Best Practices implementing Microsoft Dynamics Manufacturing at Small Businesses

Here at Sabre, we are experts at implementing Microsoft Dynamics manufacturing systems, particularly Business Central manufacturing. That’s not entirely bragging – it is based on a well respected thought leader. Malcolm Gladwell says that it takes 10,000 hours of practice to become an expert at something. 

Our typical competitor might implement one manufacturing project out of every five. Therefore, their average consultant would take approximately 25 years to achieve 10,000 hours of practice. We, on the other hand, focus exclusively on manufacturing, allowing us to reach this milestone in just 5 years—a timeframe significantly shorter than the 25 years it takes them.

We’ve been doing this since 2002 – so we have a lot of practice.

Since 2013, we have been implementing Microsoft Dynamics manufacturing with Business Central, further solidifying our claim as experts.

Additionally, we exclusively implement systems in the SMB market, which I would define as those manufacturing companies with between 20 and 500 employees. Realistically, we don’t work with customers over 250 employees, but the difference between 250 and 500 employees isn’t all that significant once you reach those sizes. For larger businesses, we avoid any mixed mode as it is simply too complex.

Curious about the cost of implementing? Read my in-depth guide on Dynamics 365 Prices.

Challenges of Implementing Microsoft Dynamics Manufacturing at an SMB

Now we can get into the meat of the matter. Implementing Business Central manufacturing at SMB companies (and in general, implementing any ERP in SMB manufacturing) can be a pretty difficult business. A lot of it depends on the culture and the background of the SMB.

I break SMB into two basic sub-classes:

1. The Family SMB
2. The Corporate SMB

Let’s look into each in a little bit more detail.

1. The Family SMB

This category often includes, but is not limited to, smaller SMBs characterized by the agile, entrepreneurial spirit of the original owner and the founding team. The team at these companies are “make it happen” types, typically having risen through the ranks from the production floor or having started in the business when it was still in its infancy (and it might still be relatively small).

2. The Corporate SMB

These may be larger than the Family SMBs, but not necessarily. Sometimes, smaller startups exhibit the Corporate SMB structure. These SMBs possess a bit more corporate experience, and it’s likely that more outsiders have been hired in management roles. They are beginning to establish the structures found in larger enterprises. They usually have strong ERP experience and might even have some Microsoft Dynamics manufacturing experience.

The Family Culture SMB

Often we find what I call a “Family” SMB. This doesn’t necessarily mean that the family that started the SMB are still the owners, or lots of family members work there (but it might). What I mean when I say “Family” SMB is that the management style and culture of the business is that of a family business. For practical purposes, these SMB manufacturers are usually actually a bit smaller in staff size. We find they are between 20 and 100 employees. The simplicity that can be had with Microsoft Dynamics manufacturing can be really beneficial in this culture… if they can wrap their heads around it.

The business is often made up of senior management who have been there for a long time and often have organically grown into their positions. There is a resistance to bureaucracy in these companies in an effort to stay agile and entrepreneurial. This is a strength of the business, and definitely has a lot to do with how they reached this point.

The managers are almost always working managers – they are doing practical work every day, experts in getting “parts out the door.” As with everything, there are advantages and disadvantages of this culture.

Are you a Family Culture?

If you answer yes to the majority of these questions, you are probably one of these kinds of businesses:

• We value experience working here more than education or external experience.
• Most of the managers worked their way up into the position.
• The Owner/President has an open door policy and people use it.
• We have a fairly flat management structure.
• If we have an ERP, only a few people are “strong” in it.
• We have many informal “Islands of Information” using Excel or other tools.
• We have a lot of systems that are informal (we know what to do, nobody is overseeing it with documented guidelines).
• The culture values getting things done.
• We don’t have a formal budgeting process, or if we do, nobody actually follows the budget once created.
• Middle Managers do specific tasks required to get product made or shipped.

As I said, companies can be larger than 100 employees and still fall into this category, creating challenges with Microsoft Dynamics manufacturing projects. The Small SMB in this case isn’t small in size but is trying to keep the management culture of the small business.

When we work with these businesses, we find a few things are true.

1. There isn’t a lot of experience with ERP among the management.
2. The managers are very busy, and are the subject matter experts about the system.
3. Data exists in Silos or “Islands of Information” controlled by managers or power users but not centralized.
4. A senior manager (either the owner or one step from the owner) is much more likely to be part of the ERP team.
5. The ERP team do better seeing how the ERP works (hands on) rather than planning how it will work (theory).

Tips for a Better Microsoft Dynamics Implementation for Manufacturers with a Family Culture

Here are a few tips to keep in mind to ensure your implementation of Dynamics 365 Business Central for manufacturing goes as well as it possibly can.

1. Keep Decision Makers in the Project

Microsoft Dynamics manufacturing ERP is not an “out of the box” software you just turn on and it’s ready to go for your business. It is a system that is going to require a number of choices along the way to ensure it works how you want it. The same team can implement Business Central manufacturing with entirely different outcomes just through a few small changes in decisions. This is a good thing! It means it’s flexible enough to be changed and adjusted no matter what you do. 

In these businesses, the top person needs to make the decisions in a lot of cases. They need to buy into the Microsoft Dynamics manufacturing ERP or they will be disappointed with the outcomes. Staff is used to doing things off-the-cuff which are good getting parts out the door but bad in ERP.

2. Do Not Second Guess the System

These businesses are used to being agile and creative. They have solved all kinds of issues that come up in day to day manufacturing by adjusting, changing, creating, and inventing. 

While being trained and running simulations through Microsoft Dynamics manufacturing there is going to be a strong instinct to do the same. You need to park that creativity for a while until you see how the system works end to end in the real world. That creative instinct has led customers to create customization solutions looking for problems, and end up spending much more than they needed to for little benefit.

3. Best Practices Really are Best

It’s usually the best idea to let the consultants configure the system for you as a “first pass” and put in place the best practices (best ideas) they’ve seen at other businesses like yours. This really helps streamline the process. 

If the consultants set the system up for you, do NOT accept it without checking. You need to get your hands into the system (decision-makers and power users alike) and try and break it. You should be doing this for at least a few months.

4. Data Collection and Consolidation for your Microsoft Dynamics Manufacturing ERP Implementation

Almost certainly the hardest part of the implementation for this business will be getting their Microsoft Dynamics manufacturing ERP data into the system. If the consultants know what they are doing, they will help you look for your data and collect some samples. They’ll format the samples “correctly” based on what your needs as they see them. These will become templates you can follow to do the rest of the data. 

Before you try and collect all data and consolidate it for loading, do the best practices testing I mention above. It will save you massive wasted time to first know that what you are collecting is both what is needed, and is collected correctly.

I have seen companies spend hundreds or even thousands of hours collecting data before they really understand the ERP, only to throw it all out and start over again. Don’t try and second guess what is needed.

5. Bring in Outside Help to Improve your Success

Finally, be ready to bring in some outside help to improve your odds. If nobody in the organization has any ERP experience as well, I suggest finding a local Generic ERP Consultant or a Project Manager with experience as an ERP analyst. They can guide your team and give you the right plan for what you need to do and change internally. The outside Microsoft Dynamics manufacturing ERP vendor (like Sabre) can’t do that effectively for you. 

Business Central manufacturing doesn’t come with a guide as to how you should change your business or culture. Sabre is pretty good at giving high level guidance, but consulting on business change is not part of our process. It’s too expensive to rely on us when you can get some really good local people for much less. They don’t know Business Central and you don’t want to pay them to learn, but they know ERP as a concept and that is what you really need.

Family Culture SMB often Misjudge Staff ERP Skills

This is my last point and a huge risk at the Family SMB. Sometimes these businesses have a member of the team that everyone regards as the “Expert” in ERP. This person is the one outsider that worked with ERP at previous jobs. 

Be warned; lots of people work with ERP and don’t really understand it. 

If someone was part of the implementation team, and lead or was a primary member of the project they may be knowledgeable. If someone worked with the system but had little to do with setting the entire system up, they are just users. They don’t necessarily understand the system. Consider yourself warned!

The Corporate Culture SMB

The other type of SMB is what I call the “Corporate” SMB. This SMB has hired externally for management more often than they have promoted from within. They have decided that for the business to reach whatever next step is needed in its growth, the structure of middle management is required. There is a more well-established structure of reporting within the business, but this carries with it more overhead and devolution of decision making. 

A lot of the managers or staff in this type of SMB have perhaps worked with Oracle, SAP, or other Tier 1 (ie: Very expensive) ERP. They may have come from backgrounds where they had access to very large IT departments and could request things and get them without worrying about costs. There is often a mix of the older, family-type management and the newer management.

The experience with the really complex, very powerful systems works against a successful Microsoft Dynamics manufacturing implementation.

These businesses are sometimes growing quickly and might be implementing the Business Central manufacturing ERP because the experienced staff recognizes the massive benefits it can bring (having worked with them) but might have unrealistic expectations also.

Are you a Corporate Culture?

If you answer yes to the majority of these questions, you are probably a Corporate Culture.

• We value education and external experience very highly.
• We are looking for staff who have worked at more structured enterprise manufacturers.
• There is a hierarchy to the management structure, and we are trying to follow it (not so open door as it was).
• We see “Islands of Information” as a huge problem.
• The newer management expects a lot of features and functions in our ERP (which it may not do).
• We are trying to or have already documented our processes (if there are informal systems, we don’t really want to keep it that way).
• The culture is trying to eliminate chaos and impose some kind of order.

Companies who are pursuing this can be quite small, even a start-up. The Corporate Culture SMB might be small in size, but is trying to develop a management culture of an enterprise business by implementing Microsoft Dynamics manufacturing.

When we work with these businesses, we find a few things are true.

1. Some of the team have worked with SAP, Oracle or other large enterprise ERP systems and might have unrealistic expectations of Business Central manufacturing.
2. The managers might not be the subject matter experts – but there are power users who definitely are.
3. There is a goal to digitize as much as possible and roll out the ERP to replace as many paper or disconnected systems as possible.
4. The senior management is much less likely to be part of the ERP team and instead middle management will lead the project.
5. The business is more likely to hire a Project Manager or other outside support for the project.

Unlike the Family Culture, the Corporate Culture tends to have a lot more knowledge of ERP and is more likely to be successful with their implementation. That said, there are still some risks to this group that you should keep in mind. Your experienced staff may have seen an ERP like SAP with incredibly complex processes. They may not really understand that this was backed by IT departments with dozens or even hundreds of staff that made it all work. There are a few things to watch for related to this.

Tips for a Better Microsoft Dynamics Implementation for Manufacturers with a Corporate Culture

For those of you in the Corporate Culture, here are my top tips.

1. Understand Where Business Central Manufacturing Fits in the Market

There will almost certainly be employees in your environment who have worked with systems where their previous employer has spent 10 million or more implementing an ERP. A very basic Oracle or SAP implementation will run several million dollars at least. 

Dynamics Business Central manufacturing is the best mid-market ERP system in the cloud today, and it will not cost a million dollars to implement (certainly not how Sabre implements it). At the same time, it can’t do what a million-dollar ERP can do. Make sure your staff understand the strengths and weaknesses of Microsoft Dynamics manufacturing and are realistic about what it will do for you.

2. Do Not Have Unrealistic Expectations of Staff

Remember that your team members wear multiple hats and have a lot to do. Trust the consultant’s expertise and recommendations to create an achievable phase 1 expectation. Instead of a 2-year project to implement all features in the first go, pursue a 6-month project to get early adoption and then roll out features every few months until you have the full implementation after 2 years. 

You are better off getting 80% of the benefits of Microsoft Dynamics manufacturing in six months with little or no customization and increasing to 100% of the benefit after 2 years – than getting 0% of the benefit for 2 years and then 100%. 

The latter approach is cheaper too. For those who have heard of Agile project and development, this is that concept applied to ERP.

3. People | Processes | Technology

When your new managers join the business, they may immediately start pushing for a new ERP. Usually, the new team members are shocked at how bad the existing ERP system (or lack of one) is. They know that the processes they want to change need the technology of Microsoft Dynamics manufacturing ERP to make it work.   

The fact is sometimes the existing staff that has been there since it was a Family Culture have no idea how to implement ERP. They certainly don’t have experience using ERP and they don’t understand the ramifications of the integrated nature of the system. 

Talk to your Microsoft Dynamics manufacturing ERP consultants and get their feel for your staff’s skill.  Don’t take it for granted that all your staff can handle all your plans. There has to be a balance between People, Processes, and Technology. If the people are the weak link, you can design a process and use the technology to a level that still generates great benefits while not setting the team up for failure.

Closing Thoughts

At Sabre Limited, we are experts in manufacturing. We stand among the best manufacturing ERP implementation partners across North America. What sets us apart from our competitors is that we use fixed fees instead of time and material billing and we always put the customer first. 

Our areas of expertise include:

• Production Manufacturing
• Job Shop Manufacturing
• Engineer-To-Order / Custom Manufacturing
• Project Manufacturing
• Architectural Manufacturing
• Industrial Equipment Manufacturing

Looking for pricing for Business Central or other Dynamics 365 products? You can find the current pricing at Microsoft.com.

If you’re interested in learning more about what Sabre Limited can offer, we’ve been dedicated to helping small to medium-sized manufacturers learn and adopt Business Central. Reach out, and let’s explore how we can contribute to the success of your manufacturing journey. Contact us at info@sabrelimited.com or call (519) 585-7524. We look forward to hearing from you.