BC 2026 Wave 1 - what's actually changing in Manufacturing

Microsoft published the 2026 Wave 1 release plan in March, with production rollout starting on the 1st of April. This is version 28. For partners and consultants working in the manufacturing module, this wave is more interesting than most - two significant changes plus a handful of smaller improvements worth knowing about.

Quality Management - finally native

The headline change. Until now, BC has not had a proper out-of-the-box quality management capability, which meant most manufacturing clients either bought an ISV add-on or had something custom built. Wave 1 introduces a native Quality Management extension that closes this gap.

The extension installs automatically on new environments. For upgraded environments, it's available from AppSource. Public preview ran from November 2025, so it has had a few months of beta testing before going GA in April.

Inspections can be triggered at four points:

  • Purchase Receipts - after posting, with or without warehouse handling. Inspect goods as they come in, before they hit available inventory.
  • Production Output - either manually or automatically via flushing. Hooks into the standard output posting flow.
  • Assembly Output - same model, manual or via assembly-to-order.
  • Manual checks and scheduled checks - for cycle inspections or random sampling.

The extension covers the standard quality management lifecycle: defining standards, tracking inspections, managing non-conformities, and routing inspection plans. It also integrates with lot tracking, which is essential for food and pharmaceutical clients.

Practical take - clients running a third-party QC tool should evaluate the native extension before their next renewal cycle. For smaller manufacturers who have been managing quality through item attributes and Excel, this is a meaningful upgrade. The extension-based delivery is the right architectural choice as it allows Microsoft to iterate without dragging the base app version with each change.

The interaction with reservations and tracking entries on production output is the area worth testing carefully, particularly for anyone who has dealt with the planning engine and lot tracking edge cases (T337/T336 territory).

Subcontracting - rebuilt properly

The other major change. BC's subcontracting story has long been thin compared to specialist manufacturing solutions, and most implementations involving outsourced operations have required workarounds - dummy work centres, bespoke purchase order flows, or bolt-on extensions for inbound and outbound logistics.

Wave 1 reworks this. Key changes:

  • Item tracking now flows through subcontractor operations - both outbound (material sent to the subcontractor) and inbound (returned to the principal). This is significant for regulated industries that need to trace serials or lots through third-party operations.
  • Warehouse handling on subcontractor flows - again both directions. Allows proper bin and zone logic instead of magical inventory movements.
  • Activated via Feature Management - the cutover is controlled by the customer, which means proper sandbox testing before flipping the switch in production.

One important note for partners working with Italian clients - the existing Italian local subcontracting functionality is being deprecated. Migration needs to be planned ahead of the June GA date, particularly where customisation has been built around the existing flow.

Smaller improvements worth knowing

Several changes that won't make the keynote slides but quietly improve daily life:

Item variants. Attributes can now be managed at variant level from the variants list, with a sync option that pushes parent item attributes down to all variants. Useful for anyone who has previously written AL to keep variant attributes in sync. Item-variant pictures are also now supported.

Approvals on requisition worksheet and item journals. Standard approval workflow now extends to these areas - functionality that has previously been custom-built on multiple implementations.

Planning behaviour improvements. Microsoft's description is vague, but the MPS/MRP scenarios are worth retesting. Anyone affected by the v27 lot-tracking-causes-duplicate-planning-lines issue should check whether 28 fixes it before building further workarounds.

Drop shipment. Improvements to PO matching and posting accuracy, intended to reduce manual reconciliation.

Production operations. Filter and description fields added to production order pages - small but welcome for users who spend their day on those pages.

Developer and AL implications

A few items relevant to AL development for manufacturing:

  • MCP Server is now standard. It's listed in Feature Management in 28 but cannot actually be disabled - it's enabled for everyone. Microsoft has stated it will be removed from Feature Management in a future update. Worth attention from anyone who has been treating MCP as experimental.
  • Power BI Supply Chain app embedded at no extra cost. Worth evaluating against existing custom Power BI dashboards on top of BC manufacturing data.
  • Analysis Mode v2 is AL-deployable with 36 new read-only APIs added. Useful for surfacing manufacturing data outside BC.

Summary

Manufacturing has been somewhat overlooked in recent BC waves - finance has had the Copilot investments, supply chain has had the headlines, and manufacturing has typically received small fixes rather than substantial functionality. Wave 1 is different. Native quality management and properly reworked subcontracting are two areas manufacturing customers have been asking for, and both have shipped.

This is not a replacement for specialist MES or APS tools. But for mid-sized manufacturers running BC with custom AL bridging the gaps, the gaps are now considerably smaller.

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