Unlike IoT, neural networks, AR, and a swarm of other emerging technology, ERPs aren’t mid-horizon investments for massive companies with hefty R&D budgets and a nest of fancy “idea incubation” chambers. ERPs enjoy near-universal adoption across inventory-based businesses. Unfortunately, having an ERP isn’t the same as having the right ERP. The average ERP launch costs 3 to 4 times the budgeted cost, and nearly 50% fail on the first implementation. With hundreds of tech companies drinking from the fountains of venture, there are plenty of ERPs to choose from.
And many inventory-based businesses choose wrong. We all like to think of ERPs as a way to increase collaboration, reduce data headaches, and improve efficiencies, yet many ERP systems fail to tackle the single largest challenge that inventory-based businesses deal with — inventory. There’s a strange friction that exists between ERPs and Inventory Management Systems. Many ERPs completely fail to tackle inventory management, leaving many consumers to build chaotic, disconnected, and highly siloed data ecosystems.
Luckily, this isn’t always the case. Oracle and Microsoft have both built Tier 1 ERPs with incredible inventory management potential.
Today, we want to talk about how Microsoft Dynamics 365 (D365) can help your business manage inventory. Additionally, we want to discuss some of Microsoft’s shortcomings in the inventory management process and how you can supplement them with highly-integrative solutions. To see a similar post on Oracle’s NetSuite solution, see our post on how Netsuite and StockIQ thrive together.
A Quick Forward on Inventory Management
Inventory management is the gateway to supply chain optimization. 30% of supply chain managers admit that more accurate fulfillment is their top business priority moving forward, and the average retailer is sitting on $1.36 trillion in inventory for every $1 in sales. In total, inventory distortion (e.g., shrinkage, overstock, stockouts, etc.) costs inventory-based businesses over $1 trillion annually. And that’s a big problem. Obviously, this inventory distortion directly impacts cash flow and liquidity, but beyond the pale gates of finances lies an even more significant problem — the customer.
70% of supply chain officers believe that their supply chain is a key driver of their organization’s customer service capabilities. Unfortunately, 34 percent of businesses regularly ship out late orders, and 46% don’t even track inventory. The benefits of inventory management are clear. In fact, businesses with optimized supply chains and inventory management see 15% lower total costs, 50% smaller inventory holdings, and cash-to-cash cycles that are 3x faster than their other competitors.
Fortunately, building that world-class inventory management strategy doesn’t have to be a headache filled with siloed technology and patch-worked solutions. ERPs like Microsoft Dynamics 365 (D365) comes packed with inventory management features, which can be further supplemented by integration-friendly inventory management solutions created by Microsoft Partners.
How Microsoft D365 Can Help With Inventory Management
As you probably expected, Microsoft D365 converges a variety of tools (e.g., supply chain management, finances, operations, etc.) into one single solution. Not only is D365 a tier 1 ERP, but it packs a serious punch. But it also gets a little confusing. D365 is both an ERP and CRM. The ERP component is D365 Finance and Operations (or D365 FO), and the CRM is Dynamics 365 for Talent and Dynamics 365 for Retail/Commerce — which are all combined under a “Unified Operations Plan.”
Yeah! That’s a little confusing. But, to keep things simple, D365 FO comes with both Dynamics for Talent and Dynamics for Retail. So, Dynamics 365 is a hybrid solution. You get a CRM and an ERP. When we’re talking about the pure scale of these solutions, trying to worm our way around inventory management features can get a little complicated. Most of the inventory features are packaged under Dynamics 365 Supply Chain Management — a platform under the umbrella of D365 FO — but there are various other inventory management features trickled throughout the solution.
So, for now, let’s focus less on how you can manage inventory and discuss what you can do with Dynamics 365. Don’t worry! Learning D365 FO isn’t complicated, and you’ll get a barrage of support during your onboarding phase to help you learn the specifics.
Here are some of the features that D365 offers for inventory management:
- Categorize inventory based on number series, location, and bins
- Organize transfer routes for inventory
- Create new inventory cards with detailed information
- Manage available inventory with best-in-class categories and recordkeeping features
- Automated inventory forecast demand and purchase prompts
- Intelligent price tracking for inventory and historical stock out information to expedite supply and demand management
- Multi-location features to move items between warehouses and categorize items across warehouse locations and sub-locations
- Real-time data on every item’s location, availability, and stock
- Streamlined order processing with built-in compliance controls
- Maximize space by defining warehouse layout (including shelf layout) to automatically detect the best areas to store inventory based on size and shape
- And much, much, much more.
In a nutshell, DS365 offers a wealth of inventory management solutions, which can be further supplemented by integration-ready solutions from Microsoft partners.
StockIQ & Microsoft: Creating a Holistic Inventory Management Ecosystem
With so many solutions converging into one platform, Dynamics 365 is a jack-of-all-trades. But what if you need it to be the master of inventory management? We can help. StockIQ’s industry-leading Supply Chain Planning solutions can help you maximize the value of your DS365 ecosystem. With StockIQ, you can forecast demands, put inventory under the microscope, and leverage a world-class replenishment engine to streamline your supply chain management.
With our StockIQ Stock Out engine, you can go beyond knowing that you’re dealing with a stock out; we show you why. We can instantly identify excess inventory and suggest inventory balancing transfers between facilities, help you manage dead inventory, track expiration dates, and define and manage service level targets. In addition, StockIQ comes with our best-of-breed sophisticated inventory classing system and a full-blown MRP engine to handle any bills. And that’s just the beginning. Dynamics 365 was built to tackle millions of nuanced needs. We’re built for a thousand. As Microsoft Silver Partners, StockIQ instantly integrates into MS D365 — giving you the freedom to keep all of your precious data under the same common banner.
Are you ready to maximize your inventory? Do you want to prevent revenue leakage in the area where it has the most impact? Contact us to learn more about how we can help you say goodbye to inventory headaches.
