Microsoft Dynamics 365 Business Central helps companies to manage their Manufacturing Cycle smoothly. Manufacturing module is fully integrated with Finance. Dynamics 365 Business Central provide us below functionality to manage Manufacturing Cycle.

In this document we will see Basic Manufacturing Process:

  1. Item
  2. Production BOM
  3. Work Center
  4. Machine Center
  5. Routing
  6. Production Order
  7. Finished Production Order


Create Item Master for Finished Goods, Raw Material and Packing Material

Production BOM

A production bill of materials (BOM) is a list of all components that are required to produce a Finished Goods. The list includes the description, quantity, and unit of measure of each component, in addition to other information.

Create Production BOM for Finished Goods. Go to manufacturing module or search Production BOM in the search bar system will open the BOM list page.

Click on new button and create Production BOM

Select Number series in the No. Field, Enter BOM Description, select Unit of measure code.

Go to the BOM line, enter Raw material and Packing Material, enter Quantity Per.

Change the status to certified.

Work Center

Work centers are specific locations where work is performed. You can set up workcenter cards for the following:

• Machines
• Groups of machines
• People

We can create work center for Production process and we can load work center cost on production.

Create Work Center

On General Tab , Select Number Series in the No. field, Enter Work Center Name, Select Work Center group

On Posting Tab, Enter Direct Unit Cost

On Scheduling Tab, Select Unit of Measure code, Shop Calendar Code, Enter Capacity and Efficiency.

Machine Center

Machine centers are the lowest level of the capacity hierarchy and represent the following:

• A machine
• A group of machines with identical characteristics
• A person
• A group of people that perform the same tasks

Create Machine Center

Go to Manufacturing Module or search Machine Center in the search bar.

On General Tab, Select number series in the No. field, Enter Machine Name, Select Work Center Code.

On Posting Tab, Enter Direct Unit Cost.

On Scheduling Tab, Enter Capacity and Efficiency

On Routing Setup Tab, Enter Setu Time, Wait Time and Move Time.


A routing specifies the sequence of operations that are required to manufacture a product. The operations are performed at a work center or at a machine center, also referred to as capacities or facilities. Manufacturing companies use routings to manage the production process.

Create Routing

Go to Manufacturing Module or Search Routing in the search bar

Select No. series, enter Routing description on Header.

Go to the Routing Lines, Enter Operation code, Select Type = Machine , system will auto update setup time, wait time and move time from Machine enter, we need to enter only Run Time.

Change the status to Certified.

Link Routing and Production BOM on Finished Goods Item

Go to the Item list, Edit FG item and go to Replenishment Tab

Select Replenishment System = Prod. Order

Routing No. –> Select Routing code from list

Production BOM No. –> Select BON code from list

Released Production Order

You use production orders to manage the conversion of raw materials into manufactured products. Raw materials include purchased items and subassemblies, and are also known as components or component items.

Production orders contain the following information:

• The type and quantity of products to manufacture
• The components that are required to produce the manufactured products
• The steps or routing operations that are required to convert the components into manufactured products.
• The work centers and machine centers where the routing operations occur. Work centers and machine centers are also known as facilities or capacities

A released production order (RPO) is a production order that you have released for manufacturing. After you release a production order, you can post produced quantity and component consumption to it. This does not necessarily mean that component items are picked for the order or that any of its operations have started. It means that the order is between its release and its completion.

Create Released Production Order

Go to Manufacturing module or search “Released Production Order” in the search bar.

Select No. series, enter description, select Source Type = Item, Select FG Code in the Source No. and enter output quantity.

Go to Schedule Tab, enter Start date & time and End date & time

Go to Posting Tab, Select Location Code

Go to Ribbon , Click on Process –> Refresh Production Order

Click on OK

System will generate Production order line.

Click on Line –> Production Journal

System will open the Production Journal screen.

Enter Select FG line and enter Actual setup time, Run Time and Output Quantity.

Click on Post/Print –> Post

System will post Production Journal.

System will post Consumption and Output entries.

Come back to RPO, Click on Related –> Entries –> Item Ledger entries

System also posted capacity entries, click on Capacity ledger entries

Come back to RPO and change the status to Finished

Click on Process –> Change Status

By default system will select Finished, click on YES

Go to Finished Production Order and check

Check FG Item inventory

System posted Output entry and inventory increased in the ledger.