Last week Ignify presented a paper at the Dynamics Academic Alliance proceeding in the Microsoft Convergence conference. This blog is a summary of the paper.
The traditional model of produce/ buy, stock, and sell has been turned on its head. Just because you are able to make enough of an item and stock it – it doesn’t mean you are going to be able to sell it. The supply chain has to be very nimble and responsive to the shifting demand patterns. Demand is not only different by items, assortments, and item categories but also can be very different by channel, geography, and customer type. For example one of our customers sells to big box retailers with EDI orders as the sales channel, sells direct to consumers through its ecommerce sites and then to academia through a network of sales professionals and inside customer service team members. The big box retailers hit their peak in September and October when they stock up for the holiday season while the ecommerce site hit its peak in November and December and the schools typically buy in June and July before the schools open. While there is overlap in what each customer buyer segment buys, there are differences too. So the customer has the challenge of aggregating the demand across all the different channels and customer types and combining into an overall business demand forecast and ensuring the supply chain stays in tune with the demand pattern as there are always changes due to a multitude of factors.
Figure. The Traditional Linear Supply Chain is becoming more Demand Driven. Microsoft Dynamics AX provides native functionality for a demand driven supply chain with MRP, Production planning, Purchase Planning and Vendor Portals.
Microsoft Dynamics AX offers rich functionality for helping Improve Customer Service, Lower Inventory Carrying Costs, and Increase Visibility through the supply chain.:
- Powerful MRP and Master Planning functionality: Dynamics AX has the ability to take in a sale or demand forecast (or multiple forecasts for different geographies, customer groups, item groups/ item categories) and automatically create recommended purchase orders with purchases dates and recommended production orders for manufacturers. Master Planning automates purchasing and production planning.
- Safety Stock Recommendation: A tool that automatically recommends safety stock for items based on past sales order volume and desired fill rate.
- Vendor Portal: For vendors to be able to login and see their purchase orders and if you desire also your inventory so you can move to a Vendor Managed Inventory (VMI) model.
- Supplier collaboration tools: A services oriented architecture with the Application Integration Framework (AIF) that makes integrating with suppliers and customers straight-forward with the use of web services.
- Operational dashboards and Native BI: While most systems provide management dashboards – Dynamics AX provides operational dashboards and role centers that improve insight at the guts of the organization. For example out of the box role centers exist for Warehouse Managers, Accounts Payable Clerk, Controller in addition to the Executive dashboards for a CEO, CFO and other CxO roles. This helps ensure that users at all levels are empowered with the correct information to make intelligent and informed decisions. Most importantly Dynamics AX can be a single integrated system that captures all important data and provides a single version of truth for users across the organization.
Figure. Microsoft Dynamics AX provides information at all levels in the organization with operational, tactical and executive dashboards thus allowing for informed decision making across the organization.
As an example,
- Automate the warehouse with RF using native Dynamics AX integration though AIF to the RF hardware. Dynamics AX provided the ability to do directed pick and directed put-away using the location control in Microsoft Dynamics AX
- Used Master planning to automate the purchasing process and reduce inventory carrying costs.
- Integrate natively to customers to receive orders via EDI and process ASNs thus increasing visibility to demand and lowering order processing costs
Ram Kanagala, Director – IT at Ellison sums this up well: "This project is a showcase example of a client-partner relationship of the highest quality, delivering the project on time and on budget, with improved business processes and seamless information flow across systems, resulting in operational cost efficiencies and improved sales forecasts." If you need more information on optimizing your supply chain, email us at firstname.lastname@example.org
Eric Shuss is the President of the ERP Division of Ignify. Ignify is a technology provider of
by Ignify, a