Microsoft Dynamics 365 for process and discrete manufacturing has countless capabilities — including MRP, shop floor control, and supply chain management – that optimizes your manufacturing operations and strategy.
Now, let’s dive into the world of Discrete Manufacturing and discover its fundamental principles:
- Order-based production – means it is defined as a product that must be manufactured in a specific configuration and quantity and must be available by a specific delivery date. Usually, a production order has only one product output – which means that no co- or by-products are produced;
- Frequent Product Changes – means that not every product order is produced in the same way. For instance, because the product evolves over time – a material is changing, or a different resource has to be used;
- Varying Sequence of Work Centers – means that the routing can be a simple sequence but for more complex scenarios it is more common to take advantage of a network of operation;
- Sub-Assemblies – often put into interim storage to shorten the delivery time once the order arrives;
- Status Processing – means updating the status of the production order and reporting the consumption;
- Low Volume with High Complexity or High Volume with Low Complexity – are the extremes we usually see in discrete manufacturing.
Phew! Now that we’ve taken a journey through the principles of Discrete Manufacturing, let’s explore the industries that thrive within its domain.
Industries in Discrete Manufacturing
Now that we have delved into the essence of Discrete Manufacturing, it’s time to explore the production strategies and industries that thrive within this dynamic realm. Here is a glimpse into the world of manufacturing prowess.
Make-to-Stock Method
These companies are masters of stocking products on their shelves. They specialize in fast-moving items that rely on min-max or historical forecasting thresholds. This method is commonly used by customer packaged goods companies. For example, think of a clothing manufacturer that always keeps its shelves brimming with fashionable apparel. They’re always ready to meet the fashion needs of eager customers.
Assemble to Order
Furniture companies take center stage with their “push” method. They stock sub-assemblies such as drawers and frames. When a customer places an order for a chest of drawers, teams bring together the individual components, assembling them with care to create the final product.
Configure to Order
Here’s where customization shines. When a customer purchases a laptop, they have the power to customize it according to their preferences. From choosing the screen size and memory to selecting the storage capacity, processor, and even the color, it’s a personalized journey. The seller, let’s say a tech giant like Apple, takes these specifications and orchestrates the assembly of the perfect laptop, providing an estimated delivery date that includes both the assembly time and delivery duration.
Make to Order
The machinery industry takes center stage here. Imagine waving or spinning machines that offer a number of options to customers. These options are often too vast and complex to be predefined to the fullest extent. Each customer has unique requirements, and manufacturers rise to the challenge by crafting machinery tailored to their specific needs.
Engineer to Order
Building, construction, and bespoke machinery showcase the epitome of engineering brilliance. This sector is all about crafting custom-made solutions. Whether it’s designing a magnificent structure or creating specialized machinery, every project is a unique endeavor. The manufacturer works closely with the customer, transforming their vision into a tangible reality.
These examples provide a glimpse into the diverse industries that embrace Discrete Manufacturing. In reality, a single customer often incorporates multiple strategies within their production processes, whether it’s for different items they offer or various components within a single product.
Discrete Manufacturing Core Components in Dynamics 365 Supply Chain Management
Looking into the core components we have for Discrete Manufacturing in Dynamics 365 SCM, we have the following.
BOM – Bill of Material. It specifies the required materials for a specific product. The BOM is a foundation for calculating the estimated cost of a product. It is also used to plan the demand for components and materials, depending on availability in the supply chain, to calculate the potential availability of the product. The BOM is used in production to plan and execute the material flow, capturing the consumption and progress for the production order.
Routes and Operations – these are the activities required in the production flow. The Route is a combination of operations in a specific order to produce the product and link the resources. The route, along with a BOM, serves as the foundation for calculating the estimated cost of a product. It is also used to plan the demand for resources and, depending on availability in the supply chain, calculate the potential availability of the product.
Resources – resources are linked and allocated via routes to the operations required in the production flow. The resources have availability defined through a calendar for scheduling and, depending on resource availability, calculate the potential availability of a product. They have costs defined through different cost categories to calculate the resource consumption value and estimate the cost of the product. Resources are usually a limiting factor in production planning and scheduling to determine the order of production orders in the production flow.
Capacity Planning – this can be divided into: long-term capacity planning, infinite planning, mid-term capacity planning, and finite capacity/short-term capacity planning.
Scheduling – this is the process of determining the order of production orders and resource allocation, considering backlogged production orders, material, and capacity availability. In production, this is a continuous process controlled by a scheduling method. For example, scheduling forward or backward from a given date to optimize the use of resources and materials.
Costing – costing also has multiple variations, such as estimating the production order and post-calculation of the realized cost of production, among others.
Bill of Materials (aka BOM)
A Bill of Materials defines the components required to produce a product. BOMs are utilized for various purposes throughout the product life cycle in discrete manufacturing.
For instance, a sketching or draft BOM provides an initial estimate of the required materials during the early design phase, assisting in rough cost estimation and estimating product attributes.
An Engineering BOM is typically used when designing products based on existing product portfolios. Engineering BOMs are structured to streamline the design process and group complex products into engineering modules. For simple products, engineering BOMs may be suitable for the actual production process.
A Planning BOM is used for material requirements planning. The demand for components is calculated based on the demands of finished products, such as costing BOMs, planning BOMs, etc.
A Production BOM is the actual BOM used for a specific production. It must consider the actual resources utilized in the product’s production.
A Costing BOM is used to calculate the estimated cost of a product. For example, a costing BOM can be employed when determining the standard cost or estimated plan cost of a given product. The costing BOM may reference a specific mix of materials and resources expected to be used, enabling the creation of a representative estimated cost for a period and helping to avoid variances over time.