How Agentic AI in Business Central Helps U.S. Manufacturing SMBs Reduce Operational Costs

August 14th, 2025 Intech Systems AI, Business Central

Introduction

U.S. manufacturing SMBs are drowning in a crisis of unprecedented scale. With tariffs hitting 54% on Chinese imports and 25% on steel and aluminium, inflation has become the primary concern for 58% of small manufacturers.

The numbers are merciless for SMBs. They operate at just 60% of the productivity levels of their larger competitors, but account for 98% of all manufacturing companies that employ 4.8 million Americans.

While Fortune 500 companies are employing AI-ready analysts and autonomous systems, SMBs are left manually tracking inventory and making gut-driven decisions. This disparity in productivity isn’t just a competitive concern; it’s a matter of survival.

The Challenges for SMBs

Small and mid-sized manufacturers face multiple pressures:

• Rising operational costs due to tariffs, inflation, and supply chain disruptions.
• Manual processes slow decision-making and reduce efficiency.
• Limited resources to invest in AI talent or high-end enterprise systems.
• Competitive pressure from larger players with advanced technology.

Without intervention, these factors will continue to squeeze margins and threaten long-term viability.

In this blog, we will dive into how Agentic AI in Business Central is helping U.S. manufacturing SMBs to emerge stronger, leaner, and positioned for long-term growth.

What is Agentic AI, and how will Agentic AI in Business Central help?

Agentic AI is a software that thinks, determines, and acts autonomously in your business processes. Traditionally, automation is predetermined based on if/then rules, but Agentic AI agents analyse context, make decisions, and continuously learn from results.

Microsoft Business Central is the ideal home for Agentic AI agents. Business Central is a complete ERP system that already runs your core manufacturing process, such as inventory, production scheduling, financials, and supply chain etc.

When you integrate Agentic AI to Business Central, you are not just automating an activity; you are augmenting Business Central with an intelligent layer of decision-making that anticipates the problem, continually optimizes the process in real time, and executes sophisticated workflows without human intervention.

Traditional automation considers “do this when that happens.” Agentic AI asks, “What’s the best action from my operational conditions, historical patterns, and business objectives?” This combination means Business Central is no longer a tidy store of your manufacturing process, but rather a self-managing business intelligence platform that optimizes your manufacturing processes continuously.

Top 4 Cost-Cutting Opportunities for Manufacturing SMBs using Dynamics 365 Business Central:

Let us explore exactly where Agentic AI in Business Central facilitates measurable cost savings that hit your bottom line within months, not years.

Direct Labor Cost Reduction:

Your administrative burden is costing you more than you imagine. Agentic AI agents will eliminate 50% of your data entry effort, and they will reduce manual calculations by 75%.

Did you know SMB’s using AI-enabled process automation report operational cost savings of 22-33%, and two-thirds realize a cost reduction of 12% in the first couple of years.

These are not small increments, but incremental improvements that free your team up to do strategic work instead of repetitive work.

Inventory and Supply Chain Optimization

Inventory sitting on shelves is cash burning a hole in your pocket. However, AI-driven Just-In-Time delivery systems combined with Business Central can save up to 30% on inventory expenses through demand prediction that your spreadsheets never could.

At the same time, predictive maintenance algorithms can help you avoid the catastrophes that keep you awake at night. As a result, your equipment downtime will get reduced by 35-55% and you can also avoid those expense-heavy emergency repairs that disrupt production schedules.

Now, what about material waste? That’s cash going directly into the trash. Agentic AI can streamline your material utilization and raise output, returning as much as 30% in cost reduction by maximizing every raw material’s dollar value.

Quality Control and Rework Prevention

Nothing destroys profitability faster than shipping bad products. Real-time quality inspection with artificial intelligence eliminates quality defects by 60% through relentless inspection that never tires or loses focus.  Not only this, but early anomaly detection also prevents problems before they become expensive mistakes, reducing defect rates by up to 45%. Every defect prevented is money saved on materials, labour, and customer relationships.

Energy and Resource Optimization

Your electricity bill does not have to be a fixed cost. Smart energy management by Agentic AI can reduce energy costs up to 25% by streamlining consumption patterns according to production timelines, peak tariffs, and equipment efficiency. These AI agents constantly reconcile process efficiency with resource availability and make split-second choices that aggregate into substantial savings over time.

In this way, these cost savings can increase your margins 15-25% in the first year, and the funds that go directly to your bottom line or pay for your next growth spurt.

Why This Matters for SMBs?

Agentic AI in Business Central empowers SMBs to:

• Automating processes and streamlining operations allows employees to do more strategic work.
• Make better pricing, marketing, and inventory decisions to increase the profitability and efficiency of businesses.
• Attract and retain customers through personalized recommendations and improved experiences.
• Identify opportunities for expansion and enter new markets through data-driven insights.

These advantages, combined with Microsoft’s robust ERP capabilities and the expertise of certified Microsoft Partners, position SMBs for growth even in competitive markets.

Final Sayings

Here is the irony: Fortune 500 CEOs won’t admit: your size is your superpower. While large enterprises drown in committee approvals and bureaucratic paralysis, you can implement Agentic AI in Business Central within weeks, not quarters.

You are witnessing the end of reactive cost management. Early adopting SMBs are transforming from playing defence to offense by anticipating challenges, optimizing continuously, and turning operations into 24/7 profit-generating machines. They are already pulling ahead of larger competitors stuck in legacy systems.

The time for evaluation is now. Start with pilot projects in your biggest cost centres, like inventory optimization, predictive maintenance, or quality control.

Let AI take care of the backend, while you focus on scaling your business.

Swipe through to learn how Copilot in Business Central can transform your operations.

Learn more about our Business Central Implementation Plans

Remember, Microsoft Business Central with Agentic AI is not just software; it is your competitive weapon. Deploy it in 2025, lead your industry by 2030.

About Intech Systems:

Intech Systems is a three-cloud Microsoft-certified partner that boasts deep expertise in providing digital transformation solutions for organizations by leveraging the Microsoft 365, Dynamics 365, and Azure solution stack. Intech is recognized as a top-tier Microsoft implementation partner globally and specializes in transformative technology solutions such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), Business Process Automation, Business Intelligence, Cloud Infrastructure, Data Management, Productivity & Collaboration and Generative AI (Gen-AI) solutions. As a trusted Microsoft Solutions Partner, we are capable of doing complex technology implementations catered to an organization’s specific needs & also rapid solution implementation such as our Microsoft Dynamics 365 Business Central implementation packages. We pair our implementations with end-to-end customer support, offshore development & 3rd party integrations. With offices in India, USA (United States of America), and Singapore, we work with clients across globe to empower businesses with cutting-edge technology solutions. Our latest services aim at delivering business ready AI solutions to the customer, like our  Microsoft Copilot Consulting Services & Solutions for small, medium & large enterprises. Intech’s expertise lies in building software solutions for Manufacturing, Professional Services & Healthcare.  Our Dealer Management System, Sales and Service CRM for Manufacturing, Field Force Automation for Pharmaceuticals and Manufacturing Central are some of our leading industry solutions. Intech’s vision is to catalyze digital futures for operation-centric industries globally, we are at the forefront of innovation, helping organizations drive growth and innovation like never before. Contact Us to learn more.