Supply Chain Best Practices for Microsoft Dynamics 365 

Microsoft Dynamics 365’s Supply Chain Management system is packed with tools to support all parts of the supply chain, from procurement and planning to asset management and manufacturing. Leveraging this program’s expansive capabilities requires understanding how to use it. By following supply chain best practices in Microsoft Dynamics 365, you can maximize its value and make more progress toward goals such as improving agility, increasing efficiency, and reducing costs. 

What Are Some Best Practices in Dynamics 365 for Supply Chain Management? 

Support your business objectives by using the right tools with these Microsoft Dynamics supply chain best practices. 

1. Take Advantage of End-to-End Visibility 

The end-to-end visibility of Dynamics 365 is one of its biggest assets, improving processes and decision-making for businesses that can leverage it. Our first supply chain best practice for Microsoft Dynamics 365 is integrating diverse data sources with the platform and making the most of updated information. 

You can connect Microsoft Dynamics Supply Chain Management with data from sources such as: 

• Suppliers 
• Internet of Things (IoT) devices 
• Inventory management systems 
• Warehouse management systems (WMS) 
• Enterprise resource planning (ERP) programs 
• Customer relationship management (CRM) systems 

Disparate sources of siloed data become cumbersome and time-consuming to work with, and they may introduce errors due to outdated information. Bringing all this information under one roof gives you access to the full picture of supply chain management, allowing you and your team to make more informed decisions, improve collaboration, and resolve problems quickly. It’s particularly useful if your partner network is complex or international. 

While you can integrate some data sources directly through Dynamics 365, others require the help of electronic data interchange (EDI) or application programming interfaces (APIs). 

If you have high transaction volumes, consider implementing the Inventory Visibility module, which supports real-time inventory accuracy and automation across channels. Leveraging IoT devices is also a great way to boost visibility. You can connect sensors to your equipment, products, or their environments to detect statuses, such as machine outages or environmental conditions affecting product quality. 

2. Use Insights to Identify and Improve Replenishment Tactics 

Replenishment decisions can be challenging as the landscape constantly evolves, and you must compare risks and benefits to facilitate a cost-effective yet efficient flow of goods. Microsoft Dynamics 365 Supply Chain Management can help with extensive data analysis through tools for inventory analysis reports and demand forecasting powered by machine learning and artificial intelligence. 

With demand forecasting, you can create predictions based on historical data, visualize those trends, and adjust expected production demands. Inventory analysis reports allow you to explore many dimensions of your inventory, such as location, value, and on-hand items. Demand planning is another helpful feature, letting you create forecast profiles and models with popular demand forecasting algorithms. 

Use the data from these tools to guide your replenishment decisions. They can help you choose the best tactics and identify ideal reorder points, order frequencies, stock quantities, and other values that direct the process. 

Accurate replenishment and inventory management predictions depend on high-quality, updated information, so effective integrations and automations are foundational components of building a replenishment plan and avoiding stockouts or overstocking. 

3. Prioritize Vendor Relationships 

Good relationships with vendors and suppliers require transparency and streamlined communications. Dynamics 365 offers these advantages through its vendor collaboration feature, which has a portal for vendors to communicate with you and view relevant data. You can also use it for tasks such as checking on the status of invoices or approving vendor activities. 

Use these capabilities to maximize the value of your relationship for both parties. For instance, many vendors appreciate quick responses and approvals, and you can encourage data-sharing to improve planning, which helps both of you meet customer demands efficiently. 

Dynamics 365’s vendor collaboration tools also include performance measurements. Explore these insights periodically to evaluate the partnership and make changes if needed. 

4. Optimize Inventory Management 

Dynamics has several resources for inventory management tasks to support lean, efficient operations and reduce waste. 

Here are some Microsoft Dynamics supply chain best practices for inventory management: 

• Properly classify items: This program supports the ABC inventory classification method, allowing you to adjust processes based on an item’s relative importance, determined by revenue, margin, value, or carrying costs. Use this system to prioritize your most impactful items by marking their classifications within Dynamics 365, which also offers automatic setup. Follow up with an analysis to verify the accuracy of your system. 
• Connect mobile warehouse devices: Dynamics 365 supports various technologies for mobile warehouse management, such as barcode scanners, mobile printers, and mobile apps. These devices offer increased accuracy and can save time by eliminating travel to and from workstations. Consider implementing them in your workflow. 
• Streamline cycle counting: Under the warehouse management section, you can set up cycle counting plans for auditing on-hand inventory. A manual process requires you to create cycle counting work as needed and select your parameters. By automating it, Dynamics 365 can generate cycle count work periodically or when your inventory item reaches a specified threshold. Automating cycle counts can help you stay on top of auditing and minimize administrative tasks. 
• Practice lean strategies: Reduce waste and costs using lean techniques such as bottleneck analysis and value stream mapping. You could even weigh the benefits and risks of just-in-time (JIT) tactics to see if it’s right for your business. 
• Consider vendor-managed inventory (VMI): Switching to a VMI solution can eliminate the problems of having too much or too little inventory by using data from a distribution partner to inform replenishment. 

5. Automate Wherever Possible 

Rounding out our list of Microsoft Dynamics 365 Supply Chain Management best practices is automation. As a centralized system with diverse data sources, Dynamics 365 is the ideal starting point for many automated processes. With the help of connections such as EDI and APIs, you can create workflows with minimal human intervention, giving your team time to focus on more valuable tasks. Automation also eliminates human error, helping you save time and resources from fixing them. 

Start by automating your key processes, such as accounts payable and receivable, shipping, and communications with third-party logistics (3PL) providers. Your integration system should offer seamless connections without paying for high-cost add-ons or modifying Dynamics 365’s core systems. 

Optimize Your Entire Supply Chain 

These Microsoft Dynamics best practices allow you to use the platform’s robust tools to save time and money and avoid errors. Leveraging Dynamics 365 and various data sources can open up new ways of doing business, such as working with automation and increasing visibility. 

TrueCommerce can create these connections between Dynamics 365 and other business programs, EDI systems, eCommerce marketplaces, and 3PL providers. We also offer VMI, APIs, and fully managed services to streamline connections to your trading partners. 

Get your data under one roof, and book a demo today with TrueCommerce!