7 Ways to Optimize Your Manufacturing Processes with D365 Business Central
- Peter Paquette
- 3 days ago
- 6 min read
How to streamline manufacturing & supply chain management with Business Central.
The need for efficiency and optimization is constant in manufacturing and supply chain management. Effective management of production orders, vendor agreements, capacity planning, and downtime can drastically improve a company’s bottom line.
The first step in optimizing your manufacturing and supply chain is to understand the key challenges that often arise, such as inventory control, production capacity, and machine downtime. Many manufacturers today face these challenges without a clear, unified view of their operations. Without this visibility, making timely and informed decisions becomes increasingly difficult. Having a modern ERP solution in place helps integrate and optimize all your processes and provides a comprehensive, end-to-end view of your operations.
For manufacturers, a cloud ERP system like Microsoft Dynamics 365 Business Central can provide the necessary tools to streamline operations and keep track of every detail from raw materials procurement to final product delivery. This blog post explores key aspects of manufacturing management and some of the ways that Business Central can help streamline processes to maximize manufacturing efficiency.
We'll have look into how you can:
Gain Visibility to Optimize Production
Visibility is essential for optimizing production schedules and reducing inefficiencies. Knowing when to conduct machine maintenance, adjust production runs, or change scheduling priorities can save significant costs. Here’s how Business Central can help:
1️⃣ Streamline Output Capacity Planning
One major challenge for manufacturing companies is output capacity planning. Many ERP systems assume infinite capacity without accounting for real-world limitations, which can lead to unrealistic expectations. Understanding your machine and labour capacity is crucial for effective planning. With the right visibility, you can also optimize your production runs by grouping similar orders. For example, if you have two production orders that require almost identical machine setups, you can reduce your changeover time. This helps increase machine uptime, which is directly tied to profitability, as machines that are running make money.
Business Central offers detailed insights into your production capacity, helping you manage and track production order timelines, and giving you the ability to prioritize and adjust production based on order urgency or material availability.
2️⃣ Manage Maintenance and Downtime Effectively
Unplanned downtime can be costly—not only with repair costs but with lost production time and it can also erode customer trust. Business Central can help you manage this by giving you visibility into upcoming production schedules and identifying when planned maintenance should occur to minimize disruption. You can also act proactively to prevent unplanned repairs by integrating real-time monitoring and maintenance. Being able to spot trends in production data – such as irregularities in output or higher-than-normal scrap rates – you can predict machine failure before it leads to a shutdown.
Manage and Track Costs Easily
An efficient supply chain isn't just about moving products from point A to point B; it’s also about managing costs and cash flow. Business Central allows you to track costs in real time, including everything from raw materials to labour and machine wear. Keeping track of your manufacturing costs can lead to better decision-making, especially when it comes to things like scrap rates, labour efficiency, and subcontractor pricing.
3️⃣ Track Production Costs & Scrap Rates
Scrap and offcuts can significantly affect your bottom line. For example, if a production run is yielding more scrap than expected, you can quickly identify this issue and act. Perhaps the machine is running below the expected efficiency, or the raw materials used aren’t meeting the desired quality standards. With Business Central, you can track the expected versus actual material cost for each production order, helping you identify inefficiencies or constraints early. You can track things like the expected cost of production, your set-up time, run time, and overhead and see the fluctuations.
4️⃣ Track Subcontractors & Vendors
Another financial insight that Business Central can provide is tracking your subcontractor's pricing over time. If you're outsourcing certain parts of your production process, it's essential to keep an eye on how costs fluctuate. If you notice that a particular subcontractor has increased their prices significantly over the past few months, you can analyze whether it's time to look for other options or negotiate better terms. Business Central also helps you maintain visibility in your vendor agreements and make adjustments as necessary, ensuring that you’re always working with the most advantageous terms. It simplifies tracking of vendor performance and material deliveries to make the negotiation process easier and more data-driven.
Streamline Your Processes
Implementing a robust ERP system like Business Central enables you to consolidate various aspects of your business under one roof, eliminating the need for separate systems or manual workarounds. The cloud ERP solution helps streamline processes like inventory management, order processing, production planning, financial reporting, and more. We’ll highlight the top two here.
5️⃣ Streamline Inventory Management
In many manufacturing companies, inventory data is often stored separately or requires manual updates in Excel. Business Central integrates inventory management into your entire supply chain, allowing you to track stock levels, manage storage capacity, and calculate storage costs directly within the ERP system.
For example, if you’re running low on a critical raw material, Business Central will alert you in advance, allowing you to place orders before stock runs out. This is particularly valuable in preventing delays in production, especially when dealing with materials that have long lead times or are hard to source.
6️⃣ Forecasting and Demand Planning
Business Central also provides tools for forecasting and demand planning, which are critical for understanding future needs and avoiding stockouts. If sales demand for a particular product is higher than anticipated, Business Central helps you adjust your production schedule accordingly. It provides real-time data, so you can make faster, data-driven decisions about adjusting purchase orders or shifting production priorities.
Asset Management and Long-Term Planning
Asset management is another vital part of manufacturing. Machines, equipment, and production lines age over time, and operating costs increase as they require more maintenance. Business Central helps you track these assets, from their purchase cost and operating expenses to maintenance schedules.
7️⃣ Simplify Machine Lifecycle Management
Let’s say you have a machine that’s 25 years old. Its efficiency is decreasing, and repair costs are increasing. At some point, it will become more cost-effective to replace it with a new, more efficient machine. However, a machine replacement isn’t just about the upfront cost. You need to consider factors like training your workforce on new technology, adapting to new software interfaces, and maintaining the machine with more specialized knowledge. By keeping detailed records of your assets in Business Central, you can plan for future replacements or upgrades well in advance.
Key Takeaways
For manufacturing companies to thrive in today’s competitive landscape, they need a comprehensive, agile, and transparent supply chain system. With the right ERP system in place, you’ll be able to navigate the complexities of manufacturing and supply chain management with ease. Business Central helps you achieve this by offering real-time visibility into your production processes, costs, inventory, and supplier agreements. The more you know about your operations, the better positioned you’ll be to optimize your workflows, manage risk, and increase profitability.
Looking to Get Started? Kwixand Solutions Can Help
Kwixand Solutions is a Dynamics 365 Partner that helps businesses in the US and Canada digitally transform. As your implementation partner, our team works closely with you to assess your current operations, identify your needs and wants, and help you prioritize them in alignment with your business goals. Whether it’s standard Business Central functionality or custom extensions, we’ll help you find the right balance and implement a solution that works not just today, but as you scale in the future. Book a free consultation with our team today to get started.
About the Author: Peter Paquette, Supply Chain Solutions Engineer at Kwixand Solutions, is a Certified Supply Chain Professional (CSCP) with over 30 years of expertise in operations, production, and material planning. He is also certified in Planning and Inventory Management (CPIM) and as a Dynamics 365 Business Central Functional Consultant.