When it comes to manufacturing complex products like RVs, custom homes, or large machinery, businesses often find themselves at a crossroads: Should you use a traditional production order approach with routes, or transition into the Project Management & Accounting module (or even D365 Project Operations)?
This decision isn't just a technical one... it impacts financial tracking, resource management, and the overall success of your project.
When Production Orders Make Sense
Production orders with routes are ideal when:
The Manufacturing Process Is Repetitive: Think assembly lines and batch production.
Timelines Are Short: Typically, when production cycles are days or a few weeks.
Financial Complexity Is Minimal: The cost tracking is straightforward, primarily involving raw materials, labor, and overhead.
Example - A company manufacturing small electronics with a well-defined, repetitive process benefits from keeping things simple with production orders. The material consumption, labor tracking, and cost management are straightforward, and the entire process is completed in a short time frame.
When to Transition to Project Management & Accounting
For long-term, complex projects like building RVs or custom homes, the Project Management & Accounting module offers several advantages:
Advanced Financial Management: Supports work-in-progress (WIP) tracking, milestone billing, and complex revenue recognition.
Resource Management: Allows for detailed scheduling, resource allocation, and capacity planning.
Flexible Cost Tracking: Ideal for managing external services, procurement, and subcontractor costs within a project structure.
Example - An RV manufacturer might start with a production order for the base frame but then shift to a project approach for customizations and client-specific builds. The project module enables milestone billing and better tracking of external costs, especially if subcontractors are involved.
When to Level Up to D365 Project Operations
When projects involve significant service components, advanced scheduling, or require integration with professional services, D365 Project Operations might be the right choice.
Hybrid Scenarios: Perfect for businesses with both product manufacturing and professional service components.
Enhanced Financial Features: Includes advanced contract management and detailed billing options.
Resource Utilization Tools: Offers deep insights into resource availability and workload.
Example - A construction company building custom homes would benefit from D365 Project Operations. Beyond just building the home (production), they need to manage contractors, schedule inspections, and handle complex billing arrangements—all of which Project Operations handles seamlessly.
Pro Tip: How to Decide Which Approach Is Right for You
Ask yourself these questions:
How long is the production cycle?
If it's more than a few weeks, consider a project-based approach.
Are there significant external services involved?
Projects are better equipped to manage subcontractors and procurement costs.
Do you need complex billing methods?
The Project Management module offers milestone billing and advanced revenue recognition.
Is resource management critical?
If scheduling and capacity planning are needed, project modules provide more robust tools.
If your manufacturing feels more like a project with phases, billing complexities, and long timelines, it’s time to step up your game in D365 F&O. Projects allow for better control, enhanced visibility, and ultimately, more profitable management of large-scale builds.
And remember, just like I tell my kids when they ask, “Are we there yet?”—sometimes it’s not just about getting to the destination; it’s about knowing the best route to take.
Dad joke of the day
What's more impressive than a talking dog? A spelling bee!
*Ok, that joke wasn't my best work, sorry.
DynamicsDad
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