Supply chains have the potential to connect people, experiences, and goods together in powerful ways. The total impact of your supply chain — from sourcing to shipping — isn’t just a value-driver that bridges your products and services to profits: it’s the foundational heart of your entire company. Unfortunately, managing that supply chain is a nightmare.
Virtually every supply chain manager leverages technology to help them manage their inventory. Yet, recent surveys suggest that 85 percent of them struggle with “inefficient” digital technologies. In other words, the pressure to adopt technology doesn’t always go as planned, and many supply chain managers end up with clunky, inefficient systems that lack the tried-and-true features they need to make sustainable and meaningful changes to their supply chain.
In an effort to cut down on this waste, we want to highlight how specific systems — Dynamics 365 in conjunction with StockIQ in this case — help supply chain managers navigate supply chain planning. As a foreword, we’re ERP-agnostic. This post isn’t a promotional piece. This is an accurate look at some of the features that Dynamics 365 brings to the table. These features may (or may not) be the types of features you’re looking for in your supply chain solution. You should use this post to help you identify some of Dynamics’ capabilities and discuss them in further detail with stakeholders.
A Forward on the Importance of Supply Chain Planning
We’re in the midst of a surreal, accelerated, and notably awkward period of supply chain planning. Last year, 55% of companies downgraded their growth outlook, with 94% admitting that they were experiencing significant supply chain disruptions. There’s a microscopic lens hovering above supply chain management that demands smarter, faster, and more purpose-driven planning and management strategies. But, we’re not going to peel away the layers of that trendy onion.
Despite the disruption, economic turmoil, and stress, there’s something critical that all supply chain managers should remember: many things haven’t changed. Customers still want the best prices. People still crave on-time shipping. And companies still need to put a stopper on any inventory leakage, quality control issues, and stock-out issues.
It’s hard to navigate the current supply chain management ecosystem. Massive research firms are calling for more disruptive technologies, and C-level execs are demanding newer, bolder, and more resource-intensive supply chain investments. During this period, don’t forget about the bread-and-butter. IoT, drones, and robotics are all amazing technologies, but responsible, tech-forward supply chain planning — which includes demand forecasting, inventory control, and QA — are no-regret investments that are proven to deliver tangible value and build resiliency.
Luckily, supply chain management and planning technology exists in a very mature space. Between Oracle, Microsoft, JDE, Acumatica and Epicor, you have plenty of well-proven solutions to choose from. In this post, we’re focusing solely on Dynamics 365, but — as a vendor-agnostic company — we urge you to evaluate vertical solutions like Oracle and Epicor to see if they’re a better fit for your inventory needs.
The Value of Dynamics 365 for Supply Chain Planning for 3PLs and Distributors
Hint: The architecture and licensing structure of Microsoft Dynamics 365 can be a little confusing. We highly recommend reading our post where we break down the licensing and software infrastructure of D365 for supply chain managers.
As one of the leading supply chain planning and management solutions, Microsoft Dynamics 365 Supply Chain Management brings a ton of features to the table. At first, it can be a little difficult to digest some of these features, since Microsoft’s marketing arm surrounds D365’s value levers in a mist of trendy language and hyped promises.
For 3PLs and distributors, these are the following “core” features you can expect from Dynamics 365.
Demand-Side Planning
The basics of successful supply chain planning start and end with demand-side planning. The goal is simple. You want to leverage AI-driven forecasting to predict customer demands — which helps you maximize the delivery of your products while minimizing the impact of overstock and stock-outs. Demand-planning is the single most profitable component of supply chain management. McKinsey estimates that retailers lose $1.1 trillion in revenue on overstocks and stock-outs alone. So, taking control of your demand-side inventory immediately generates a real, measurable ROI.
Microsoft packs a few key features that help with demand-side planning:
- Master plans: From planned orders to safety stock and delays, Microsoft D365 features near real-time supply chain planning. This all happens from a Master Plan that’s generated based on AI-driven forecasts. You can go in and manually tweak settings to boost safety stock or create longer safety margins, but the list is automatically generated.
- Demand forecasting: Dynamic 365 also has an amazing demand forecasting center, which combines Azure intelligence with historical and near real-time data to generate high-value forecasts.
Note: Dynamics 365 also features Gantt charts for production scheduling and resource allocation, which is especially useful for manufacturers.
Inventory Control
3PLs and distributors are almost entirely hinged on inventory control. Inventory is, without a doubt, the unifying asset of any inventory-based business. So, naturally, inventory control is front-of-mind. It’s not enough to have a demand-side forecast. You need a way to make that forecast actionable by applying it to your actual inventory control procedures.
Microsoft Dynamics 365 wasn’t purpose-built for inventory control. But it does pack plenty of inventory-centric features, like:
- Cost management: Dynamics 365 has powerful, built-in cost-analysis ledgers to help you understand the context of inventory costs. The ledgers collate data from existing sources, forecasts, and existing data pools, and they can connect with Excel to drive accounting value into your inventory control.
- Simplified procurement: One of the best features in Dynamics is its procurement framework. You can manage suppliers, negotiate contracts, change terms, and find new suppliers (based on speed, price, and quality) directly from your Dynamics dashboard.
- Warehouse automation: While this is a little-too-complex to cover in a single blog post, Microsoft has warehouse automation features that allow you to create heat maps and workflows for inventory flow. These workflows will automatically trigger mobile instructions that are sent directly to each warehouse worker with their daily tasks. You can read a little more about that in detail in Microsoft’s technical docs.
- Transportation planning: Dynamics 365 also has a transportation logistics layer, which uses data to help you monitor real-time freight, transportation routes, and planning scenarios.
Asset Management
Many distributors operate expensive machinery. While this isn’t necessarily true across-the-board, Microsoft packs some neat asset and equipment management features that can help you cut maintenance costs. These include:
- Maintenance management: You can set up predictive, preventative, and corrective maintenance workflows from D365. In addition, you can create condition-based maintenance, which plays well with IoT.
- OEE maximization: Dynamics 365 is built to handle IoT needs. So, you can mix IoT sensors into your data streams to optimize the overall life of your equipment. This gets a little off-topic for the purposes of this post, but McKinsey estimates that IoT reduces maintenance costs by up to 25 percent while bumping availability by around 15 percent.
Quality Control & Compliance
Finally, Dynamics 365 has some built-in quality control features. While most of these are centered around discrete manufacturing and innovation analysis (two factors that rarely apply to distributors), they also have a neat product quality notification solution that can trigger when products fall under quality thresholds.
StockIQ + D365: Building A Future-Proof Inventory Architecture
While Dynamics 365 is a powerful, streamlined supply chain management solution, it’s not curated for distributors and 3LPs.
StockIQ helps bridge the gap for inventory based enterprises.
Our end-to-end supply chain management solution brings a variety of must-have features to your supply chain planning portfolio. Not only does StockIQ integrate with Dynamics 365 — allowing you to leverage the same data ecosystem — but we add new and value-driven features to your supply chain planning repertoire.
Demand Forecasting
StockIQ brings additional capabilities and forecasting intelligence to your D365 stack. Our world-class forecasting models can generate top-down, bottom-up, and middle-out hierarchies. Our engine can also account for special events like promotions and black swan events like natural disasters. StockIQ goes above-and-beyond traditional forecasting models by bringing granular-scale insights and unparalleled flexibility. Want to know what to do when a sudden demand spike hits your inventory? We’ve got your back. StockIQ’s intelligent AI engine constantly processes incoming demand data to predict, react, and remediate any demand issues.
Replenishment
StockIQ also provides replenishment features to supplement your D365 ecosystem. You can generate POs, TOs, and WOs in a matter of seconds. Here’s the best part: those reports are intelligent. Beyond the single-click generation, we leverage industry-leading machine learning and workflow automation to provide a chunky amount of intelligence behind every order. StockIQ provides replenishment features like:
- Supplier minimums automation:
- PO automation:
- Order targeting:
- Container loading:
- Inventory balancing:
- ATP/CTP:
- Transfer allocation:
Inventory Control
Accurate, waste-free inventory control sits at the center of our dynamic supply chain management and planning solution. With StockIQ, you can eliminate stock-outs, minimize overstock, and track complex, item-specific quality issues like expiration dates. We don’t just fix inventory issues; we contextualize them. Our engine will tell you why stock-outs are happening, how you generated excess inventory, and what you need to accomplish to meet service level agreements.
In addition, our engine can help you with ABC stratification, giving you the information you need to appropriately stock inventory across your facilities. We also put special trackers on new inventory and promo items to provide additional context and data regarding their overall flow. In other words, we transform inventory control across your D365 architecture.
S&OP
S&OP is a transformative, cost-centered strategy that aligns supply chain goals with revenue requirements. According to McKinsey, the “accuracy, granularity, and speed” of S&OP provides value for elements like “service, supply chain costs, and inventory.” So, S&OP goes well-beyond tactical achievement: it drives ROI and revenue across your supply chain.
StockIQ gives you end-to-end S&OP value. Not only can you drill down our forecasts to a granular, item-level view, but you can manage and change those forecasts at any level of your hierarchy. Once you’re finished, you can export that data straight back into D365 to provide fresh context to your Azure learning engine.
Supplier Management
StockIQ comes with a purpose-built supplier manager module that calculates lead times from your actual receipt history — not using averaging models like Dynamics. We give you the tools and intelligence you need to uncover every supplier friction and generate meaningful responses to late orders and understock.
A Note on D365 Cons
No solution is perfect. That goes doubly for complex, data-drenched supply chain management solutions. Let’s quickly look at some of the cons (which we garnered from a combination of personal experience, client discussions, and review sites) of D365.
- Complexity: To say that D365 is complex is an understatement. You may need to deploy developers, understand the architecture of Microsoft Azure, and figure out how to weave together data streams if you want to take full advantage of this solution.
- Total buy-in: It’s almost impossible to solely deploy D365. You have to buy-in to the entire Microsoft suite of products. This isn’t necessarily a con, but it is a consideration. D365 is catered towards SaaS-style deployment, so this is an off-premise solution that requires your stack to be integration-friendly. Not all vendors integrate with Dynamics, so you’ll need to specifically look for the right third-party vendors, and you’ll likely purchase licenses for Azure, Power BI, and other Microsoft products.
- Inventory management: Dynamics 365 lacks some core inventory management features that distributors and 3PLs need to build robust supply chains.
StockIQ Brings New Layers of Supply Chain Management to D365 Environments
Microsoft Dynamics 365 is a powerful tool. But we make it better. StockIQ’s industry-leading forecasting engine and inventory planning capabilities give your Dynamics instance a fresh coat of paint. Want to learn more about how StockIQ can help you master supply chain management and planning? Contact us. We’ll give you a tour of the world’s market’s most powerful and integration friendly supply chain management solution.
