When to use Jobs, Assemblies or Production Orders

Getting Business Central Manufacturing Right

One of the frequent areas of confusion I see when manufacturing companies are investigating or implementing Dynamics Business Central is the question of whether to use Jobs, Assemblies or Production Orders. I've written about this as relates to the Premium vs Essentials versions as Production Orders are specifically part of Premium.

It’s unfortunate but true that those who define themselves as manufacturing companies almost always see that Production Orders are specifically for manufacturing, and therefore they should always use Production Orders.  This isn’t the right way to look at things. 

I define 8 Modes of Manufacturing that manufacturing companies might follow.  Businesses in different modes of manufacturing often need to use different modules for their implementation.  Even within some modes there can be variations.

I’ve written and recorded videos on Modes of Manufacturing and their impact on ERP implementation and selection.  I don’t want to go down that path here.  Instead I want to list out the questions I ask potential and current users of Business Central to identify which of the manufacturing capabilities they should use.

Assembly Management

Assembly Management has the benefit of being a lot simpler to use than Production Management. With a simple customization to add a status field we can even keep track of where it is in the factory.

Here are the questions I use to see if assembly management might work.

1. Do you need to analyze job costs carefully for each job you do?
2. Do you regularly use outside service providers (such as chrome plating, painting etc.)?
3. How long do jobs spend in WIP - is it more than a week for the majority of jobs?

If the customer answers no to all these questions, then I will dig deeper but Assemblies are possibly going to work for this business.

Just a quick note on asking questions. When someone says “yes” to questions like this, I tend to ask “how often does it happen.”  If you ask a yes or no question make sure you qualify how much and how often. Staff will say yes to things they do once or twice a year and that can be misleading.

Jobs

Jobs can make an excellent manufacturing module for customers who do project manufacturing or (especially) for Engineer to Order companies. The Job Tasks allow the collection and analysis of costs from labor, outside services and materials.  The planning lines are entirely compatible with the concept of a BOM.

Jobs and Assemblies both use Resources (which can be people or equipment). Unfortunately the Machine Centers and Workcenters that are part of Production Orders are not used.

Here are the questions that I ask to see if Jobs will work.

1. Do you calculate the exact time for each fabrication step for each discreet part you make.  Drilling, turning, milling, cutting, welding etc?
2. Do you need to compare the original sales estimated costs to the budget costs to the actual costs to manufacture your project or job?
3. Are you able to create a forecast of jobs or product you expect to sell or need to buy?
4. Could you start buying materials and even assembling components while design engineers are still working on the BOM and design?

If someone answers NO to the odd questions (1,3) and YES to the even questions (2,4) then Jobs should be investigated.

Production Orders

Production orders are the hardest manufacturing module to implement and usually would be used in manufacturing companies that do a lot of repetitive production. It’s also not unlikely to see either Jobs or Assemblies used at companies that also use Production orders.

Here are the questions I ask to see if a company REALLY needs to use Production Orders.

1. Do you tend to make the same items over and over for customers or your own stock?
2. Do you tend to make the same design of items every time without much or any variation?
3. Could an order be in more than 2 spots in production at the same time? Example: of 1000 items you need to make, 500 have been rough turned, 250 have been milled and 250 are on a grinder?
4. Do you sometimes send items to outside service in the middle of the manufacturing process. Example: you make an item, weld it, polish it, send it out to a vendor to paint, and then it’s returned for drilling and tapping?
5. Is the sequence and schedule of work on your equipment with the load/time required important to determine in advance of sending to the shop floor?

For those customers who answer YES to most or all of these questions, you can be confident they need production orders.

Last Thoughts

A few last thoughts on this.

Companies that don’t need production orders often convince themselves they do because they exaggerate how often they do certain things. If you are an internal or external ERP consultant working with a company, I would reassure them that the energy put into setting up assembles is (for the most part) reusable later if they move to production orders.

Also remind them that the Essentials Package of Business Central is significantly less costly.  I have seen a lot of businesses trying to use Production orders where Assemblies or Jobs would have worked just fine and in fact been easier for the team. In these cases, the customer can be unsatisfied with Business Central because it just seems too complicated.

There are ISV solutions that will enhance both Assemblies and Jobs to make them easier to use and fill in some holes.  There are a lot of cases where Assemblies are just a bit too simple but Production is much too complicated.  It is way easier to backfill Assemblies in those cases rather than to try and push out Production.

Read more of my thoughts on spacific modes of manufacturing (such as Job Shop or Make to Stock) and how I believe these should be implemented on www.sabrelimited.com.