Sebastián Barbosa O. /January 23, 2023 /Dynamics 365/Supply Chain Management/ 5 min read

What are the key features of a great Supply Chain Management System? with examples

Keep this entry for future references

Why should you adopt a supply chain management system?

Having a robust supply chain management system brings streamlined and automated business processes to increase visibility into operations, facilitate collaboration between partners, and manage risks in the supply chain. These benefits lead to increased efficiency, greater visibility, enhanced customer service, improved agility, better collaboration, and scalability, ultimately resulting in increased profits for the business and cost savings.

What is Dynamics 365 Supply Chain Management?

Part of the Dynamics 365 business app ecosystem developed by Microsoft, Dynamics 365 Supply Chain Management is a cloud-based solution that helps organizations manage and optimize their supply chain operations. This module includes tools for managing warehouse operations, logistics, and transportation, offering a wide variety of capabilities designed to support the numerous stages of the supply chain process, from demand forecasting and inventory management to procurement and supplier collaboration.

It’s worth noting that both Microsoft Dynamics 365 Supply Chain Management and Dynamics 365 Finance have been recognized as Cloud ERP Leaders in the 2022 Gartner Magic Quadrant for their outstanding capabilities.

What are the benefits of having Dynamics 365 Supply Chain Management Software?

Among the several benefits of having Supply Chain Management software, here are some of the essential ones that make your business witness real-time results:

  1. Increased efficiency: Streamline business operations, reduce manual processes, and eliminate bottlenecks. This can lead to improved efficiency across the organization, translating into cost savings and increased productivity.
  2. Greater visibility: Gain real-time visibility into all aspects of the supply chain, from production to delivery. This can help organizations make more informed decisions, identify potential problems before they occur, and optimize their operations.
  3. Enhanced customer service: Easily manage customer relationships, including order processing, invoicing, and tracking. This can help enterprises improve customer service and build stronger customer relationships.
  4. Improved agility: By providing a single, integrated platform for managing all aspects of the supply chain, businesses respond more quickly to changing market conditions and customer needs. This can help companies maintain a competitive edge in an increasingly dynamic business environment.
  5. Better collaboration: With modern tools for collaboration and communication with suppliers, customers, and other stakeholders, organizations are able to improve relationships and drive business growth more effectively.
  6. Scalability: The system is highly scalable and can be tailored to meet different businesses’ specific needs, regardless of size or industry.

Key features of a robust Supply Chain Management system

Master planning 

Master planning helps businesses plan and optimize their production, inventory, and distribution activities. It allows companies to create a detailed plan for meeting the demand for their products or services, including a wide range of factors such as production capacity, lead times, and available inventory.

Master planning in Dynamics 365 Supply Chain Management (SCM) is a crucial tool for helping organizations to plan and execute their supply chain activities in a way that minimizes costs, maximizes efficiency, and meets customer demand while enabling businesses to:

  • Predict future demand for their products
  • Optimize their production processes
  • Ensure that they have the necessary resources
  • Manage their inventory more effectively
  • Identify optimal inventory levels
  • Track inventory movements
  • Plan for replenishment
  • Reduce excess inventory
  • Improve their overall supply chain efficiency.

Cost management 

Cost management is a set of tools that includes features for managing expenses such as labor, materials, and transportation, as well as tools for analyzing and optimizing these costs to improve profitability.

Cost management includes essential capabilities such as:

  • Cost tracking: Track costs in real-time, providing visibility into expenses like materials, labor, and transportation.
  • Budgeting and forecasting: Create budgets and forecasts, helping businesses to plan and manage expenses more effectively.
  • Cost analysis: Analyze costs in detail, identifying areas where costs can be reduced and opportunities for cost optimization.

This feature also helps organizations to:

  • Track and optimize their costs across the supply chain
  • Control costs
  • Improve profitability
  • Enhance visibility
  • Improve analysis
  • Identify areas for cost optimization
  • Make informed decisions
  • Drive business performance.

Inventory management 

Inventory management means tracking and managing the stock of goods that a business holds in its warehouses, stores, and other locations. This includes keeping track of the quantity of each item, as well as the location, condition, and value of the inventory.

Inventory management includes critical features that enhance business performance, such as tracking and managing inventory levels, setting reorder points and minimum stock levels, managing inventory transactions, and generating reports. That way, companies are able to:

  • Optimize their inventory levels
  • Ensure they have the products they need
  • Meet customer demand
  • Maintain efficient operations.

Procurement and sourcing 

Procurement and sourcing mean the processes of acquiring goods and services a business needs to manage and produce its products. This feature helps companies automate and streamline these processes while also reducing costs and improving supplier relationships.

Some key features of procurement and sourcing are supplier management, request for quote (RFQ) and request for proposal (RFP) management, purchase order management, and contract management. The goal of this area is to help companies:

  • Acquire the goods and services they need
  • Meet customer demand
  • Effectively operate their business
  • Build strong and mutually beneficial relationships with suppliers.

Production control 

Production control refers to the process of managing and coordinating the production of goods and services to meet customer demand and achieve operational efficiency. It includes planning and scheduling production, as well as monitoring and controlling the progress of production in real-time.

Some of production control’s key areas are production planning, capacity planning, production execution, and quality control. That way, businesses can:

  • Plan, execute, and monitor production
  • Meet customer demand
  • Achieve operational efficiency.

Warehouse management 

Warehouse management is the process of managing and optimizing the storage and movement of goods within a distribution center or warehouse. This includes tracking and managing inventory levels, as well as planning and executing inbound and outbound shipments.

With warehouse management, companies leverage inventory management, receiving and putaway, order processing, and shipping. Therefore, organizations will:

  • Optimize the storage and movement of goods within their warehouse or distribution center
  • Improve efficiency
  • Elevate customer satisfaction.

Transportation Management 

Transportation management indicates the process of planning and coordinating the movement of goods between locations, including warehouses, stores, and suppliers. This includes optimizing routing and scheduling, as well as tracking and managing shipments in transit.

The transportation management feature within Microsoft Dynamics 365 Supply Chain Management provides route optimization, shipping scheduling, carrier management, and freight billing. Companies that leverage this SCM feature will be able to:

  • Optimize the movement of goods between locations
  • Reduce costs
  • Improve the efficiency of their supply chain operations.

IoT Intelligence 

IoT (Internet of Things) intelligence uses IoT technologies to analyze and gather data from connected systems and devices within a supply chain. It can be used to enhance the efficiency and effectiveness of supply chain operations by providing real-time visibility into the movement and status of goods and resources.

Dynamics 365 SCM offers IoT intelligence, allowing businesses to leverage the data generated by their Internet of Things (IoT) devices to make informed decisions and improve their operations. The IoT can track the location and status of goods in transit, monitor the production equipment’s performance, and improve inventory management. Thus, it helps businesses to:

  • Improve the supply chain operations’ efficiency and effectiveness
  • Gain real-time visibility into the movement and status of goods and resources.

Dynamics 365 Supply Chain Management FAQs

How does Dynamics 365 Supply Chain Management integrate with other systems?

Dynamics 365 Supply Chain Management (SCM) can be integrated with other Microsoft and third-party systems to offer a more thorough understanding of the business and allow better decision-making. It can also be integrated with IoT devices to leverage the data generated by those devices to improve operations.

What industries does Dynamics 365 Supply Chain Management work for?

Dynamics 365 SCM touches upon any industry in almost every business area to enhance overall operations, such as discrete manufacturing, process manufacturing, lean manufacturing, and more. To name the industries more precisely, these are the top 5 ones in supply chain management:

  1. Manufacturing
  2. Wireless & telecommunication
  3. Customer Service
  4. eComerce
  5. Customer Service

Is Dynamics 365 SCM suitable for businesses of all sizes?

Yes, Dynamics 365 SCM is suitable for businesses of all sizes, and it can be customized to meet a company’s specific needs, regardless of its size or industry.

Is Dynamics 365 Supply Chain Management available in multiple languages?

Yes, Dynamics 365 Supply Chain Management is available in different languages, including English, Spanish, German, and French. Other languages may also be available.

Thank you.

I hope this blog has provided broader learning about the essential features and benefits of a Supply Chain Management System to help your organization move to an enhanced operational stage.

Sebastián Barbosa O.

Read more blog entries by Sebastián Barbosa O.

Read more: Dynamics 365 | Supply Chain Management

Now that you've learned more about the many benefits of a Supply Chain Management System, are you ready to make your business results evolve?