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  • Writer's pictureConnor Chavez

Dynamics 365 Business Central for Flexible Manufacturing Operations

CBR Technology is committed to showing you how Dynamics 365 Business Central can be utilized for flexible operations, especially when relying heavily on outside contractors.

Contract Manufacturing, Inventory, and Assembly Process

We'll explore the facets of contract manufacturing, including inventory and assembly processes, and how to recognize the costs associated with contract manufacturers. Additionally, we'll delve into the logistics of working with third-party logistics (3PL) companies that handle the distribution to your clients.

If your business involves managing inventory that isn't housed on your premises—perhaps it's at a contract manufacturer, a 3PL subcontractor, or even with a customer—it's vital to maintain accurate inventory tracking since it reflects directly on your balance sheet.

As a manufacturing manager logged into Business Central, I have access to comprehensive system controls. Let's dive into the role center and the activities available.

Inventory and Item Management

Consider a product like Airpods, assembled by a contract manufacturer and distributed by a 3PL to our clients. We'll look closely at this item's current inventory across various locations, focusing primarily on the 3PL and contract manufacturer.

To streamline operations, we utilize stock keeping units (SKUs) for each location where the item is held. This allows us to specify unique replenishment methods, routes, and bills of materials for each SKU, optimizing the inventory based on location-specific needs.

Running MRP Processes

Initiating MRP processes is straightforward. I'll run it, focusing on our manufacturing operations, and use a demand forecast to align with our sales team's projections. The results indicate the necessary inventory transfers and production orders to meet demand at the contract manufacturer and 3PL.

Inventory Updates and Transfer Orders

After updating inventory levels, it's essential to manage the transfer of items from the contract manufacturer to the 3PL. Using an in-transit location during this transfer helps maintain control and accountability, ensuring items are not added to the 3PL's inventory until they are officially received.

Reporting and Effective Management of Landed Costs

CBR Technology also manages the billing of services from contract manufacturers through landed costs associated with production. This ensures that the costs associated with manufacturing are accurately reflected in our financial system.

Sales Orders and Invoicing

Handling sales orders efficiently, ensuring that inventory is relieved at the 3PL, and generating corresponding invoices in accounts receivable are all streamlined through Business Central.

Physical Counts for Accurate Inventory Management

Regular physical counts are crucial, especially when inventory is held at third-party locations. Business Central facilitates these counts, ensuring discrepancies are resolved promptly to maintain inventory accuracy.


This scenario illustrates how CBR Technology leverages Dynamics 365 Business Central to manage operations involving third parties effectively. From contract manufacturing to comprehensive inventory management and streamlined sales processes, Business Central enables us to maintain flexibility and control throughout our supply chain.

For more detailed insights into how we can tailor these processes to fit your specific business needs, or to see a demo of Dynamics 365 Business Central in action, contact CBR Technology today.

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