Would Manufacturing or Assembly be better for your business?

If you have a large company producing a million widgets per year, you probably aren’t wondering about whether you should implement a manufacturing system, unless you have outsourced all of your production. If you have a small to medium-sized company that assembles a limited number of units per year in a small but critical division, you might be wondering whether an ERP manufacturing system is too much for your company.

The good news is the Assembly module available through the Microsoft Dynamics 365 Business Central platform gives you an excellent option for meeting limited manufacturing requirements while still leaving the door open for implementing Manufacturing later.

 

Manufacturing includes all the pieces you need

The Manufacturing module in Business Central is intended for “build to stock” or “build to order” and includes all of the primary pieces you would expect in a manufacturing system – production BOM (Bill of Materials), production orders, MRP (Material Requirements Planning), shop floor routings, and capacity planning. What it doesn’t have is a “drag and drop scheduler” or a configurator, but both features can be met through available third party products.

 

Assembly affords better configuration

The Assembly module also works for “build to stock” or “build to order” but actually works better if the product needs to be configured for a specific requirement. Users in the sales order module can bring up the assembly BOM for a SKU and change the requirements on the fly. The result is a custom-configured assembly order while preserving the original assembly BOM for the next order.

In contrast, users of the Manufacturing module either need to configure a custom production BOM or modify the production order, or sign up for one of the third party configuration tools. While the ability to custom configure an assembly order through the sales order module is pretty cool, the manufacturing configuration add-ons offer rules-based configuration options to control the combination of components. The configurator add-on’s are expensive and can be a lot of work to implement, which typically rules them out for smaller manufacturing needs.

 

Manufacturing offers options for inventory handling, scrap, and subcontractors

The consumption of parts and labor in manufacturing and recording of scrap and output are important components. There are many options in manufacturing for flushing parts to the production order including forward or backward flushing, including by shop floor workstations. Labor can be consumed through a consumption journal. Output can be recorded through the output journal. Third party outsourced activities can be managed through a subcontractor worksheet. Most of this can be automated but can be a lot of work to set up correctly.

 

Assembly is more flexible out of the box

By choosing an inventory SKU with an attached assembly BOM and specifying a quantity and quantity to assemble, the assembly order is automatically created within the sales order and can send directly to the assembly department, regardless of whether it is a standard or configured assembly BOM. The assembly BOM can include components, subassemblies, or other charges such as labor. Text notes can be added to an assembly order as default notes or by the sales order user. Partial quantities can be assembled at one time with the rest deferred to a later time.

 

Choose manufacturing if you:
  • need tight control over the shop floor including workstation capacities and scheduling resources
  • don’t need to configure your items during the sales process or have the budget for an expensive rules-based configurator, if you do need custom configurations
  • have complex MRP requirements with the ability to manage the timing of inventory purchases or manufacture of sub-components
  • need to manage scrap
  • assembly routings are important
Choose assembly if you:
  • want your sales people to easily configure items and related assembly orders on the fly without regard to formal business rules, i.e. all components have to utilize a four inch pipe
  • don’t care about shop floor management or capacity, or are willing to manage them manually from reports or a third party drag and drop scheduler
  • order items solely on committed demand, min/max’s, and inventory forecasts without any consideration of lead time
  • want something simple and fast to implement. Assembly can be used in conjunction with Manufacturing in the future.
  • have a limited implementation budget.

 

Both Manufacturing and Assembly are good options but fit into specific niches. Manufacturing has a few third party add-on products that can substantially improve certain functions in the product, but Assembly is easily modifiable, if necessary, for many situations.

Let’s talk about which module option, Manufacturing or Assembly, would be best for your business setup. Contact us for more information.

 

*New to CRM? Check out our previous blog here which compares Dynamics 365 Business Central CRM to Dynamics 365 for Sales. Learn which solution would work best for your Sales team. Hint: Business Central CRM for basic needs, Dynamics 365 for Sales for advanced needs.