Assembly Orders vs Production Orders in Dynamics 365 Business Central

Dynamics 365 Business Central offers powerful manufacturing capabilities designed to support a range of operational needs. One of the key decisions manufacturing companies must make is whether to use Assembly Orders or Production Orders. Each option serves different use cases and has unique strengths. Understanding the differences can have a direct impact on efficiency, scalability, and cost control.

Assembly vs. Production Orders: Key Similarities

Both Assembly and Production Orders share some foundational features in Business Central, including:

• Compatibility with the Planning Worksheet

• Support for Build-to-Stock and Build-to-Order workflows

• Use of Bills of Materials (BOM)

Core Differences

Despite their similarities, the two order types differ significantly in complexity and functionality:

• Assembly Orders are simpler and primarily use resources. They include limited labor tracking.

• Production Orders are more advanced, using Work Centres and Machine Centres for detailed routing, capacity planning, scheduling, and cost control.

• Licensing: Assembly Orders are available under the Essential license, while Production Orders require a Premium license.

When to Use Production Orders

Production Orders are best suited for complex manufacturing environments. Key advantages include:

• Tracking of setup, run, wait, move, and queue times

• Integration with Work and Machine Centres for precise capacity planning

• Detailed labor cost capture

• Real-time visibility of parts and materials

• Flexible inventory consumption and flushing options

• Advanced support for subcontracting and external vendor processes

Bill of Materials: Assembly vs. Production

Both order types use BOMs with similar structures. This makes transitioning from Assembly to Production Orders relatively straightforward when your manufacturing requirements become more advanced.

Routing Capabilities

Routing defines the sequence of steps in your production process:

• Assembly Orders: Offer simplified routing with minimal labor consideration — ideal for basic builds.

• Production Orders: Feature advanced routing through Work and Machine Centres, enabling detailed planning and scheduling.

Order Execution and Status Tracking

The ability to track and manage order statuses varies by order type:

• Assembly Orders: Offer basic status tracking, which is sufficient for simpler workflows.

• Production Orders: Provide comprehensive status management, delivering better insight into production progress.

Capacity Planning

Capacity planning is essential for managing workloads:

• Assembly Orders: Include limited capacity planning and are best for lower-volume, straightforward operations.

• Production Orders: Enable advanced planning with detailed control over machine and labor scheduling.

Material and Labor Flushing

Flushing refers to how and when materials and labor are recorded during production:

• Assembly Orders: Typically flush materials at the time of completion, which simplifies the process.

• Production Orders: Allow flexible flushing options (manual, forward, backward, etc.), improving accuracy and real-time tracking.

Subcontracting and Outside Services

Managing outsourced operations differs significantly between the two:

• Assembly Orders: Support only basic subcontracting functions.

• Production Orders: Include robust tools for managing subcontractors, including linked purchase orders and accurate cost tracking.

Consumption Tracking

How material and labor usage is recorded:

• Assembly Orders: Record material consumption at the end of production, ideal for quick, uncomplicated tasks.

• Production Orders: Support granular consumption tracking, offering greater accuracy and flexibility.

Summary: Which Should You Choose?

Feature	Assembly Orders	Production Orders
License Required	Essential	Premium
Complexity	Low	High
Labor Tracking	Minimal	Detailed
Capacity Planning	Basic	Advanced
Subcontracting Support	Limited	Full-featured
Routing	Simple	Comprehensive
Flushing Options	End-of-order	Configurable
BOM Compatibility	Yes	Yes

Conclusion

Choosing between Assembly and Production Orders in Business Central isn’t just a licensing decision—it’s a strategic one. For simpler, repeatable manufacturing, Assembly Orders are fast, easy to manage, and cost-effective. For complex operations requiring detailed scheduling, labor tracking, and flexibility, Production Orders are essential.

By aligning your choice with your operational complexity, budget, and long-term scalability, you’ll set your manufacturing organization up for success.