Manufacturing Part 1 in Microsoft Dynamics NAV 2016             

Hello and welcome again to The Coffee Mug Tutorials. This time around what we are going to focus on is manufacturing.

We basically got the request from management that we are going to be grinding our own coffee and selling it in bags, and it’s going to be quite a production so what we need to do is manage that through our manufacturing module.

And as I am the key user in the group, in this virtual group, I need to set this up and NAV fortunately has a very very good manufacturing module. Actually has several options when it comes to manufacturing.

We’re going to go the traditional route with traditional manufacturing and my objective in this demo is to set up a bill of material with a routing, finished goods and create a released production order.

That should be the basics of manufacturing. This might be a little bit longer than the usual, but I’m going to try and go quickly.

View Items Subsection
Ok, so what we have here, I got my Items and I actually created a subsection of the items called Coffee which only looks at the coffee items that I have. Click on that. 

You can look at another video that we had on this with List Views I believe, how to create these subcategories, they are really handy as I don’t want to look at my entire item list. 

In here I have a coffee bag, a coffee mug bag, so it’s a bag labelled Coffee Mug and then we got the Mexican Coffee Beans.

We’re going to start just with these two items as our Bill of Material so we’re going to basically grind the beans and put them in a bag and seal it and that’s going to be our finished goods.

These are my raw materials, these two here, and I don’t have the Finished Good yet.

Create the Finished Good
So what I’m going to do now, is create the Finished Good so I just go into New.

We’re going to call that CMCOFFEE_GROUND and for the Description I’ll put CM Coffee Ground.

We’re going to sell ‘Each’ because these are bags.

The category is going to be Coffee.

And over here we’re going to set this up as being a Retail Item which it is and the inventory posting group is going to be Finished.

So not to get too detailed on this but this will post into the Finished inventory on my GL because my posting groups have been set up like that.

And then the Tax Group is going to be Non Taxable so far. We haven’t introduced Taxes; we’re only selling to other wholesalers, which is fine.

Now often in manufacturing we use this standard costing method. In this case we’re just going to leave it at FIFO.

We might create another item in a later video going into standard and maybe going into the costing of manufactured items. But in this video we’re only concerned with getting the operations going.

Now if I go further down here, I have something called Replenishment System and Production.

So here I’m going to select Production Order for the Replenishment system.

For Production – Manufacturing Policy, this is going to be a Make-to- Stock item. 

Don’t worry too much about these settings right now because we are going to manually create the Production Orders; they come more into play when things are more automatic with MRP. And Production is a huge topic.

Create a New Production BOM
So over here – Production Bill of Material Number, we actually are going to create a new one. 

And I have a few in there already but this is a brand new one so I just clicked in there and hit New.

And this is going to be the CMCoffeegrounds and it’s going to be ‘Each’, because we’re selling the bag. 

Now it starts out with status ‘New’ and we can edit this as it’s in the New status.

However, when it’s Certified I cannot change this anymore it’s locked.

If I need to change it again, I need to go into Under Development, change it and then put it back into Certified so that it can be used.

If I close this out it cannot be used and if it’s New it cannot be used either. It only can be used when it’s in a Certified mode.

Ok so we go here into Type, we’re going to have an item on here and I’m going to pick my coffee…let’s see Coffee Mug Bag.

We’re going to have 1 Coffee Mug Bag in here and then we’re going to pick the grounds. We have a lot of different things in here, so we want the Beans. That’s right the Beans. Ok we use 1 pound.

Ok now if I set up the scrap percentage then the system would be factoring in extra coffee and that would probably be a good idea because as you are grinding your coffee you are not going to get a 1:1.

However just for sake of simplicity I’m going to leave it at zero.

All right, so now I’m done with my Production Bill of Material.

I’ll just go back to setting this to Certified so it’s ready to be used.

Click OK.

Now I set it onto my Item here, the CMCCOFFEEGROUNDS. 

Also, in order to run my production, I need to have a routing so there are two things I need on my item - they need to have a Production Bill of Material and a Routing.

Production Routing
And the routing has to do with how we actually do this. The process.

Create New
So we do have different ways to set this up but here we’re going to create click on New. 

We’ll create the grinding process and call it COFFEEGRINDING and here we have various things to set up like whether it’s going to go Serial meaning that each one of the steps down here will go one after another, or will go into Parallel which is the other option.

Most of the time people are working in Serial. We have the same statuses as before.

And here in the Lines, I’m just going to create one operation. It’s going to be a super simple manufacturing.

And I have something called Coffee Grinder as a Work Center Type that I already set up. 

About Work Center
Just a little bit on the Work Center, I’m going to go into that by selecting Grinder from the drop-down.

I did set it up beforehand. Click Edit.

A Work Center is basically a place within your operation where you do the work within the shop floor or the manufacturing floor. 

The Work Center could have multiple things within it, so here I have the Coffee Grinder as a Work Center. I basically look at the area of my production floor as Coffee Grinder, one Work Center has this capacity, that’s it.

What I could do is also have Machine Centers inside my Work Center and then I could be switching between machines inside the Work Center.

But look at the Work Center as a whole or assign to it as a whole.

So that gets into detail on how you set up your floor but for this particular exercise we are just going to use one Work Center – the coffee grinder.

Now, I had to set up a few things for the Work Center, like for example, what the unit of measure is.

It works in minutes so that means we’re scheduling in minutes. Also the calendar code, what calendar does it work off of?

We have a standard work schedule which I believe is 9-5 all weekdays and that will give the system the capacity. 

For example, I can take a look at the calendar right here for this Work Center.

Show Matrix.

It shows me that the Coffee Grinder has 480 minutes in a day to work. I have a bunch of other Work Centers in here but the Grinder, that’s the capacity. 

If I had many machines the capacity could be higher or I could use the machine centers.

Also I can see if I go into the Work Center Load.

It shows me how much has been allocated already to this Grinder, and what the Availability is after and what the Load percentage is.

So this could serve as like a little heads up on ‘hey you’ve got too many orders to grind, there’s no way you’re going to it with your machine center, you might need to buy another grinder or two to meet the demand’.

Continue with Routing
All right let’s go back and go into the Routing again.

So here I’m using the Coffee Grinding. I’m going to say that to grind 1… this grinder both grinds and I guess roasts… so let’s say it takes 30 minutes to Run and 5 minutes Setup Time.

Now here I could actually set up cost as well but right now I’m not going to cost it, I’m only going to look at the time.

So we’ll just hit OK. 

Now I have both the coffee grinding routing and the coffee grounds Production Bill Material set up for this finished good which is Coffee Mug Coffee Ground. 

Ok so let’s put 1 pound bag here just so people know. 

Create a Production Order
All right now we go out of this and what I want to do at this point is create a Production Order for this particular product.

I’m now going to go into Released Production Orders.

So there are different levels of Production Orders you have the Simulated, Planned, Firm Planned and Released.

For this demo we are only going to look at Released. Released means it’s released to the floor and can start working on it.

Planned or Firm Planned are for when we plan to do it but we haven’t released it to the floor yet.

Here we’ve been doing a lot of tulips and oranges, that’s a different part of our business. I am in the coffee business so I am going to create my coffee production order.

And here I just create New. 

Hit Enter and get the next number and then we have an item and I’m going to select a Finished Good which is our coffee grounds, right here. 

It populates the description so the question is how many bags are we going to make? We are going to make 1000 bags. And when is it supposed to be due? Actually remember we are in the future so this is supposed to be due 03-10-2017. Fine enough. Now this is all I have to set up.

What we now can do is hit Refresh Production Order.

And if I set everything up correctly, which I didn’t…it would recalculate backwards

And here it actually gives me an error to say hey you can’t do this because the coffee grounding routing has not been Certified, it’s still New. 

Fixing the Error in Routing
Ok let’s fix that, so we just go to Routings. 

Routings and it’s the Coffee Grinding Route. 

Click Edit to go in here.

This was New, nope we are certifying this right now.

Click OK.

View Released Production Order
Let’s go back to the Released Production Order, there we go. 

Go to the Coffee Ground.

Hit Refresh Production Order. 

Click OK and here we go. So now this is ready.

Basically it’s a production order it’s ready to be interacted with and it basically says you are going to get 1000 if you go through all of this.

Working with Capacity
So this is really interesting… in order to get 1000 done with our current capacity and the time it takes, for the 9^th of March we had to start in December so we clearly do not have enough capacity to do 1000. 

All right, well let’s check this out. Let’s see if we can do 50. How long will that take? I just Refresh again.

And now the system says yeah, 50 is enough. You can do 50 before the 9^th ; it takes about 3 days.

So right now we have our capacity plan in action.

Now also I can go into the Line > Components for this line.

And it tells me ‘ok you wanted 50, we are expecting you need 50 bags for that and 50 pounds of coffee beans’. 

We didn’t account for any scrap so it’s going to be exact.

View Routing

And finally on the routing.

You see that the route is set up here.

The Work Center is looking to do this starting on the 6^th and ending on the 9^th. Go into the Work Center > GRINDER > Advanced. 

View Work Center Load
Look at the Work Center Load.  

If you would go into the period that we were in which was March 2017 you would see that we have allocated 65 here and then 480, 480, 480 and this is backwards planning so it wants to be ready on the 9^th at the end of day, takes the entire 3 days and then 65 minutes of the 4^th day.  

And that’s pretty much how you set up a released production order with the routes, finished goods and production bill material.