Manufacturing Overview
Learn BOMs, routings, work centers, MRP/MPS planning, and the production order lifecycle in Business Central.
Learning Objectives
- Understand BOMs, routings, and work centers as master data
- Differentiate MRP and MPS planning worksheets
- Follow the production order lifecycle from Simulated to Finished
Overview
Manufacturing is one of the most robust modules in Business Central. It provides a comprehensive suite of tools to plan, schedule, and execute production processes. Manufacturing requires a Premium license.
Premium License Required
Manufacturing (MRP, BOMs, Routings, Production Orders) is only available with the Premium license tier.
Core Building Blocks (Master Data)
Before you can manufacture an item, set up the master data representing the "recipe" and "instructions":
Bill of Materials (BOM)
The list of raw materials and components and the exact quantities needed to produce one finished unit.
Example: A laptop BOM includes battery, motherboard, screen, and casing with specific quantities.
Routing
The step-by-step work instructions for production (e.g., Step 1: Assembly, Step 2: Laser Etching, Step 3: Quality Check).
Work Centers
Physical locations or machines where work takes place. Work Centers track:
- Labor Costs — Human effort costs
- Machine Costs — Electricity, maintenance, depreciation
- Overhead — Indirect operating costs
- Capacity/Scheduling — Available hours and shifts
Planning the Work (MRP & MPS)
| Worksheet | Purpose |
|---|---|
| Requisition Worksheet | Primarily for buying components when inventory drops below safety stock |
| Planning Worksheet | Comprehensive planning — analyzes sales orders, production orders, and inventory parameters |
Within the Planning Worksheet:
- MRP (Material Requirements Planning) — Calculates demand for raw materials and sub-assemblies
- MPS (Master Production Scheduling) — Calculates demand for finished goods based on sales and forecasts
Production Order Lifecycle
| Status | Description |
|---|---|
| Simulated | Quoting and "what-if" scenarios — no planning impact |
| Planned | Generated automatically by planning system |
| Firm Planned | Draft order confirmed by planner — scheduling placeholder |
| Released | Active on shop floor — materials can be picked, costs recorded |
| Finished | Completed and closed — costs move from WIP to Finished Goods |
Recording Usage (Journals)
Once an order is Released:
| Journal | Records |
|---|---|
| Consumption Journal | Quantities of raw materials used |
| Capacity Journal | Setup time, run time, and labor |
| Production Journal | Both consumption and capacity simultaneously |
Flushing Methods
| Method | Behavior |
|---|---|
| Manual | Users manually enter exact quantities consumed |
| Forward | Auto-posts expected consumption when order is Released |
| Backward (Backflushing) | Auto-assumes BOM/Routing quantities when operation finishes |
Key Financial Concepts
- WIP (Work in Process) — Accumulated costs (material, labor, overhead) on the balance sheet while production is active. Transfers to Finished Goods only when the order is finished.
- Subcontracting — Send components to external vendors for specific routing steps
- Item Tracking — Lot Numbers and Serial Numbers for end-to-end traceability
Key Revision Points (MB-800)
- BOM = what, Routing = how, Work Center = where
- Production order statuses: Simulated → Planned → Firm Planned → Released → Finished
- WIP holds costs until production is finished