Formulas and formula versions - Supply Chain Management | Dynamics 365 (2023)

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A formula defines the materials, ingredients, and outcomes of a specific process in process manufacturing. Together with the corresponding route, the formula defines the whole process in process manufacturing. Formulas are used to plan and produce products in process manufacturing.

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A formula consists of the ingredients and quantities that are required in order to produce a specific quantity of a formula item. Depending on the task that you perform, you can access formula functionality from Inventory and warehouse management or Product information management.

Formulas and formula lines

A formula consists of one or more formula lines that identify the ingredients or items that make up the formula. A formula line can contain Bill of materials (BOM) items, formula items, catch-weight items, purchased items, co-products, or by-products. Because many items are used in multiple products, an item can be used in more than one formula.

An example of a formula is the formula for a chocolate chip cookie. The ingredients for this formula use multiple lines, such as flour, sugar, eggs, butter, and chocolate chips. The formula for the chocolate chip cookie contains ingredients that are likely used in other formulas. While you make the chocolate chip cookies, there might be leftovers, such as crumbs, or some of the cookies might be overbaked or undercooked. These items can be set up as co-products or by-products, depending on the production operations.

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When you create a formula line, you use the line type to indicate how the system should handle the line when you run master planning and produce batch orders. Each line type gives a different result. The following table describes the line types that you can select.

Line typeDescription
ItemSelect Item when the item is a raw material or a semi-finished item that is picked from inventory or when the item is a service.
PhantomSelect Phantom when you want to explode any lower-level formula items that are contained on formula lines. When you estimate the batch order, and the formula items are exploded, the component items are listed as formula lines on the batch order. Additionally, the corresponding routes are added to the production route. Formula items are exploded by using the current configuration. When you use the Phantom line type, you can handle production and measurement configurations that occur at different formula levels. If you select Phantom for a product on the Engineer FastTab of the Released product details page and then use this product in a formula, the line type of the formula line is changed to Phantom. You can't select Phantom for a catch-weight item, or for items where the production type is Co-product, By-product, or Planning item.
Pegged supplySelect Pegged supply to create a batch order, production order, kanban, transfer order, or purchase order for the ingredient that is contained on the formula line. The related order is determined based on the default order settings and the production type of the ingredient, and is created when you estimate the batch order. The required ingredient quantities are reserved for the batch order.
VendorSelect Vendor if the production process uses a subcontractor, and you want to create a subproduction or purchase order for the subcontractor. The service or work that the subcontractor performs must be created by using a formula item or service item. You can attach the item to the parent item as a formula line. The route must contain an operation that is assigned to the subcontractor's operations resource. This operation is attached to the formula line by using the Oper. No. field.

Formula versions

When you create a new formula, you must first create a formula version before you add the formula line items and their specific characteristics. Every formula must have at least one version. The Approved button on a formula version becomes available only after a version record has been successfully saved. Each formula version record is associated with one or many co-products and by-products that can be produced as you produce the finished product. Many products can be made from the same ingredients in different batch sizes, in multiples, or by using different yields. You can create as many versions of a formula as you require.

To manage multiple active formula versions, use effective date ranges or "from" quantity fields. Multiple active formula versions can exist only if the date range and "from" quantity don't overlap.

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Unlike BOMs, where one BOM is often associated with many BOM versions, only one formula version typically exists per formula. Remember that only one formula version can be activated for the coverage dimensions and quantity for a given product. However, many formula versions might exist for other reasons, and you can manually select them when you create a batch order.

Approve and activate formulas and formula versions

Formulas and formula versions must be approved before they can be used for planning and production. Formulas are usually activated before they're used. However, during production, you can select a formula version that is approved, but that isn't activated.

To help secure a formula or formula version, you can set the Block editing and Block removal of approval parameters on the Production control parameters page.

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If you select Block editing, and the formula is approved, no fields on the formula lines can be deleted or edited. However, if you remove the approval of the formula, you can delete and modify the formula lines. You can also create new formulas and new formula versions.

If you select Block removal of approval, you can't remove the approval of an approved formula or formula version. However, you can create new formulas and new formula versions, and you can remove the activation of the formula version.

You can add more levels of control by using the electronic signature functionality. When a user is set up so that an electronic signature is required at the time of formula approval, a Signature page appears when the formula is activated. The user must be authorized to sign electronically, and the certificate must be successfully validated before the change can be committed. If the signature can't be authenticated, the approval or removal of approval is denied, and the change that initiated the approval or removal of approval is returned to its original state.

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Use the Scalable feature

The Scalable feature is available only if all the item components in the formula are set to Variable consumption. The feature isn't available if item components are set to Fixed consumption or Step consumption. When the Scalable feature is used, if you change an ingredient in a formula, the quantity of the other ingredients that you select is adjusted. The size of the formula is also adjusted. Likewise, if you change the formula size, the quantity of all scalable ingredients is changed. This feature is intended specifically for formula creation and maintenance. It doesn't indicate whether the quantity of an ingredient will be scaled up or down on a batch order.

Use Step consumption

Step consumption eliminates the requirement that you must enter a quantity on the Formula line tab for an ingredient. Instead, Step consumption is configured so that it has a From series value and a Quantity value. The information from the Step consumption per series record that satisfies the quantity on the batch order is selected. Step consumption is useful when the consumption rate isn't linear with respect to the batch order size and only increases the requirement when a specific quantity threshold is met. To enable this feature for a new formula, under the Consumption calculation group, change the formula setting for the applicable ingredient from Standard to Step. You specify this consumption method on the Setup tab of the Formula line page.


What is a formula version in D365? ›

Each formula version record is associated with one or many co-products and by-products that can be produced as you produce the finished product. Many products can be made from the same ingredients in different batch sizes, in multiples, or by using different yields.

What is the difference between BOM and formula in Dynamics 365? ›

A formula is a subtype of BOM that is typically used for process manufacturing. In addition to components and ingredients, a formula describes co-products and by-products. In the actual version, the definition of co-products and by-products for the formula requires the formula version.

Which three modules are included in dynamics 365 supply chain management? ›

  • Marketing & Sales.
  • Service.
  • Commerce.
  • Supply chain.
  • Finance.

What are the capabilities of Microsoft Dynamics 365 supply chain management? ›

Dynamics 365 Supply Chain Management capabilities. Mitigate supply chain issues with robust capabilities such as real-time visibility, agile planning, and advanced insights.

What are the different versions of Dynamics 365? ›

The on-premises application, called Dynamics 365 Customer Engagement contained the following applications:
  • Dynamics 365 for Sales.
  • Dynamics 365 for Customer Service.
  • Dynamics 365 for Marketing.
  • Dynamics 365 for Field Service.
  • Dynamics 365 for Project Service Automation.

What is the difference between a formula and a built in function? ›

What is a Formula vs Function in Excel? A Formula is an equation designed by a user in Excel, while a Function is a predefined calculation in the spreadsheet application.

What are BOM versions? ›

Each Bom Version relates to a specific item, while the BOMTable record does not. So, to accomplish what you need, you need to create two BOMs, one with the spring from vendor A(BOM 1) and one with the spring from vendor b (BOM 2).

What are the two types of BOM? ›

The two main types of BOMs are engineering BOMs and manufacturing BOMs. An engineering bill of materials defines the design of the finished product. It includes all alternative and substitute part numbers and parts contained in the drawing notes.

Is BOM the same as cogs? ›

The Bill of Materials (BOM) is just a subset of the Cost of Goods Sold (COGS), and if you aren't selling your product for more than your COGS, you will lose money and go out of business.

What are the five 5 basic components of supply chain management? ›

Supply chain management has five key elements—planning, sourcing raw materials, manufacturing, delivery, and returns.

Which two modules are included in Dynamics 365 supply chain management? ›

Supply chain management configuration and processing. The transportation management features, and the warehouse management features.

What are the six 6 functional elements of supply chain management? ›

6 Critical Elements of Successful Supply Chain Management
  • Flexibility. ...
  • Data. ...
  • Focus On Your End Customer. ...
  • Full Integration. ...
  • Innovation. ...
  • Performance Measurement.

Is Dynamics 365 a CRM or ERP? ›

Dynamics 365 gives you a unified view of your business

Streamline your everyday financials and operations with Dynamics 365—an ERP software solution that helps you collaborate effectively, optimize business tasks, and drive growth.

How many versions of Dynamics 365 are there? ›

Modules and Applications within the Dynamics 365 and Power Platform - Explained. Dynamics 365 Sales – A customer relationship management (CRM) for sales management, customer profiles, and pipeline. It comes in two major versions, Sales Enterprise and the smaller Sales Professional.

What is the latest Dynamics 365 version? ›

We have published the 2021 release wave 2 plans for Dynamics 365, a compilation of new capabilities that will be released October 2021 through March 2022. The 2022 release wave 2 plans will be provided once the documentation is ready.

What is the current version of Microsoft Dynamics 365? ›

February 2, 2022

To use the updated apps, you'll need Dynamics 365 Guides solution version 700.0.

Which is an example of a formula? ›

Formula is an expression that calculates values in a cell or in a range of cells. For example, =A2+A2+A3+A4 is a formula that adds up the values in cells A2 through A4.

What is the difference between built-in functions and modules? ›

Modules and functions may appear similar to their purpose, which is reusability. However, modules are on a larger scale because of their use in different classes, functions, and attributes to fulfil larger functionalities. At the same time, functions are more particular to specific activities on a smaller scale.

What are the types of built-in functions? ›

Built-in functions
  • Standard built-in functions.
  • Aggregates (set functions)
  • ABS or ABSVAL function.
  • ACOS function. The ACOS function returns the arc cosine of a specified number.
  • ASIN function. The ASIN function returns the arc sine of a specified number.
  • ATAN function. ...
  • ATAN2 function. ...
  • AVG function.

What is the difference between e BOM and M BOM? ›

MBOM (Manufacturing Bill of Materials)

engineering BOMs, the main difference between them is that the EBOM describes how the product is functionally designed, and the MBOM describes all parts and assemblies needed to actually manufacture the product.

What is BOM XML vs POM XML? ›

A Maven pom defines the project structure including the stated dependencies. A bom defines the complete bill of materials of what dependencies are actually used - the effective dependencies.

What is BOM revision? ›

A BOM revision enables you to update a BOM's details throughout the product lifecycle. A BOM revision also provides an accessible revisions history. Use revisions to compare and track cost savings when many BOM revisions are used in production.

What is the difference between WBS BOM and material BOM? ›

WBS BOM's are created specific to WBS element of Project. Material BOM's are for Production Planning.

Which BOM is the simplest BOM? ›

Single-level bill of materials

This is a simple list with each assembly or subassembly needed for a product shown once, with the corresponding quantity required for each product. This is an easy BOM to develop.

How do you calculate bill of materials? ›

When a manufacturing order is created, the BOM is multiplied by the order quantity to calculate the total material requirements. The bill of materials usually consists of several parts, and it could also include other consumables that don't make up the product (e.g. gloves, water, fasteners, etc.).

What are the 5 parts of a bill of materials? ›

What is included in a bill of materials? Most BOMs include the following elements: BOM level; the part number, name, description and quantity; cost; and the unit of measure. While the bill of materials includes components and parts, it doesn't include labor.

What is the difference between MTO and BOM? ›

Difference Between BOM and MTO

BOM lists all the components for the construction and fabrication of an item. Piping BOM is used as a reference for the warehouse to give the material to the fabricator. Whereas, MTO lists all items for purchase or procurement. It is a reference for material cost calculation.

What is a BOM SKU? ›

Many businesses use stockkeeping units (SKUs) in their inventory management processes. Because SKUs often contain important information about the items, they're also valuable in production processes. You can leverage the information from SKUs by assigning them to production bills of material (BOMs) and routes.

What are the four 4 stages of supply chains? ›

What are the components of your supply chain you should be focusing on right now?
  • INTEGRATION. Integration starts at your strategic planning phase and is critical throughout your communications and information sharing and data analysis and storage. ...

What are the 4 supply chain flows? ›

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

What are the three 3 main goals of SCM? ›

The Importance of Supply Chain Management

These strategic goals include ensuring efficiency, improving quality, and optimizing transportation. These goals will help you reduce costs, increase efficiency and profits, and can even help you gain a competitive advantage within your industry.

What are the 7 R's of supply chain management? ›

So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

What are the 4 P's of supply chain management? ›

Jerome McCarthy around the four P's, i.e., Product, Price Place and Promotion. (Perrault, McCarthy, Cannon) It is important for Marketing Managers to know, understand and manage these four P's.

What are the 4 main functions of SCM? ›

The five functions of supply chain management include the following:
  • Purchasing. The first function of supply chain management is purchasing. ...
  • Operations. ...
  • Logistics. ...
  • Resource Management. ...
  • Information Workflow.
Feb 4, 2021

What are the 7 supply chain functions? ›

Supply Chain includes purchasing, manufacturing, warehousing, transportation, customer service, demand planning, supply planning and Supply Chain management.

What are the top 3 SCM issues? ›

The three ways all of these supply chain issues are affecting consumers most is: products aren't as available as they normally are. it's taking longer to get items shipped to stores. some products will cost more.

How many types of SCM are there? ›

There are four types of supply chain models depending on the nature of the business and business goals.

How many phases are there in the SCM? ›

The supply chain management process is composed of four main parts: demand management, supply management, S&OP, and product portfolio management.

What are the 5S in supply chain? ›

5S stands for the 5 steps of this methodology: Sort, Set in Order, Shine, Standardize, Sustain. These steps involve going through everything in a space, deciding what's necessary and what isn't, putting things in order, cleaning, and setting up procedures for performing these tasks on a regular basis.

What is Six Sigma model in supply chain? ›

The Six Sigma method was originally developed to combat defects in manufacturing, lowering them within an acceptable tolerance. The in-depth insight into quality control processes provided by Six Sigma analysis can be invaluable to any supply chain manager.

Does Dynamics 365 use SQL? ›

Dynamics 365 Server requires an instance of SQL Server Reporting Services be installed, running, and available. All installations of the supported SQL Server editions can be used as the reporting server.

Is Dynamics 365 better than SAP? ›

Microsoft Dynamics 365 outshines SAP Business One as it comes equipped with several features which provide scalability, flexibility, and lower implementation and ownership costs, and significantly benefit both start-ups and the largest of enterprises.

What programming language is Dynamics 365? ›

As we mentioned, X++ is the main programming language of Dynamics AX, now rebranded as Dynamics 365 for Finance and Operations. This programming language powers all the items and elements that you can find within this Microsoft environment.

What is a formula in Microsoft? ›

In Microsoft Excel, a formula is an expression that operates on values in a range of cells. These formulas return a result, even when it is an error. Excel formulas enable you to perform calculations such as addition, subtraction, multiplication, and division.

What is formula evaluation? ›

The Evaluate Formula feature walks you through each argument in a formula to help identify and fix any mistakes. You can also use it to understand complex formulas, seeing how each part of a nested function is calculated to reach the final result.

What are the three types of formula? ›

There are three main types of chemical formulas: empirical, molecular and structural.

Which is an example of a formula in Microsoft? ›

Let's take another variation of a simple formula. Type =5+2*3 in another cell and press Enter or Return. Excel multiplies the last two numbers and adds the first number to the result.

How do you use Microsoft formulas? ›

Enter a formula that contains a built-in function
  1. Select an empty cell.
  2. Type an equal sign = and then type a function. For example, =SUM for getting the total sales.
  3. Type an opening parenthesis (.
  4. Select the range of cells, and then type a closing parenthesis).
  5. Press Enter to get the result.

What is the difference between Dynamics and Dynamics 365? ›

Dynamics 365 is a combined CRM and ERP product that includes full Dynamics AX suite for ERP and the Business Edition includes the financial suite built from Dynamics NAV. Unlike its predecessor, Dynamics 365 eliminates the traditional silos that exist between external (CRM) and internal (ERP) information.

What are the 4 types of formula? ›

The forms commonly encountered are empirical, molecular, structural, and projection formulas. An empirical formula consists of symbols representing elements in a compound, such as Na for sodium and Cl for chlorine, and subscripts indicating the relative number of atoms of each constituent element.

What are the 4 evaluation methods? ›

The main types of evaluation are process, impact, outcome and summative evaluation.

How do I evaluate a formula in Office 365? ›

Select the cell that you want to evaluate. Only one cell can be evaluated at a time. On the Formulas tab, in the Formula Auditing group, click Evaluate Formula. Click Evaluate to examine the value of the underlined reference.


1. Microsoft Dynamics 365 Supply Chain Management, 2022 Release wave 1
(Dynamics Podcast)
2. Microsoft Dynamics 365 Finance and Supply Chain Management Integration
3. Engineering Change Management in Dynamics 365 SCM
(Rakesh Darge)
4. Intuiflow For Microsoft Dynamics 365 BC & F&O
(Intuiflow by Demand Driven Technologies)
5. Session 9 - Manufacturing Concepts (A) BOM Creation,Discrete vs Process ( Microsoft Dynamics 365 )
(VIP Learning Point)
6. Demand Forecasting in Dynamics 365 SCM P1
(Microsoft Tutorials & Training)
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