Smarter Production, Leaner Manufacturing Operations: The Case for Dynamics 365 Finance & Supply Chain Management

Production delays. Inventory miscalculations. Inefficient resource utilization. These aren’t minor inconveniences for manufacturers; they’re critical barriers to profitable growth. How can you use technology to eliminate these headaches? 

Microsoft Dynamics 365 Finance and Supply Chain Management (F&SCM) is changing manufacturing production environments for the better. By integrating your production, warehousing, and financial processes, Dynamics 365 F&SCM streamlines production, reduces human error, and enhances collaboration. 

Dynamics 365 F&SCM Manufacturing Production Capabilities 

Microsoft Dynamics 365 F&SCM manages the core manufacturing processes of designing (BOMs and Routes), scheduling, manufacturing, selling, and delivery.  

Production Planning and Scheduling 

• Master Planning aligns demand forecasts, on-hand inventory, current orders, and resource availability to generate production orders and purchase orders. 
• Materials Requirement Planning (MRP) calculates net requirements based on current inventory and planned supply/demand, helping prevent over- or under-stocking. 
• Scheduling provides flexibility in how you model constraints, so you can manage lead times, bottlenecks, and capacity utilization. 

Bill of Materials (BOM) and Product Configuration 

With F&SCM, manufacturers can support complex assemblies and sub-assemblies, with version control and effective date management. An available out-of-box product configurator is ideal for make-to-order environments, which can create BOMs and routings based on customer needs. 

Shop Floor Control 

Dynamics 365 supports three production methodologies: discrete, lean, and process. As each step of the production process is completed, the production order, batch order, or kanban shows a change in the production status. Employees can register work and materials through mobile devices or terminals for greater visibility into labor costs. Kanban boards provide visual management for lean manufacturing, simplifying flow of materials and tasks. 

Resource and Capacity Management 

Manufacturers can leverage Work Centers and Resource Groups to model machines, labor, and tools based on availability, efficiency, and cost. They can also use Capacity Load and Utilization Tools to manage workloads and improve throughput. 

Inventory and Warehouse Integration 

F&SCM offers real-time inventory updates as materials are consumed and finished goods produced. It also supports advanced warehouse management for efficient movement of raw materials and finished goods through the use of integrated mobile device scanning capabilities. 

Quality Management and Compliance 

F&SCM supports quality control, with testing, quarantine, and disposition workflows. It also allows for serial and batch tracking. 

Cost Management 

Manufacturers can calculate standard and actual costing, with visibility into variances. WIP Accounting allows for real-time tracking of materials, labor, and overhead in work-in-progress inventory. 

Finance and Procurement Integration 

Transactions in production are reflected in the general ledger. F&SCM also ties vendor collaboration into production planning for sourcing raw materials just-in-time, with vendor portals for visibility and communication. 

Analytics and AI 

• Power BI dashboards make it easy to monitor key production KPIs like yield, scrap rate, OEE, and throughput. 
• AI/ML-powered demand forecasting helps manufacturers forecast more accurately for better production planning. 
• IoT integration allows for real-time monitoring of machines and equipment for predictive maintenance and efficiency tracking. 

Benefits of Using Dynamics 365 F&SCM for Manufacturing Production 

Unified, Real-Time Visibility 

In legacy setups, production data is often spread across disconnected systems. Dynamics 365 F&SCM changes that. It consolidates transactions and data into one environment so your teams see real-time production schedule information and inventory levels. These features enhance supply chain decision-making and your responsiveness. 

Reduced Manual Errors 

Manual processes are prone to mistakes. Human errors inevitably cost money and disrupt operations. But what if you could remove the potential for preventable slip-ups or inaccuracies in your business? Dynamics 365 F&SCM minimizes human errors by automating key aspects of production. D365 can utilize back-flushing principles on material inputs as well as labor (time) inputs; automatically adjusting on-hand inventory as finished products are made based on a predefined bill of materials (BOM).  

There may be some processes where manual materials consumption can lead to costly inaccuracies. For example, if an employee manually inputs the consumption of materials, it’s easy to incorrectly enter 55 instead of 5. This error, in real-time could affect downstream reporting. With Dynamics 365 F&SCM, you have the option of choosing automated inventory postings to help mitigate the risk of these errors but providing flexibility to make adjustments where needed.   

Improved Resource and Labor Management 

Manually tracking labor hours and resources is inefficient and error-prone. Dynamics 365 F&SCM offers precise tracking with an integrated Production Floor Execution interface. Workers are able to clock in and out of production jobs, automatically assigning hours to the production order. Ultimately, the tool improves workforce management and scheduling. 

Faster Onboarding and Lower Overhead 

New warehouse workers don’t need to master a complex ERP interface. Whether [you] choose the advanced WHS functionality or Skich’s Power App-based Barcode app, workers will follow the system prompts: scan, pick, put, repeat. This approach slashes onboarding time and reduces training costs. Even better, most warehouse roles only require a limited license to use the mobile app, which significantly reduces your total cost of ownership. 

Enhanced Cost Management  

Dynamics 365 F&SCM optimizes financial outcomes. The platform accurately tracks materials and labor, directly linking production tracking to financial reporting. It’s a great set of features that provides visibility into your actual production costs. Notably, the system provides flexibility at the order level. If necessary, you can manually adjust the consumption policy per order, allowing production to continue even if inventory records lag because of delays from receiving. 

Simplified Inventory Management 

Advanced warehousing features allow Dynamics 365 FSCM to simplify inbound and outbound logistics. Automated location directives and work templates guide warehouse employees through every step of the logistics process, from receiving and quality inspections to inventory storage and order fulfillment. 

This directed movement eliminates the guesswork and reliance on tribal knowledge, which often hampers efficiency. Employees can follow straightforward system prompts, drastically reducing training times while boosting operational speed and accuracy. 

Smarter Logistics 

Advanced warehousing features in Dynamics 365 F&SCM simplify the most complex inbound and outbound workflows. Work templates and location directives for inbound logistics automate how products move from receiving to warehouse storage. Items that require quality inspection can be flagged, routed through inspection zones, and only moved into stock once approved. 

Outbound processes benefit just as much. The system directs workers step-by-step to pick from a location, put to staging, and then ship. This functionality helps new employees execute tasks accurately and speeds up experienced workers with more efficient workflows. It facilitates fixed locations and automated put-away processes to reduce decision fatigue on the warehouse floor. 

Dynamics 365 F&SCM in Action 

Three case studies show how Dynamics 365 F&SCM has improved our clients’ manufacturing production environments: 

Planar is a global leader in display and digital signage solutions. The company partnered with Sikich to transition from an on-premises ERP system to D365 F&SCM. The migration enabled Planar to manage operations across the U.S., Asia, and Europe on one unified, scalable platform. The new system streamlined planning, manufacturing, procurement, and inventory processes. The impact on efficiency and collaboration was close to immediate. Sikich used stringent test cases and user training to facilitate a smooth transition that lessened production downtime. Read the full case study. 

MCIA, an aerospace industry player, partnered with Sikich to modernize its systems by adopting Microsoft Dynamics 365 F&SCM. This transition improved operational efficiency and productivity. The implementation facilitated better integration of business processes and enhanced the company’s ability to respond to industry demands. Read the full case study. 

Hamilton Company, a global equipment manufacturer, implemented Microsoft Dynamics 365 F&SCM with Sikich’s support to meet the surge in demand for laboratory and medical testing products. The new ERP system enhanced operational efficiency, improved inventory management, and streamlined financial processes, enabling Hamilton to scale operations effectively during a critical period in their growth. Read the full case study. 

Take the Next Step with Sikich 

Sikich’s HeadSTART implementation approach accelerates your ERP deployment with pre-configured templates for common warehousing and production tasks, reducing project timelines and costs while maintaining the flexibility to customize as your business evolves. 

With HeadSTART, you can achieve a working prototype in just a few weeks, enabling your team to begin testing and refining processes early in the implementation cycle. This methodology reduces project duration by up to 50% and costs by nearly 25%, minimizing disruption to your operations.  

Contact Sikich today to learn more.