparing Dynamics Business Central for manufacturing with a pretty well respected mid-market pure manufacturing ERP called Infor Visual ERP.

I worked extensively with Visual ERP for almost 20 years (ironically I never sold a copy in all that time). I ran the firm that people who had trouble with the system came to for help.

When I migrated my business away from Infor Visual, I investigated a lot of products. I settled on Dynamics NAV (which later became Business Central) after significant research.

By 2014 we had started switching Visual ERP customers Microsoft Dynamics NAV manufacturing. There are a few small areas that Visual might do a bit better in. That is more than overcome by two main factors that make Microsoft Dynamics Business Central for manufacturing really shine.

Customizability

Dynamics NAV and now Business Central are extremely easy to program, which let us enhance it in ways you absolutely could not with Visual. It's so easy to program that we are essentially giving away "Missing" Visual features when we sell the product.

This customization let us plug any holes we found. It also allowed us to do the one thing Visual customers always cried about. We could make small, easily maintained, incremental changes. We could adjust the system to make it work better for the customer.

We avoided any kind of massive programming (although in my time I've seen other partners who didn't avoid the same). We focused on making really useful changes that allowed the customer to get rapid benefits. This made a huge difference to customers. It can be a game changer when a very small change saves staff hours every week.

Dynamics 365 AppSource Addons

 

https://canvas.usao.edu/eportfolios/1072/Home/Real_CBAP_Exam

https://canvas.usao.edu/eportfolios/1072/Home/Innovative_CBBF_Exam

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https://canvas.usao.edu/eportfolios/1072/Home/Advanced_CBSA_Exam

https://canvas.usao.edu/eportfolios/1072/Home/Innovative_CBSP_Exam

 

 

More or less related is the existence of addons for Microsoft Dynamics products.

When we first started selling Dynamics NAV for manufacturing, there was no AppSource. AppSource is like the Google Play store or Apple Apps store. It's a place to go and rapidly (in seconds really) install addons.

In the early days these addons existed, were certified by Microsoft, but did not exist in any central location. Today things are even better. With Appsource we can really enhance Dynamics Business Central for manufacturing. I mention a couple of those modules below.

Wait! I have to get Addons

<Let me rant here>

There are 2 schools of thought about ERP systems. You want to get a really good ERP system with: great accounting; inventory control; purchasing and sales; CRM; scheduling; shop floor execution etc...

Imagine you wanted to get a similarly priced personal item. Say you wanted to get a vehicle and a camping trailer. You went to 2 dealerships. A Ford and the other GMC.

In our fake and hypothetical Ford dealer they sell their F150 truck, with a Ford Radio, Ford Tires, and a Ford brand camping trailer. This specific ford's rims are totally custom and don't fit other makes of tires. Nobody makes a radio that fits their dash. The trailer is OK but not the best you've seen. The trailer hitch is custom built for their truck.

You have no choice. But wait! It's all in one warranty so if anything goes wrong you can blame them and they have to fix it!

GMC sells their big truck by itself. You can choose which tires you get, so you want Michelin tires. You can add a radio, and decide to get the more expensive but awe inspiring Bose Radio. They don't sell trainers, so you buy an Airstream.

You would never complain about GM not making their own tires or radio, and you would never want the Ford where you had no choice but to get what they sell.

Why do you want an ERP that forces you to get their proprietary versions of things instead of buying the best you can afford?

<End rant.>

Out of the Box Manufacturing Features in Business Central

Dynamics Business Central manufacturing capabilities are identical to what was in Microsoft Dynamics NAV manufacturing.

There are a set of core modules in the Essentials edition of Business Central. These include: sales orders, inventory and purchase orders; assembly management; jons (project accounting and management); and warehouse management.

Some customers use the Essentials version exclusively. It works fine depending on your mode of manufacturing (see below).

Upgrading to the Premium version adds extra capabilities. You get Bills of Materials; Routings; Machine and Work Centers; Capacity Planning; Production Orders and other purely manufacturing oriented features.

Premium also adds Service management, which is used in the Engineer to Order space quite frequently, but not often in regular manufacturing.

Detailed Features in Manufacturing - in the Premium Version

Production Order Management

Agile Manufacturing
Version Management
Inventory Planning
Demand Forecasting
Machine Centre Management
Capacity Planning
Finite Loading
Production Bill of Materials
Production Scheduling
Supply Planning
Modes of Manufacturing for Business Central

I tend to think of manufacturing ERP projects in terms of the mode of manufacturing being used. There are different definitions from different organizations (mainly APICS) but these are the ones I tend to see and my take on how good Business Central for manufacturing is for these modes.

Engineer to Order - ETO

This is my favorite. I worked at an ETO for a few years before starting my own business. Dynamics Business Central for Manufacturing includes a really powerful project accounting module called Jobs. Since ETO manufacturers are really project manufacturers, this jobs module is a solid foundation. There are a few additional addons that I strongly recommend (including one that we created) to make the fit even better.

Overall - Business Central for ETO is really good.

Make to Order and Make to Stock - Production Manufacturing

Make to Order and Make to Stock are usually two separate modes of manufacturing (and they are) but I combine them into one mode I call Production Manufacturing. The out of the box manufacturing modules that are part of Business Central Premium work great for these businesses. Many of them also want the addins that I list below - which are great extra features.

Job Shops

Job shops tend to come in the biggest variety and tend to actually not fit that well into either ETO or Production Manufacturing. I'd want to see the Job Shop to see whether it's more of a micro-production shop (very common - I call these "repetitive job shops") or whether it's more of a custom mini-project manufacturer like a light ETO.

These businesses vary a lot in what they make. A food co-packer is technically a job shop. So is a welding service business, a small machine shop etc...

Whatever the case, it is a good fit for Dynamics Business Central for manufacturing.

Process Manufacturing

Process Manufacturing is usually related to making one of the following:

Cosmetics
Chemicals
Nutraceuticals
Pharmaceuticals
Food manufacturing
Process manufacturing needs some heavy duty addons for Business Central to work properly. This is outside my comfort zone to be honest. The regulations and batch manufacturing processes are really unique. I have a few colleagues that I send these kinds of prospects to. Those addons for Business Central are extremely good, and handle this industry very, very well.

Graphics Arts Manufacturing

Print Manufacturing is it's own sub-type, really a form of either Job Shop or Production Manufacturing depending on what they make. These businesses don't work as well out of the box with Dynamics Business Central for Manufacturing. They usually fall into these categories.

Commercial Print (magazines, business carts, posters, flyers etc. - a real Job Shop)
Folding Cartons (think a toothpaste box, or cereal box. Can be production or Job Shop)
Flexible Packaging (these companies make the plastic bags you get consumer goods in)
Labels (could be a wine bottle label, or a shampoo bottle, or your aspirin).
Wide Format (think huge banners, giant photographs on walls in a mall etc.)
This mode of manufacturing has a really great addon for Business Central called PrintVis. PrintVis is a Print manufacturing MIS software addon that turns Business Central into arguably the best Print MIS in the market.

Add-ins Recommended by Me

My team has reviewed many addon solutions since we started working with Business Central for manufacturing. Here are our top choices:

InsightWorks Shop Floor Insights (SFI)

This is a manufacturing execution system for collecting job costing data (time), production reporting and materials use in real time. Comes with a nifty scheduling tool also.

InsightWorks Warehouse Insights (WHI)

This product is my favorite