---
title: "Dynamics 365 Supply Chain: Product Configuration Models Explained"
description: Understand how product configuration models in Dynamics 365 Supply Chain empower businesses to manage complex offerings, options, & pricing rules efficiently.
image: https://blog.cfbs-us.com/hubfs/Cofingure%20(1200%20%C3%97%20900%20px).jpg
---
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# Dynamics 365 Supply Chain: Product Configuration Models Explained
03.23.26
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## Product Configuration Models within Dynamics 365
Microsoft Dynamics 365 Finance and Supply Chain Management provides manufacturers who manufacture to order with the product configuration model functionality to meet customers' special requirements. This is not an add-on or ISV product that you need to purchase, it is part of the Dynamics 365 Supply Chain suite.
As the need to configure products becomes the norm, configurability offers a chance for manufacturers to cater to customers' specific needs. By stocking semi-finished goods instead of finished products, manufacturers can reduce the capital tied to inventory.
To successfully shift from a manufacturer to a configured or order setup, analysis of the product structures, identification of product families, and componentization are necessary.
It's important to understand product interfaces, design for reusability, and recognize several product configuration modeling principles like rule-based, dimension-based, and constraint-based modeling.
Within the [Dynamics 365 Supply Chain software](https://cfbs-us.com/software/dynamics-365-fo/), products are configured by answering the attribute questions in the user interface. The configure products user interface is available from sales order lines, sales quotation lines, purchase order lines, production order lines, and project item requirement lines.
## Dynamics 365 offers three product configuration technologies
1. Predefined variants
2. Dimension-based product configuration
3. Constraint-based configuration.
## Watch our demonstration on which this blog was based:
The constraint-based methodology can reduce the number of code lines in models by about fifty percent compared to other modeling principles, resulting in reduced total cost of ownership.
The system also offers functionality to calculate the delivery date based on the specific items, BOM, and route, these specific items, [BOM and route information](https://blog.cfbs-us.com/microsoft-dynamics/understanding-bom-calculations-and-absorption-costing-with-microsoft-dynamics-365-supply-chain)[.](https://blog.cfbs-us.com/microsoft-dynamics/understanding-bom-calculations-and-absorption-costing-with-microsoft-dynamics-365-supply-chain)The delivery date is calculated using a mini MRP explosion based on the dynamic bill of material and routing associated with the part number and configuration ID.
The industrialization period has led to great achievements in producing high-quality and feature-rich products at affordable prices. The economies of scale have made it possible for most people in the industrialized world to buy cars, TVs, household appliances, and other goods that most of us consider a necessary part of everyday life.
As many products have become commodities, a need to differentiate them has arisen. The immediate response of manufacturers to this challenge has been to create very each product so that customers have more alternatives.
This strategy has led to increased forecast challenges and also to an increase in inventory costs and unsold products that become obsolete.
By adopting a configured or order philosophy, Manufacturers have the opportunity to meet customer demand for unique products while reducing or eliminating obsolete items.
When manufactured to stock philosophy is shifted to a configured-to-order philosophy, one immediate challenge that arises is the need for short lead times must be balanced against low inventory levels. It's imperative to analyze your product portfolio to look for patterns and product features and processes.
The goal is to identify components that can be manufactured by the same equipment and used in all variants.
A software partner with experience, like [Clients First Business Solutions,](https://cfbs-us.com/) can effectively assist in the implementation of Microsoft Dynamics 365 Finance and Supply Chain Management to achieve success.
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