Business Central has two ways to make a finished item from components. Assembly is simple, fast and in the Essentials licence. Production is a full manufacturing module in Premium. Choosing wrong in either direction is expensive. What each one does, when to use it, when not to, and the pros and cons side by side.
"We make things, so we need manufacturing" is the sentence that starts a lot of over-scoped projects. Business Central has two mechanisms for turning components into a finished item. Assembly is light, quick to set up and included in the Essentials licence. Production is a full manufacturing module, needs the Premium licence for every user in the tenant, and takes a project to implement. Plenty of businesses that "make things" only need assembly. Some that think they are "just kitting" need production. Here is how to tell.
An assembly order takes an assembly BOM (a flat list of components and resources, with quantities) and makes a quantity of the parent item, consuming the components and posting the output in one step. There are no operations, no routings, no work centres, no capacity, no work-in-progress. You can post an assembly order on its own (assemble to stock) or have one created automatically behind a sales order line (assemble to order), so that the kit is built when the order is shipped and never sits in stock.
Designed for: kitting, bundling, light configuration, simple packaging, anything where "making" is picking components and putting them together with no meaningful process between.
A production order takes a production BOM (which can be multi-level, with versions, scrap and phantom items) and a routing (a sequence of operations at work centres or machine centres, with setup and run times), and tracks the make through its life: planned, firm planned, released, finished. Components are consumed by operation, output is posted by operation, work-in-progress is valued on the balance sheet, capacity is planned and loaded, subcontracted operations go out on purchase orders and come back, and the whole thing feeds MRP, which plans the production and purchase orders you need to meet demand.
Designed for: manufacturing in the ordinary sense: operations that take time on resources that have limited capacity, with work in progress, scrap, routings, subcontracting, and planning.
| Assembly | Production | |
|---|---|---|
| Licence | Essentials | Premium (all users) |
| Bill of materials | Flat assembly BOM | Multi-level production BOM, versions, phantoms, scrap |
| Routing and operations | None (resources can be added as a line for cost) | Routings with operations, setup and run time, versions |
| Capacity | None | Work centres and machine centres, calendars, loading |
| Work in progress | None; consume and output in one posting | Yes; WIP valued, consumption and output by operation |
| Subcontracting | No | Yes, via subcontractor work centres and purchase orders |
| Planning | Assemble-to-order links to the sales line; order planning | Full MRP/MPS via the planning worksheet; order planning |
| Costing | Standard or actual; components plus resource lines | Standard or actual; material, capacity, subcontract, overhead; variances |
| Warehouse | Pick for assembly; assemble-to-order pick on shipment | Pick for production consumption; put-away of output |
| Lot and serial tracking | Yes | Yes |
| Setup effort | Hours to days | Weeks to months |
| Who uses it day to day | Warehouse or sales admin | Production planners, shop floor, cost accountants |
You are using it to avoid Premium and it is hurting. The signs: assembly BOMs nested three deep because you have "sub-assemblies"; resource lines being used to fake operations and someone keeping capacity in a spreadsheet; WIP calculated at month-end by hand; "kits" that take two days and three people to build. At that point the licence saving is costing more than the licence.
You are a distributor who bundles. The signs: production orders with one operation that takes zero minutes; routings that exist only because the module requires one; a planner whose job is pressing "finish" on orders that were made as soon as they were released; and 40 Premium licences for a business where three people make kits. The implementation took months, the users resent it, and assembly would have been live in a week.
Yes, and many manufacturers do: production for the manufactured items, assembly for the kits and bundles sold around them. The item's Replenishment System (Assembly or Prod. Order) decides which mechanism makes it, so the choice is per item, not per business. A common pattern is production for the sub-assemblies and assemble-to-order for the final configuration the customer chooses.
Assembly to production: yes, item by item, by building the production BOM and routing and switching the replenishment system; the components and history stay. It is a project, because the routing and capacity data did not exist before. Production to assembly: easier, if you genuinely do not need the process data, but check the costing implications first because WIP and variances will disappear from the accounts.
Is there anything between "components picked" and "finished item made" that you need to plan, measure or value? If no: assembly. If yes: production. If you are not sure, run the real items through the questions above with the people who make them, not the people who sell the software, and remember that the Premium decision is for every user in the tenant, so it is worth getting right; the licence post has the numbers. We are happy to look at your BOMs and tell you which side of the line you are on: get in touch.
