How to Customize Dynamics 365 BC for Formula Manufacturers with Vicinity Addons

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Vicinity How to Customize Dynamics 365 BC for Formula Manufacturers with Vicinity AddonsMicrosoft Dynamics 365 Business Central (BC) is top of the class as a cloud-based ERP solution for small to mid-sized businesses of all sorts. Dynamics 365 BC is highly customizable, so manufacturers might assume they can customize it to fit the unique needs of batch or process manufacturing. In fact, their Dynamics partner might recommend it.

However, like most ERP solutions, Dynamics 365 BC for Manufacturing is built for discrete manufacturing, and there are other kinds. You may not realize the differences if you haven't worked with other manufacturing processes. Most small manufacturers don't even realize how unique their processes are and the differences between discrete, process, and batch manufacturing.

Read about the difference between discrete, process, and batch manufacturing.

Microsoft Dynamics 365 BC pricing often includes the manufacturing solution without additional cost. So it seems to make sense to just "make it work."

However, customization is not without cost in time and resources. And the more your ERP system is customized, the more difficult it is to upgrade when the time comes. Once you start customizing your ERP solution for your unique manufacturing process requirements, you will realize it's a big and often expensive job. Remember, just because you can customize a solution does not mean you should. There is a better approach.

Read about 8 must-have software features for formula manufacturers.

The cost of customization is a speed bump. Even worse are the unanticipated roadblocks.

Process manufacturing requires certain functions that Dynamics 365 BC cannot handle independently. Two examples are multiple production facilities and accurate yield analysis.

Roadblock #1 – Multiple Production Facilities in Dynamics 365

Multiple locations producing the same product is easy to deal with unless it's not. It is not unusual for process or batch manufacturers to produce the same products at multiple locations. As an example, Sierra Nevada Brewing uses a formula to produce its Pale Ale beer at its North Carolina facility. However, the water chemistry is very different at their California facility. To get the exact same taste to their customers,  the brewmasters must use a different formula. Therefore, their software must adapt to production formulas in facilities that differ from the main site. The production location produces the same product but uses an adjusted formula. The same finished product can have two different SKUs depending on where it was produced.

Microsoft Dynamics 365 Business Central Premium, which includes manufacturing functionality, does NOT support multiple facilities nor allow manufacturers to produce the same product at different locations with slightly different formulas.

Roadblock #2 – Accurate Yield Analysis in Dynamics 365

Yield analysis is another example of Dynamics 365 BC manufacturing falling short. Dynamics 365 Business Central Manufacturing is designed for a repetitive assembly model. Some manufacturers produce the same item the same way every time. There are a lot of companies that do that. When they start back-flushing, the software data indicates, "You made 100 items, so you must have used a fixed amount of the components." It is all very set and uniform. However, that approach doesn't work with formulas and batch manufacturing.

Your raw material and inventory control will be inaccurate because the bill of material showed you used 100 components, but in reality, you may have used 120 or 90. The back-flush takes that variable yield data and pushes it into inventory. Now, you can't rely on your inventory data. The difference between what you plan to use and what you use can be significant, depending on your industry.

Often, manufacturers make more than one end item from a batch. Dynamics 365 BC will split that into numerous job orders. One will have a standard loss, and the second will have a variance.

In our brewery scenario, let's say you have a 100-gallon tank of beer. You should get 42 gallons in kegs and 57 gallons in cans. Instead, you output 40 gallons in kegs and 55 gallons in cans. Dynamics 365 BC would create two work orders. It would show 42 gallons in kegs and must apply 58 gallons to cans or keep the extra in inventory.

Your system needs the capability of recording multiple output streams from one input stream.

We've mentioned just two examples of functionality that process manufacturers need but that Microsoft Dynamics 365 BC Manufacturing doesn't yet provide.

Dynamics 365 BC is a Better Solution for Process Manufacturers

Microsoft Dynamics 365 Business Central (and Microsoft Dynamics GP) is an excellent fit for process manufacturers when paired with Vicinity Software. Vicinity is a scalable technology partner serving formula-based manufacturers in the chemicalfood, and brewing markets.

Dynamics 365 BC can focus on what it does best: your company's entire financial/distribution/operational side, while Vicinity Software handles the manufacturing side.

Many companies evaluating Dynamics 365 BC  see that it has a manufacturing model and assume it will be sufficient. However, problems could appear a few years later when they realize they have become mired in extensive customizations.

An ugly industry truth is that there can be a conflict of interest when a reseller suggests customizations. Sometimes, a customer is sent down the wrong path for the long term because customizations cost more than the actual software.

Dynamics 365 BC for Formula Manufacturing with Vicinity Software

Vicinity's scalability makes it a top choice among chemical manufacturers, food producers, and brewers. It Integrates easily with your Microsoft Dynamics 365 ERP system to deliver a comprehensive software solution that grows with your business. Explore our industry-specific solutions to learn how Vicinity's formula manufacturing software can address your unique needs.

If you are a manufacturing company using formulas or recipes in your process, let's talk before you select any ERP software. We can help you avoid the roadblocks and stay on the path to success. Contact our experts at Vicinity Software.

By Vicinity Software, www.vicinitysoftware.com

 

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