The 5 Most Powerful Manufacturing Capabilities in Dynamics 365 Business Central

Manufacturing today goes through fast changes. Orders change at the last minute, supply chains get delayed, and customers expect products quickly. If you’re still relying on spreadsheets or disconnected systems, it’s easy to fall behind.

A report by Deloitte found that 86% of manufacturers see digital tools as their top priority over the next five years. Companies using an integrated ERP (Enterprise Resource Planning) system can improve efficiency by 20–30%. That’s not a small jump — that’s the difference where you choose between struggling to keep up or running ahead of the competition.

In such scenarios Dynamics 365 Business Central for manufacturing can make a big difference. It’s not just for accounting. It connects your shop floor to your inventory, sales, and finance, so everyone works from the same data.

In this blog, we’ll go over five of the most powerful manufacturing features in Business Central, along with real examples of how they help businesses every day.

1. Production Order Management in Business Central

Production orders are the instructions for your factory. They tell your team what to make, when to make it, and what materials are needed.

With production order management in Business Central, you can:

• Create orders manually or have them generated automatically from sales or forecasts.
   
• Follow the progress of each order from start to finish.
   
• See real-time updates when something changes.

Example:
A small electronics manufacturer in Texas used to track production on spreadsheets. It took hours each day and mistakes were common. After moving to Business Central, order tracking became instant, miniming admin work by 70% and helping them meet deadlines more often.

Why it matters:
Everyone can view the same information, which means no mix-ups or confusion between sales, production, and inventory. You can also prioritize orders that matter most — like urgent jobs or high-value customers.

2. Material Requirements Planning (MRP)

If production orders tell you what to make, MRP tells you how and when to get the materials.

With MRP in Business Central, you can:

• See what’s in stock and what’s running low.
• Get automatic suggestions for what to order and when.
• Plan purchases based on supplier lead times.

Example:
A furniture maker in Canada used to get caught without enough raw materials. Now, with MRP, they get alerts about shortages up to two weeks ahead, giving them time to reorder. Downtime dropped by 25% in just a few months.

Why it matters:
No more last-minute supplier calls. No wasted money on overstocking. MRP keeps production flowing smoothly.

3. Capacity Planning

Capacity planning is all about making sure your machines and workers are scheduled properly. If one machine is overloaded while another sits idle, you lose time and money.

With capacity planning in Business Central, you can:

• See how busy each work center or machine is.
• It balance workloads so nothing gets overused or left idle.
• Spot bottlenecks before they slow production.

Example:
A plastics manufacturer in the UK found that some machines ran non-stop while others were barely used. Business Central helped them balance workloads, reducing overtime costs by 15% within six months.

Why it matters:
Balanced workloads mean less stress on your people and your machines — and orders get delivered on time.

4. Advanced Bill of Materials (BOM) Management

The Bill of Materials is the recipe for your products. It lists every part, material, and step needed.

With BOM feature management in Business Central, you can:

• Create simple or multi-level BOMs.
   
• Update them easily when components change.
   
• Link BOMs directly to production orders for accuracy.
   

Example:
A bicycle company in the US has over 500 product models. When they switched to carbon fiber frames for some models, Business Central updated all related orders and inventory records instantly, avoiding costly errors.

Why it matters:
Accurate BOMs mean less waste, fewer mistakes, and faster production when new products launch.

5. Shop Floor Control

Shop floor control lets you see what’s happening in real time during production. Workers can log tasks, report progress, and flag issues as they happen.

With shop floor control in Business Central, managers can:

• Track how production is going against the plan.
   
• Measure machine and labor usage.
   
• Fix problems quickly when they pop up.
   

Example:
A food processor in Australia added tablets on the shop floor so workers could log each step of production. Managers saw live updates, and their overall equipment effectiveness (OEE) improved by 12% in a year.

Why it matters:
You can’t fix what you can’t see. Real-time tracking means faster problem-solving and better efficiency.

Why Dynamics 365 ERP for Manufacturing is Essential

The Microsoft Dynamics 365 manufacturing features work together so all parts of your business are connected. From buying materials to shipping the final product, everyone works from one version of the truth.

Research from Aberdeen Group shows that manufacturers using connected ERP systems achieve:

• 97% on-time deliveries
   
• 23% lower operating costs
   
• 18% higher productivity
   

And since Business Central is part of Microsoft’s ecosystem, it connects with tools like:

• Power BI for reporting and dashboards
   
• Power Automate for workflow automation
   
• Teams for quick communication

How Dynamics Square Can Help

ERP setup can be tricky, especially for manufacturers with unique processes. Dynamics Square is a trusted Microsoft partner that has helped many businesses get the most from Dynamics 365 Business Central manufacturing.

They can help you with:

• Set up production order management, MRP, and capacity planning.
   
• Connect BOMs, shop floor tracking, and reporting.
   
• Train your team and provide ongoing help.
   

With the right partner, you’ll avoid costly mistakes and start seeing benefits sooner.

Final Thoughts

The Business Central manufacturing module gives you everything you need to plan, track, and improve your production. Whether you run one small factory or a multi-site operation, it puts all your processes in one place.

In today’s fast-moving market, using outdated tools can hold you back. By using the manufacturing capabilities in Business Central — and working with certified Microsoft partners like Dynamics Square — you can set up Business Central hassle free and speed up production, reduce waste, and serve customers better. For tailored guidance, contact Dynamics Square UK today.

Your factory is the heart of your business. With the right tools, it can also be the reason you lead your market.

FAQs

1. What can you do with Dynamics 365 Business Central manufacturing?
It lets you plan, schedule, and track production from start to finish. You can manage materials, handle work orders, check capacity, and keep your shop floor running smoothly, everything using one system.

2. Does Business Central work for small and medium manufacturers?
Yes. Whether you make custom furniture or run a mid-sized electronics plant, the Business Central manufacturing module can scale to fit your needs. You can start simple and add more features as you grow.

3. How does production order management in Business Central help?
It keeps all your jobs organized. You can create production orders, assign resources, track progress in real time, and make quick changes when things don’t go as planned.

4. Can I run Dynamics 365 Business Central manufacturing in the cloud?
Yes. Many businesses use the cloud version for easy access from anywhere, automatic updates, and lower IT costs. There’s also an on-premises option if you prefer to keep everything in-house.

5. Why work with Dynamics Square for manufacturing ERP?
They know how to set up Business Central for real-world manufacturing challenges. From configuring production orders to integrating tools like Power BI, they make sure your system works the way your factory works.