For many supply chain managers, navigating the hyper-complex, increasingly-globalized supply chain ecosystem is a challenging and restless affair. From political tensions to tariffs, black swan events, and acute climate events, there are plenty of nuanced situations developing daily that require time, energy, and patience to solve.
One of those situations shouldn’t be inventory. Unfortunately, the global cost of inventory distortion (think shrinkage, overstock, stockouts, etc.) is over $1.1 trillion annually. That’s massive! This distortion happens for a variety of reasons. Some manufacturers and retailers are forced to hold onto slow-moving inventory to generate commercial flexibility, while other (often smaller) businesses are dealing with archaic and repetitive manual systems. To be clear, most large organizations have moved to inventory management solutions, so this large-scale issue isn’t necessarily centered around tech adoption (there are certainly cases where the issue lies in adoption). The problem is that many organizations aren’t using the right technology.
To be fair, most mainstream ERPs are customizable, and they have plenty of integrations, so this isn’t always about choosing the wrong ERP; it’s often an issue revolved around. That being said, the ERP landscape is crowded, and finding the right ERP isn’t easy.
Two of the biggest players in the inventory management space are Microsoft and Oracle. Microsoft’s Dynamics ERP and Oracle’s NetSuite are both flexible, scalable, and holistic ERPs with inventory management features, but they each have some differences that can make-or-break your inventory management strategy.
Here’s what you need to know about Dynamics vs. NetSuite.
What is Microsoft Dynamics?
Note: We did a deep dive on Dynamics recently, which goes into some more details on system specifics.
Microsoft Dynamics 365 is a line of products that exist as either CRMs or ERPs. For the purposes of this post, we’ll focus on Dynamics 365 Supply Chain Management. However, there are a variety of unique solutions that sit underneath the banner of “Dynamics 365.” All of these solutions share a few things in common, namely:
- They exist in the Microsoft ecosystem.
- They all share a common cloud framework.
- They all leverage Microsoft Azure for cloud execution.
- They all connect to Power Bi, Power Apps, and other Microsoft offerings.
So, Dynamics 365 Supply Chain Management is an intelligent supply chain management and inventory management solution that can be deployed on-premise or via the cloud using Microsoft Azure. For the moment, we’ll ignore the pros and cons of traditional on-premise deployment vs. cloud deployment (you can read some of the feature differences) and focus on the core value props of Dynamics in relation to inventory.
Important: Dynamics 365 Supply Chain Management also features cost accounting, asset management, IoT, sales, marketing, procurement, and a variety of other features that are bundled together, so inventory management isn’t the only value lever on offer in the Dynamics ecosystem.
Microsoft breaks down Dynamics 365 Supply Chain Management’s inventory features into 5 core buckets:
- Inbound operations: Features in inbound operations (which primarily exist in the “Arrival” tab) help supply chain managers go through the inbound flow. This includes starting the inventory arrival process, tracking incoming inventory, and journaling incoming inventory requirements.
- Quality Assurance (QA): Obviously, QA is a critical component of the inbound flow of goods. You need to ensure that incoming inventory meets quality guidelines before it touches the shelves and that conformance guidelines are met. Dynamics helps you set up automated QA triggers, document QA tests, correct for nonconformance, validate orders, perform correction handling, quarantine orders, etc. In other words, Dynamics has end-to-end QA capabilities.
- Inventory activities: You can post a variety of physical inventory transactions using Dynamics, including movement, counting, arrival, etc. This is a massive chunk of the Dynamics offerings, and you can dive into some additional details on the Dynamics page.
- Outbound operations: Dynamics also helps you link sales and shipping requirements to picking lists to help you rapidly and automatically generate picking requirements and shipping needs based on incoming sales data.
- Inventory control: Again, this is a massive bucket. Dynamics 365 has a variety of inventory control features, and they’re comparable to other similar apps.
To be clear, we can’t do a complete breakdown of every feature. It would take tens of thousands of words. So, the core point is that Dynamics 365 Supply Chain Management is an end-to-end inventory management solution that starts by helping you track inbound orders and QA and ends with shipping, picking, and inventory control.
What is NetSuite?
Note: We covered a ton of NetSuite features in a recent blog post, and these may help you identify some critical capabilities that you may need — or not need.
Like Dynamics 365, NetSuite is an ERP that packs plenty of inventory management features. In this case, supply chain managers will use NetSuite’s “Warehouse Fulfillment” features to handle inventory needs. Like Dynamics 365, NetSuite handles inbound logistics, outbound logistics, and inventory management — though they pack these into three buckets instead of five.
We won’t dive too deep into features, since they’re all comparable to Dynamics. We’ll admit that NetSuite breaks their products up into more digestible compartments, but that’s primarily due to how they market their solution. Microsoft Dynamics is a hyper-customizable solution meant to meet best-fit criteria (so the way you utilize Dynamics will vary from business-to-business), while NetSuite is more of an all-in-one package that’s leveraged nearly identically across businesses. There are obviously pros and cons to both types of ERPs, but it’s important to understand that NetSuite is pretty plug-and-play post-integration while Dynamics will take some setup.
Dynamics vs. NetSuite: Comparing Oranges to Mandarins
Yes: NetSuite and Dynamics are eerily similar. They’re both inventory management solutions offered by multi-billion-dollar enterprises, and they both have features catering to businesses of all shapes-and-sizes. But they aren’t identical. Remember, most inventory frictions aren’t caused by a lack of inventory management technology. Many are caused by using the wrong technology for your business. So, these small, minute feature variations can be the difference between a hyper-profitable inventory flow and a cash-strapped warehouse hoarding troves of obsolete merchandise.
Again, we highly recommend checking out our posts covering the smaller specifics, since we’re focusing on the broad details in this post. Here are the 4 key differences between Dynamics and NetSuite that you need to understand.
1. Dynamics & NetSuite Have Similar (But Different) Scalability
Both NetSuite and Microsoft can be scaled from small-to-enterprise. And both are incredibly powerful in terms of ease-of-scale. However, they both handle scaling differently. NetSuite has pretty straight-forward scaling. You upgrade the solution, invest in more cloud space, and instantly scale to meet productivity demands. Dynamics is a little more complicated. Since most Dynamics users will have their solutions set up to meet their niche business needs, scaling requires a little more thought and effort, though the result is often more fine-tuned to your business.
2. Dynamics Leverages “Partners” for Implementation: NetSuite Keeps it In-house
Again, that core difference (i.e., Dynamics is customization-heavy and NetSuite is more straightforward) also makes a huge difference in implementation. Microsoft leverages “Microsoft Partners” to help you implement Dynamics. These are third-party vendors that work closely with your company to deploy a best-fit solution. NetSuite handles implementation themselves — since there isn’t as much setup or customization required.
This isn’t a pro or con on either business. And both types of implementation have their strong and weak points.
3. Dynamics is Better for Niche Business Processes, But NetSuite Has Less Demanding Change Management
Dynamics is far more customizable and niche-friendly than NetSuite. That’s not always a pro. Implementing Dynamics requires some significant change management, since you’re essentially integrating a unique solution into your stack. NetSuite is used nearly identically across businesses, so it’s easier to use traditional guides and documentation to follow NetSuite’s flow.
4. Dynamics Has Better Upgrade Paths, But NetSuite Has More Carefree Hosting
We love NetSuite. But we aren’t huge fans of its update process. NetSuite pushes out updates automatically — and often without warning. Microsoft typically advertises updates, and (if you’re on-premise), those updates are semi-optional. In other words, you can wait a while to update with Dynamics; NetSuite is automatic. You can use both solutions on-premise or in the cloud, but almost everyone is leveraging cloud-based solutions in today’s hyper-competitive ecosystem. We find that NetSuite has a more mature cloud architecture (they’ve been SaaS before the word was trendy), but Azure may have a little more fluidity in terms of scaling and upgrade paths.
Which Solution is Right For You?
To keep things simple: Dynamics is a scalable, customizable, and feature-rich solution that’s ideal for companies operating in a niche space. NetSuite is a powerful, feature-rich solution that’s ideal for many standard warehouses and retailers, especially if you want a simple plug-and-play solution that instantly grants you baseline capabilities. One isn’t better than the other. We’ve seen organizations attempt to adopt Dynamics only to discover that the change management and vendor-driven implementation diluted the value out of their supply chain management investment, and we’ve seen companies invest in NetSuite only to find they needed some niche workflows they couldn’t set up within the system itself.
Here’s the big secret: neither solution is perfect. To achieve full-scale inventory management, you need some third-party vendor tools that enable more complex, AI-driven inventory management features that are lacking from both solutions. Are you a NetSuite or Dynamics user looking to massively upgrade their inventory management capabilities? Contact us.
