Re-Implemented Dynamics 365 Business Central for Manufacturing, Inventory & Warehouse Operations

From workarounds in spreadsheets and QuickBooks to a properly structured Business Central running production, inventory, and warehouse operations.

Project Description

The customer had been running Microsoft Dynamics 365 Business Central for several years alongside QuickBooks, but was hitting persistent problems: complex production BOMs and orders, no reliable view of inventory availability, no way to identify blocked materials, QuickBooks synchronization issues, unstructured bins across locations, and insufficient permissions for warehouse staff on Team Member licenses.

Congruent Software was engaged to fix the operational issues across manufacturing, inventory, and warehouse; streamline the purchase, sales, and inventory processes; define proper user roles and permissions; and re-implement Business Central with the correct setup, with the option to integrate or replace QuickBooks in future.

Customer Overview

The customer is a fast-growing manufacturing company operating across multiple warehouse locations in the US and Mexico, working with both domestic and international vendors and customers and a network of subcontractors worldwide.

The Challenge

The customer ran two core systems in parallel: QuickBooks as the source of truth for financials, vendor/customer balances, and inventory valuation; and Business Central for inventory and production operations. That split, combined with unstructured setup, created problems across every operational area.

Finance

  • Financial accounts, balances, and inventory valuation lived in QuickBooks, separate from the operational data in Business Central.

Production

  • Production was only recorded in Business Central after completion; in-flight communication ran through JIRA tickets.
  • Production planning was managed in Excel, driven by sales demand, internal demand, forecasts, or stock levels.
  • Multiple subcontractors spread across the globe added coordination complexity.

Inventory & warehouse

  • Multiple warehouses (San Jose and Mexico), each with sub-locations created in Business Central with no consistent structure or bin policy.

Purchases & sales

  • Purchases were updated regularly in Business Central; sales were not, undermining inventory accuracy.
  • Vendor and customer payments were held only in QuickBooks.

Issues identified

Production

  • Overly complex BOMs (often needing multiple production orders per sub-assembly)
  • No visibility of work centre costs and routing
  • No view of production costs and variances

Inventory & costing

  • Inventory valuation out of line with QuickBooks
  • No inventory availability tracking
  • Item charges not updated on time
  • Inventory periods not maintained
  • Cost adjustment batch job very slow, causing table-lock issues

Warehouse

  • Improper planning of inventory transfers
  • Locations and bins unstructured across warehouses

Process & administration

  • Planning run on Excel
  • Email communication not automated
  • Some processes undefined for custom needs
  • Job failures not notified to the administrator
  • User roles and permissions incorrectly defined
  • Gaps in closing purchase orders and invoicing

Our Solution

Congruent Software proposed a re-implementation rather than patching the existing instance. Its configurations and posted transactions couldn't deliver correct item costs, inventory valuations, or clean purchase/sales, and the production module carried too much operational complexity. Delivery was phased to keep progress visible and reduce the risk of solution gaps, with customization of standard Business Central features where the business need wasn't met out of the box.

Scope of the re-implementation

  • Business Central set up as one company across General Ledger; Sales & Receivables; Purchases & Payables; Manufacturing; Inventory & Warehouse; and Administration.
  • Optimized master data setups and configuration; customization of standard features to fit the business.
  • Data migration to the new instance using templates.
  • User training, documentation for custom features, and user acceptance testing support.

Inventory management

  • Enhanced standard features for a company constantly introducing new products: item master import via templates, physical inventory counts using purchase units of measure, refined inventory calculations, and a range of stock-analysis reports.
  • Implemented standard costing for cost transparency across manufacturing and inventory, enabling variance tracking and more accurate financial reporting.

Warehouse management

  • Implemented a simplified warehouse structure to fix the recurring stock-transfer problem, plus business-specific features: package number tracking, improved location and bin management, and warehouse operations reports.

Production planning

  • Restructured production BOMs and work centres so users could run production on standard features, closing process gaps across the cycle: production scrap handling, disassembly of finished items, BOM versioning, and subcontracting for sub-assemblies.
  • Result: far greater confidence in using the planning worksheet for production planning.
  • Implemented the Return Material Authorization (RMA) process, simplifying handling of defective or unwanted returns to the factory.

Third-party integration

  • Integrated Business Central with Coupa and DigiKey for automated order management, shipment notifications, and invoicing, reducing manual work.
  • Extended Business Central add-ons, including Warehouse Insights, for additional requirements and custom workflows.

Workflows

  • Implemented workflows to automate routine tasks, enforce approval hierarchies, reduce bottlenecks, and improve productivity.

Training

  • Comprehensive training and documentation to move users off legacy systems, including functional Business Central training plus technical training for administrators on Power BI and Power Automate.

Benefits

  1. Accurate inventory and costing. Standard costing and refined inventory calculations replaced valuations that were out of line with QuickBooks, giving cost transparency and variance tracking across manufacturing.
  2. Simplified production. Restructured BOMs and work centres removed the need for multiple production orders per sub-assembly and gave visibility into work centre costs, routing, and variances.
  3. Reliable warehouse operations. A structured location and bin policy fixed stock transfers and brought consistency across the San Jose and Mexico warehouses.
  4. Planning off spreadsheets. Production planning moved from Excel into the Business Central planning worksheet, with confidence to run it there.
  5. Streamlined returns. The RMA process simplified handling of defective and unwanted returns.
  6. Less manual effort. Automated email, reporting, and workflows reduced bottlenecks and removed dependence on individual stakeholders for visibility.
  7. Reduced manual data entry. Coupa and DigiKey integration automated order management, shipment notifications, and invoicing.
  8. Proper access control. Corrected user roles and permissions, including a workable approach for warehouse staff.
  9. Self-sufficient team. Training and documentation moved users off legacy systems, with administrators equipped on Power BI and Power Automate.