How Dynamics 365 BC Solves 3 Common Manufacturing Industry Issues?
In the United States, more than 20% of manufacturers report underproduction due to labor shortages and other factors. Globally, manufacturing industry issues like inventory volatility, labor shortages, demand sifts, compliance pressures and rising input costs, and tariffs are complicating management. To add to that, customers expect faster delivery, better quality, and competitive pricing. So, if you are an operations manager, you should realize that just ‘putting in more effort’ will not work. You need to digitally transform your operations, and you need to do it now. Solutions like Dynamics 365 Manufacturing are designed to help you face these challenges and stay competitive.
Here, we will talk about some common manufacturing industry challenges and how Dynamics 365 Business Central uses advanced AI capabilities to solve them.
What is Dynamics 365 Business Central?
Dynamics 365 Business Central is an AI-enriched ERP that is designed for manufacturing industry challenges. Read more about the platform, its capabilities, and how Evolvous helps you leverage them.
Manufacturing Industry Challenges that Can Be Solved by Dynamics 365 Business Central
#1: Manufacturing Inventory Management Problems
For most COOs and operation managers, inventory management is a daily source of friction. Here are the common challenges that businesses face:
- Excess stock in slow-moving SKUs. Shortages in critical components.
- No real-time visibility across warehouses, factories, vendors, and supply chains.
- Overstock ties up cash, while production still faces material delays.
- Inventory decisions are reactive, not proactive.
How Dynamics 365 Business Central Uses AI to Solve Them
With the AI features of Dynamics 365 Business Central, you can enhance inventory management efficiency. Instead of asking ‘what went wrong?’, you ask ‘what can go wrong and what we can do now?’.
- Intelligent MRP recommends optimal reorder points and safety stock levels
- Microsoft Copilot AI gives you an in-depth analysis of potential inventory problems.
- Predictive insights alert you about future shortages before they impact production.
- Automated reordering reduces human dependency and makes the process faster.
- Real-time visibility across inventory points, even for third-party networks.
What We Recommend?
As an experienced Dynamics 365 Business Central consultant, we have often seen AI fail because businesses want to put all data into it in one go.
Start by applying AI forecasting to 20% of your SKUs that drive the most revenue or pose the most downtime risk.
This is because:
- AI learns faster with high frequency data.
- Planning leaders can recommendations sooner
- Inventory solutions deliver results within weeks, not quarters.
#2 Labor Shortages in Manufacturing
When we talk about labor shortages in manufacturing, we are not talking about hiring challenges. For COOs and operations leaders, it is the inability to utilize the available workforce optimally.
Common challenges include:
- Experienced workers leave the workforce, but new talent doesn’t reach productivity.
- Too much operational knowledge is trapped with people, not systems.
- Supervisors deal with daily issues, instead of improving production efficiency.
- Too many people are engaged in repetitive, unproductive work like reports, waiting for approval, etc.
How AI Features Dynamics 365 Can Help You?
Dynamics 365 Business Central can help you execute a greater workload with a limited team. On top of that, it also makes information exchange easier.
- Automates routine work like production reporting, inventory updates, purchase planning and reordering.
- With built-in MRP and demand forecasting, you can effectively avoid overstaffing and last-minute labor shortages as well.
- Business Central can standardize BOMs, case routes, policies, and work instructions. This shifts knowledge from people to the system.
- Supervisors get real-time visibility. Managers can rebalance workloads according to demand. This enables smarter utilization of the available workforce.
What Do We Recommend?
While working closely with the manufacturing sector as a Dynamics 365 consultant, we have seen Operation Managers think that the value of AI is in automation alone. That is not true. Real value comes from helping you make better decisions faster.
So, we recommend that you build and deploy a custom AI agent with Copilot Studio and use its insights in your production and materials review meetings.
Why this helps?
- New supervisors get all the information they need to work efficiently.
- Managers can make data-driven decisions, instead of intuitive ones.
- Knowledge becomes hosted in the system, not dependent on individuals.
Discover How We Helped Rotoliptic Boost Efficiency with Business Central
Rotoliptic is a Canadian equipment company, specializing in the oil and gas sector. Discover how we helped them solve operational issues like order management, good receipt, testing and more with a custom deployment of D365 BC.
#3: Cost Optimization Under Rising Input Costs
For manufacturers, much of the cost pressure today is coming from external volatility. Raw material inflation, fluctuations in freight costs, exchange rates, and volatile tariff structures are all playing a role.
Common challenges include:
- Material cost variations are often identified very late.
- Tariff changes impact landed cost after pricing decisions are locked.
- Margin reduction often gets hidden.
- Emergency sourcing decisions are made without real-time cost comparison.
How You Can Benefit from AI Features in Dynamics 365 Business Central
Business Central makes you aware of the costs in real time. Here are some of the ways it can help.
- AI-driven cost forecasting highlights margin risk before you confirm orders.
- Intelligent analysis exposes cost drivers across materials, labor, and overhead.
- You can get alerts in case of sudden input cost spikes.
What Do We Recommend?
It is advisable to integrate AI at the planning and quote stage. You can also embed margin thresholds in planning approvals. So, if the cost exceeds the threshold, the plan is not approved, and the relevant decision makers are notified.
Solve Multidimensional Manufacturing Challenges with Evolvous
At Evolvous, we help you solve multidimensional challenges with AI-driven technology consulting. Download FREE one-pager to find out how you can solve critical challenges in a smarter way.
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Is Your Current ERP Doing Enough to Solve Manufacturing Issues?
Let’s Assess!
Try to answer the following questions, with a simple YES or NO.
Inventory Planning Issues
- Do planners manually override MRP suggestions from the ERP?
- Are your safety stock levels static, irrespective of demand variability?
- Do you become aware of stockouts only after placing production orders?
Production Issues
- Does production performance drop when a specific supervisor is unavailable?
- Are routing and setups managed manually?
- Is manual data entry delaying reporting from the shop floor?
Demand Planning & Forecast Issues
- Are forecasts prepared manually, outside of ERP?
- Are sales and operations plan not in sync, due to data issues?
- Does it take time for demand changes to reflect in production planning?
Cost Visibility & Margin Issues
- Are material, labor and other costs visible only after a prolonged period?
- Do external cost factors impact margins before you can take corrective actions?
Compliance Issues
- Does it take to prepare audit reports for compliance checks?
- Are approval processes spread across emails, ERP data, and online chats?
Intepreting the Results
If you answered ‘YES’ to 3 or more of the questions:
Your ERP can be considered to be functional. But it has shortcomings when it comes to making intelligent decisions to solve critical manufacturing challenges.
If you answered ‘YES’ to 6 or more of the questions
Your operations are heavily reliant on people and not much on ERP. Unless you decide to significantly transform by migrating to an AI-enriched ERP, you will remain exposed to inventory, labor and cost risks.
Explore how Dynamics 365 Business Central can truly impact your existing operations. Schedule a FREE Assessment with our certified Microsoft Dynamics 365 consultants to discover the right move you should make.
Why Businesses Choose Us as Manufacturing ERP Consultant?
Manufacturing-first, Not ERP-first
We are a platform agnostic company. For us, the problem faced by you is the number one priority. Our team design solutions that are built around your workflows, not just the capabilities of the ERP platform.
AI-Driven Consulting
Not only do we empower your operations with AI, but AI plays a central role in how we deliver the solution. This helps us to reduce costs and enhance solution accuracy.
Proven Track Record
We have helped global manufacturing companies, ranging from luxury brands like Patek Phillipe to specialists like Thermo Fisher Scientific. This exhibits our expertise in solving complex problems common in the sector.
Solve Complex Manufacturing Issues with the True Experts
Solve your operational challenges with innovative ERP and other technology solutions. Get in touch with our team today and take the first step towards enhancing efficiency.
Frequently Asked Questions
- I currently use Dynamics GP. Can I use AI for operational enhancements?
Dynamics GP is a legacy platform that lacks AI and other intelligent features. We suggest that you migrate from GP to Dynamics 365 Business Central to utilize the modern features to their fullest potential.
- What is Copilot in Dynamics 365 Business Central?
Like most modern Microsoft products, Business Central comes with in-built Copilot. It is a powerful AI agent that acts as a chatbot and digital assistant. You can execute various actions through Copilot by instructing it in plain language. Learn more here.
- How long does it take to see measurable ROI?
Most manufacturing companies see operational improvements within 2 to 3 months. However, this might vary depending on the scope of implementation, customization, and other factors.
