This is the third post of the article series that are about Dynamics 365 ERP Technologies contributing to designing a Resilient, Intelligent, and Adaptable Supply Chain against the coronavirus (Covid-19) pandemic.
This article is a bit long, full of information, and the most important part of this article series.
Let's start!
CONTENT Dynamics 365 ERP Technologies contributing to designing a Resilient, Intelligent, and Adaptable Supply Chain against the coronavirus (Covid-19) pandemic: Reducing Time to Market and Solving Product Quality Issues
Gaining Planning Agility to Meet Customer Demand
Optimizing Inventory and Related Logistics Operations Inventory Visibility Innovation with Smart Manufacturing Operations IoT Maximizing the Working Time and Life of Fixed Assets in Production Overcoming Outages to Keep Production UpTechnological Scaling of Supply Chain Operations E-Commerce Field Service Improving Supply Chain Flexibility, Traceability, and Predictability with Blockchain |
As organizations have gained operational efficiency and become leaner over the past 10 years, they have become less resilient to disruptions. Businesses are lacking agility due to the slow digitization of their supply chains, which significantly disrupts their ability to respond to changing customer demand and supply challenges. To create flexibility in supply chains, all processes must be visible end-to-end, from planning to delivery. There is a need to evaluate the unifying data coming into ERP from all different systems in real-time. Businesses that want to have a Durable, Intelligent, and Adaptive supply chain should adopt and implement the processes and technologies described below:
- Businesses must be able to predict demand with artificial intelligence and collaborate in real-time with commercial teams to shape customer demand.
- Businesses should have the agility to perform real-time procurement and production planning according to customer demand in order to procure raw materials from suppliers in the fastest and most cost-effective way, and in some cases, they should be able to find new suppliers quickly if the existing supplier is offline to ensure business continuity.
- Businesses should automate production in order to streamline production at the manufacturing site and ensure that the right resources (equipment and labor) are allocated to achieve the desired efficiency by meeting the demand on time.
- Businesses must have the right maintenance schedules to avoid costly downtime.
- Businesses must have real-time cross-channel inventory visibility into their distribution centers to ensure the correct quantity is stocked globally/globally. To meet customer demand on time, they must optimize picking and shipping times, and keep distribution centers running efficiently.
- In a world where customers can order through multiple channels(online, mobile or in-store), businesses must use an intelligent system to automate the fill-in-stock strategy to forecast and meet customer demand in the most cost-effective way.
Dynamics 365 business applications help meet critical business needs such as improving supply chain visibility, gaining planning agility, and empowering the workforce to ensure business continuity.
Reducing Time to Market and Solving Product Quality Issues
Systematically responding to rapidly changing customer needs, in other words, ensuring that product managers present their products to the market at the right time and in the right way is one of the challenges faced by competitive businesses during the Pandemic process. Dynamics 365 Cloud ERP has 3 components to meet these challenges:
Central Product Management: Product information and stock cards are the backbone of supply chain and commerce applications across all industries.
In an agile world where products must be adapted to customer needs quickly due to the impact of Covid-19, sharing a main product in all companies instead of defining different products in different companies facilitates product management. With this approach, product definitions are created independently of the legal entity. Therefore, core values such as product number, type, and name are shared. This is called central product management. The common use of shared product definitions, documents, attributes, and identifiers is also crucial for centralized data management and consistency. This basic information is defined independently of the organization in which the product is used. When the product is authorized for use in a legal entity, additional organizational details such as costing, coverage plans, taxation information and preferred vendors to supply the product, and much more are set up in those legal entities.
Another advantage of this approach is the ease of providing only one resource for environmental integrations. Product data can be easily enriched and managed in one central location and easily distributed to e-commerce websites, third-party markets, content channels, vendors, partners, and more, enabling easy ERP integration.
Configured Products: After using centrally managed products in Dynamics 365, the next thing is to reduce product innovation costs by using configurable products that are configured to meet evolving customer demands.
In particular, products in manufacturing, maintenance and repair businesses need to be customized for different customers. However, classical systems cannot keep up with the increasing demand for thousands of variables, options, real-time production visualization, and businesses are experiencing problems in their bidding processes. Gartner states that more than half of companies do not have a single repository to review, analyze, approve and monitor changes in products. Dynamics 365 ERP uses configurable product, in other words, product configuration technology for any manufacturing company, especially for companies engaged in custom manufacturing through a feature called Constraint-Based Configuration.
Product configuration is a constraint-based product configuration tool that uses Microsoft Solver Foundation® (MSF) product technology designed for modeling and constraint resolution. In simple terms, constraint solving by modeling helps companies solve production planning problems by dealing with (x) number of constraints.
By adopting product configuration management, manufacturers have the opportunity to meet customer demand for unique products while reducing or eliminating obsolete inventory items. The challenge by doing this is that the need for short lead times must be balanced against low inventory levels.
The key to success here is to carefully analyze the product portfolio and look for patterns in both product features and processes. The aim is to identify generic components that can be produced on the same equipment and used in all variants and to maximize any restrictions. To better assist businesses, Dynamics 365 ERP includes a user interface (UI) that provides a visual overview of the product configuration model structure and a declarative constraint syntax that does not need to be compiled separately.
The product configuration feature allows users to quickly meet customer requirements through configuration templates. This approach can save time when configuring items on sales orders, sales quotes, purchase orders, and production orders. It also reduces product innovation costs by reusing products that have been configured to meet evolving customer demands. Customers' orders can be easily customized using this feature. Configurable products are a platform for engineers to effectively collaborate with planners throughout the production process.
Engineering Change Management: Businesses need robust product data management, version control and engineering change management in their digital transformation processes to be successful in a world where manufacturers are constantly shrinking product lifecycles, with stricter quality and reliability requirements, as well as a greater focus on product safety.
The new Engineering Change Management for Dynamics 365 ERP is a comprehensive and well-integrated solution, allowing manufacturers to bring structure and discipline to the product data management process and to enable products to be identified, released, and revised in a controlled manner. Through product revisions and engineering change management, it is possible to document and evaluate the impact of implementing engineering changes throughout the product lifecycle.
By quickly responding to changing customer or supplier specifications, regulations, and safety standards during COVID-19, companies can ensure compliance and ensure on-time delivery. They can overcome downtime due to quality issues and obsolete parts by quickly resolving them to keep production lines running uninterrupted. As a result, achieving on-time delivery by responding quickly to changing customer or supplier specifications, regulations, and security standards is one of Dynamics 365 ERP's strengths.
The next section is for planning engineers.
Gaining Planning Agility to Meet Customer Demand
Planning managers need to forecast demand and plan supply and production in near real-time to adapt to changing trends. Planning managers need to make sure the right resources and inventory are in the right place, using the right planning tools and forecasting technology.
With COVID 19, meeting customer demands is harder than ever today. Because this requires real-time understanding of materials and capacities needed to complete production targets. In addition, it is necessary to review cross-channel inventory levels, material shortages, inbound supply and supplier risks in real-time to plan and adjust workforce capacity and logistics to ensure on-time delivery to the customer.
There are 3 planning tools to ensure this agility.
Demand Forecasting with Artificial Intelligence: The first tool is Demand forecasting; All of the planning activities arise from the need to create an accurate sales forecast, in other words, demand.
Dynamics 365 ERP helps improve demand planning with AI-enhanced demand forecasting. By using artificial intelligence and predictive predictions, planning agility is brought to the system for production, inventory and warehouse management, and it is aimed to keep the stocks of the entire system more realistic.
Demand forecasting powered by artificial intelligence (AI) enables businesses to forecast customer demands with intelligent, data-driven forecasts. There is an automatic control here, Demand forecast creates measurements of forecast accuracy and adjusts and corrects forecast according to actual data as needed. This learning is done with Azure Machine Learning. Azure Machine Learning is basically a cloud-based predictive analytics solution and is used to predict future demand based on historical demand.
Accurately predicted demand contributes to the timely delivery of products and ensures that the right resources are in the right place at the right time. With Dynamics 365 Cloud ERP, supply and production can be planned in real-time through data analytics and logistics. By using predictive analytics, businesses can maximize operational efficiency and product quality while keeping costs low.
In artificial intelligence supported demand forecasting, a framework, in other words, confidence intervals can be created and outliers can be removed in accordance with company policy.
In-Memory Scheduling Optimization: The second tool is Planning optimization for Production and distribution. Planning Optimization helps companies manage master planning practices that enable scheduling of raw material orders, production orders, and capacity planning. With in-memory services; scheduling allows companies to turn a 5-hour task into a 5-minute task so production plans can be run multiple times a day to increase customer responsiveness.
Planning Optimization can be used in scenarios involving long-term master plans. It is specially designed for very fast calculations involving very large volumes of data. This approach eliminates the master planning load on the system and works with a data flow that minimizes the server load.
Planning Optimization can help achieve the following goals:
Improved planning performance with a shorter working time.Reducing the impact on other processes during the master planning run.Planning can be run more frequently.Future growth does not overload the planning system.
Planning optimization ensures that the master planning calculation takes place outside of Dynamics 365 ERP and the associated SQL database. The benefits associated with the scheduling optimization functionality are enhanced performance and minimize the impact on the SQL database during master scheduling runs. In this way, the execution of the scheduling can be done even during normal business hours. This allows planners to react instantly to demand or parameter changes.
MRP, Capacity Planning, Inventory Policies: Finally, there are tools available to balance demand and supply chain such as MRP, Capacity Planning, Inventory policies and others to optimize production planning and resource allocation.
Referred to as MRP, Material Requirements Planning or Master Planning, this Dynamics 365 capability allows companies to identify and balance future need for raw materials and capacity to meet company objectives. To calculate Material requirements and create planned orders, MRP evaluates available inventory quantities and resource capacities and determines what needs to be produced, purchased, handed over to complete production. It helps streamline production processes and the supply chain by exchanging information with other functions within the system, such as requirements planning, production, logistics, trade, and CRM in Microsoft Dynamics 365.
The components of MRP are as follows:
Demand forecasts
Demand forecasts created by the system or entered via Excel are one of the most important inputs of requirements planning. A summary of past transactions in system-generated demand forecasts is transferred to the Azure Machine Learning system in the cloud. This feature is only available to companies. The created forecast can be visualized, modified, performance indicators can be created about the accuracy of the forecast.
Stock policies
Dynamics 365 ERP includes a wide variety of parameters to manage inventory costs in accordance with business policies. Some relevant parameters are as below:
Default order type: Indicates whether the material will be purchased or produced to be produced when needed.Stock model: Indicates whether a later delivery can be made by selling the material for nothing.Min/Max stock levels: They are the minimum and maximum stock levels determined. It is not calculated by the system.Safety stock level: It is the quantity level that the system determines by its own calculation, considering the consumptions and lead times. It also can be entered manually.
Order policies
Dynamics 365 ERP includes a wide variety of parameters to manage order costs in accordance with business policies. Some relevant parameters are shown in the table below:
Purchase standard order quantity: Automatically suggested quantity when an order is created for the item.Purchase minimum order quantity: It is the order level that is used to give a warning by the system if entered purchase order quantity is less than the minimum order quantity.Purchase max order quantity: It is the order level that is used to give a warning by the system if entered purchase order quantity is more than the maximum order quantity.Purchase lead time: It is the parameter that indicates days from order placement till material arrival at the warehouse.Sales standard order quantity: Automatically suggested quantity when an order is created for the item.Sales minimum order quantity: It is the order level that is used to give a warning by the system if entered sales order quantity is less than the minimum order quantity.Sales max order quantity: It is the order level that is used to give a warning by the system if entered sales order quantity is more than the maximum order quantity.Sales lead time: It is the parameter that indicates days from order placement till product delivery.
BOMs and routes
The Designer form is used to design and work with bill of materials (BOM) tree structures in Dynamics 365 ERP. The designer graphically displays the BOM structure. Users can choose different configurations and parametrically determine what information is displayed in the rows of the tree.
Capacity reservations
Businesses using Dynamics 365 ERP often focus on material planning, but managing workshop capacity is just as important. One of the main goals is to detect variables or overloads caused by COVID-19 early. Thus, decisions can be made to work with subcontractors on time or to change subcontractors, to make agreements with other subcontractors.
Optimizing Inventory and Related Logistics Operations
Dynamics 365 ERP helps businesses increase end-to-end visibility into their supply chains.
Inventory Visibility: Inventory visibility is vital, and Dynamics 365 is capable of displaying a single source of inventory flow from inbound to outbound.
Dynamics 365 supply chain uses historical sales and purchasing data to help optimize inventory and reduce transportation costs. While the focus now is flexibility, the cost still needs to be controlled. Simply ordering and keeping more inventory is not the solution. The answer is digital transformation. In other words, the answer is tighter integration and collaboration with internal and external trading partners to access data faster, and a new level of transparency and visibility across the end-to-end supply chain.
The “stock on hand” screen is a good example of visibility, it can show your inventory location across legal entities and multiple locations in near real-time.
The arrival overview screen is another example of good visibility, it gives the warehouse reception operator an overview of arrivals to plan their workloads and first warehouse receipts.
Procurement Process Visibility: In addition to inventory visibility, Dynamics 365 has features for procurement process visibility. Dynamics 365 Supply Chain Management integrates all steps of the purchasing process. Built-in tools for spend analysis, supplier performance management, landed cost, and real-time vendor collaboration maximizes the effectiveness of purchasing and sourcing processes.
Vendor Collaboration Portal enhances communication to increase order accuracy and maximize vendor performance using a single application.
Spend Analysis lets you analyze spend data to identify trends and potential areas for cost-saving initiatives.
Deadline cost is a brand new module and is used to calculate the exact price of an imported product and may include the following costs: transportation to the port of departure, loading, sea travel, customs clearance, and transportation from the port of destination to the warehouse. Finally, other cost components that will affect the import price may also be included in the calculation.
Warehouse Operations Visibility: Basic warehouse processes are common to most customers, but specific requirements can vary widely by company and industry, and even between warehouses within a single company. This means there is a need for a flexible and adaptable warehouse management solution that meets their unique functional requirements. Dynamics 365's Warehouse management solution is adaptable enough and can be customized for more complex business requirements.
Materials handling equipment interface (MHAX) to manage external warehouses (for organizations), Mobile devices, barcodes, and RFIDs are some of the key features that increase the visibility of warehouse operations.
Innovation with Smart Manufacturing Operations
Next-generation manufacturing is a concept aimed at increasing flexibility in production and increasing productivity.
By using next-generation technologies such as the Internet of Things (IoT), mixed reality, external integrations and scaling operations in the cloud, companies can overcome the challenges of producing products in a short time-to-market. This is also called smart manufacturing. The goal here is to create a connected system throughout the factory.
IoT: IoT (Internet of Things) allows proactive (not reactive) management of production processes to improve quality and conserve resources. This, of course, also allows for the estimation of outages.
It uses out-of-the-box IoT capabilities within Microsoft Azure IoT Hub to connect signals from mission-critical assets with transactional data. Manufacturers can improve uptime, throughput and quality by proactively managing workshop and equipment operations with a real-time view of all production and stock. This will significantly reduce costly downtime of business-critical equipment by performing predictive maintenance before catastrophic failures occur. System maintenance is also easy as no coding is often required to implement these out-of-the-box IoT scenarios in production.
Scaling and HoloLens: Cloud scaling technology is a new technology, enabling companies to easily scale production at peak times and keep critical processes running 24/7 even when disconnected from the cloud in remote locations. Cloud system scaling technology is required for the following reasons:
When business processes compete for the same system resources, unreliable connections or network latency occur,When there is a need for periodic or regular maintenance between time zones for different regions,When it is necessary to meet the system load caused by different planning requirements.
In Dynamics 365 Supply Chain Management, scaling operations are provided through scaling units located in the nearest Microsoft Azure datacenter and running in the cloud.
Another component of smart manufacturing is HoloLens, an interactive holographic experience in Dynamics 365.
By using the interactive holographic experience in Dynamics 365, efficiency and security are increased and errors are reduced. The goal here is to increase the skills, talents and types of talent in the workforce to keep up with changes in the company's business strategy.
HoloLens has several applications. HoloLens can be used in Design Studios or Support services. It is also used at the manufacturing center level to guide workers by creating step-by-step holographic instructions. Dynamics 365 Guides are used to help spread mixed reality, especially in manufacturing businesses. Companies can provide a faster return on investment by training their workforce faster with fewer instructors and an interactive learning experience. Workforce productivity can be accessed at a glance on the HoloLens device that frees workers' hands to get the job done, with step-by-step instructions that guide workers to the tools and parts they need and how to use them in real work situations.
HoloLens guides not only eliminate costly errors in production but also improve workforce safety. By making it independent of asset maintenance capabilities, companies can significantly reduce asset downtime and avoid costly waiting time for a specific specialist to maintain an asset. The guides are extremely easy to write and do not require any coding. A manual can be written simply by typing step-by-step instructions on a PC and then selecting the holographic parts and internal icons and placing them on the machine where the job is taking place.
EDI: EDI (Electronic Data Interchange) is another part of the digital supply chain that is less dependent on paper or e-mail. Using EDI also eliminates time consumption and increases supply chain efficiency.
EDI integration is a strategic investment that can automate the processing of accounts receivable, accounts payable and remote warehouse transactions, eliminating time-consuming, error-prone manual effort and increasing supply chain efficiency. The benefits are as follows: Lower operating costs, Improved business cycle speeds, Reducing human error and increasing record accuracy, Increasing business efficiency, Increasing transaction security, Having a paperless and environmentally friendly system.
Finally, Dynamics 365 supports batch, continuous, and lean manufacturing strategies with make-to-stock, make-to-order, configure-to-order, and engineer-to-order production variants.
Maximizing the Working Time and Life of Fixed Assets in Production
The concept of fixed asset management means maximizing the uptime and life of the fixed asset, reducing costs and production downtime. This provides efficiency in maintenance planning, execution, and analysis. This is also possible with the Fixed Asset Management module.
Fixed asset management uses IoTs to ensure predictive (proactive) maintenance and the maintenance required to manage assets (machines, production equipment, production tools), reduce equipment downtime, and improve overall equipment effectiveness (OEE).
The goal is to connect sensors to all production assets/resources on the shop floor. Thus, it is possible to manage IoT notifications and to inform machine operators, technicians, or engineers with real-time data. In other words, you stay one step ahead of potential problems with actionable insights at any time, such as inspection, repair, or service.
Machines can be tracked by triggering a maintenance request by a maintenance team member by looking at an IoT notification or historical data. If the machine is not running, it means that the production schedule has changed. But with scheduling optimization in Azure, rescheduling takes very little time, not days. This allows inspectors to reassess and optimize production.
Overcoming Outages to Keep Production Up
The new Engineering Change Management module brings structure and discipline to the product data management process: It enables products to be defined, released, and revised in a systematic way using workflows. Helps plan and manage product releases, manage product lifecycles and engineering changes. It helps companies manage their increased requirements for quality, reliability, and increased focus on product safety.
With engineering change management it is possible to document and evaluate the impact of implementing engineering changes throughout the product lifecycle.
Engineering change management can ensure compliance by quickly responding to changing customer or supplier specifications, regulations, and safety standards. As a result, production line disruptions due to quality issues are overcome.
This will help create a seamless end-to-end business process flow between the engineering team and operations teams.
As a result, the Dynamics 365 supply chain provides efficient production lines by effectively managing product revisions and predicting and solving quality issues with engineering change management.
Technological Scaling of Supply Chain Operations
Companies working with production and distribution must be able to run key business processes 24/7 and have flexibility in their supply chains. Doing this is quite possible thanks to scaling technology.
New technology is now available to scale and sustain operations 24 hours a day during peak uninterrupted transaction times. This functionality helps improve performance, prevent service interruptions and maximize uptime.
Difficulties with connectivity arise when business processes compete for the same system resources. At this stage, units of scale help to run flexible operations. Scale units run in the nearest Microsoft Azure datacenter. The logic is to connect all units of scale to your enterprise-wide Supply Chain center to have all the information available.
Cloud scale units provide two key goals:
• When a company is offline or network latency is high: Mission-critical processes must continue to run.
• When productivity is high and heavy processes run in parallel: Production and warehouse processes should still be supported, ensuring high user productivity.
As a result, Scaling helps create flexible production management due to unreliable connections.
E-Commerce
The customer channels that businesses use to offer their products and services are gradually expanding. For example, customers expect services to be delivered remotely via digital channels, rather than visiting a store in person, which is further required by evolving circumstances such as the COVID-19 pandemic. This change in channels means different things for your order management system or other related business processes. Thus, companies have started to make larger investments in e-commerce platforms, with the acceleration of digital commerce channels in the midst of COVID-19.
Dynamics 365 Commerce is a very good alternative to existing business-to-consumer (B2C) e-commerce as a holistic solution that is smart and user-friendly, with the addition of business-to-business e-commerce capabilities. In other words, purchases made using digital self-service between businesses are more advantageous for both parties in terms of reconciliation and partners.
In addition to the agility and resilience in the supply chains of businesses worldwide in response to the COVID-19 pandemic over the past few months, their adaptation to new customer needs through digital channels has allowed them to survive and consolidate their market position.
However, as vaccines become available, many businesses still do not know their customers' future shopping needs, ie what a return to in-store purchases will mean for their customer experience. According to Forbes' research, with the impact of the epidemic that is expected to last for years, retailers and shoppers will get used to the changes long after COVID-19 is under control.
Besides the actual shopping experience, the physical retail stores of the future will change due to the epidemic. Here are 10 changes that are likely to be seen in existing and new retail areas in the post-COVID-19 world.
Established distance: Most stores practice social distancing with signs to keep customers one and a half feet from each other while waiting in line. Future retail spaces could make the distance more permanent with different colored rugs or waiting areas to mark where each customer should stand.
Product placement for speed: Most retail stores are designed to encourage customers to dig deeper in the store and spend more time browsing. But in the future, stores will change their product placements to facilitate faster and smoother trips. Customers will want to get in and out quickly, and brands will want to discourage customers from touching items they haven't purchased.
Calming colors: After months of being at home, consumers are understandably worried about returning to physical stores. In the future, more brands will adopt soft lighting and shades of blue and green in their signage and decor to create a more calming atmosphere.
Autonomous stores: The cashier-less shopping model has gained momentum due to the pandemic and more stores are likely to implement this technology in the future. Autonomous stores keep customers and employees safer. The customer only touches the items he is considering buying, card readers are contactless. No need to interact with cashiers.
Built-in drive-thru services: There has been an explosion of in-home delivery models in recent months. In the future, the integration between technology and physical stores will be strengthened so that customers who come to the market can receive their shopping without leaving their cars.
Smaller stores: As e-commerce continues to grow, physical stores do not need as much space. Smaller stores can also help brands cut costs during economic uncertainty.
Filtering system improvements: Some of the biggest changes in physical spaces may not raise customers' awareness, but improved filtration systems can increase air humidity and potentially reduce the spread of microbes.
Open spaces: In many parts of the world, large groups of people are prevented from meeting. Outdoor retail spaces, such as walking centers, may see an increase in the future.
Showrooms: Retailers will bridge the gap between physical and e-commerce shopping, with showrooms allowing customers to view products in one space before deciding exactly what they need and ordering online.
Physical barriers: Stores are focused on protecting not only their customers but also their employees. Many stores implement plastic clear dividers between cashiers and customers. In the future, there will be creative ways to create physical barriers between people without harming the personal communication and service that occurs in stores.
Field Service
Dynamics 365 ERP is integrated with Dynamics 365 Field Services. By automating service operations in the field, customers can significantly reduce downtime of geographically dispersed mission-critical assets, ensuring that the right resources (labor, machines, parts, and tools) are available at the right place, at the right time, to proactively maintain them.
Companies can improve the overall equipment efficiency (OEE) of their geographically dispersed mission-critical assets by performing predictive maintenance based on real-time performance data from the IoT and data from Dynamics 365 Field Services. Traditionally, disparate systems hamper the ability to accurately forecast demand for critical and expensive parts that are often used in both service and new production. Due to the lack of foresight to service demand, companies are constantly removing parts from production to meet service demand and vice versa to provide good customer service. This often creates a shortage for new production and significantly affects on-time delivery to new customers. As a result, the company fails to deliver an enjoyable customer experience on both fronts. This integration will eliminate the need for disparate systems and significantly improve the forecast accuracy of these mission-critical parts through real-time monitoring in the service supply chain.
Improving Supply Chain Flexibility, Traceability, and Predictability with Blockchain
Many new technologies have been and continue to be involved in the transformation of the supply chain industry over the years. However, problems such as lack of traceability especially for raw materials and lack of trust in data between parties have not been fully overcome. Dynamics 365 ERP has implemented a custom blockchain-based solution to address this issue. This new technology has resulted in significant and sustained cost savings by increasing traceability.
The lack of visibility, product-level traceability and predictability causes uncertainty in supply chain operations, even for companies with the most advanced supply chain management in the world. This leads to overspending, errors, risks of fraud, fraud and more. Microsoft's blockchain platform addresses these challenges, uncovering hidden costs, increasing end-to-end material traceability, reducing cycle time and revealing expanded margins.
All supply chains have parties on both sides of the chain. Reconciliation of data between parties, giving visibility to goods requires an understanding of the complex and multilateral relationship of these goods, invoices, purchase orders and refunds.
When parties are solving a system problem regarding traceability within the walls of the enterprise, they result in a fragile web of interconnected systems. The result is a lack of visibility that hinders agility and makes it difficult to increase cost-efficiency.
The dream of many technologists within the supply chain is a unified platform that provides inventory and financial traceability through production, shipping, warehouse and delivery to solve the visibility problems of goods on the road/in production/warehouse in multi-layer supply chains. Today's technology is finally ready to overcome this problem and it is now possible to demonstrate the traceability of materials to the end of their life or to achieve transparency in the procurement of raw materials.
Blockchain has distinctive features that can include unique product identification, tracking, visibility, and three or more suppliers. Traditional ERP systems help clustered enterprise system designers resolve two-sided relationships, but lose visibility in the three or more (n-tier) supplier relationships that are typical in complex supply chains. The data structure of the blockchain and the n-layer participation in a blockchain network are open possibilities previously constrained by existing approaches.
With this technology, a repository of industry tools and supply chain data can be created that benefits all participants, such as unique market data previously unavailable from any source.
The expected results are traceability of inventory from its source, in transport and storage, and at the destination. The system provides network participants with digitized business statements (Scope of Work), invoices, and digitized purchase orders (PO) of serialized items and related financial and information flows. This goes beyond traditional systems such as tokenized payment agreements, reduced risk, and lower loan costs, which are the foundation of digital transformation capabilities. The transformation in pay and pay will help build a more sustainable and resilient supplier base by improving cash flow and easing financing fees for the smallest suppliers.
With a collaborative focus, Microsoft has created an ecosystem in which all parties are actively involved.
"This is one of the most promising innovations I've seen applied to the industry's biggest challenges," says Chuck Graham, General Manager, Cloud Sourcing and Supply Chain, Microsoft. “The single, shared dataset that allows all parties to view, contribute and monitor data is revolutionary in its ability to build trust in data between all parties. Blockchain platform digitizes elements in a shared data structure, saving hidden costs, end-to-end item-level traceability, reduced cycle time, and saves on expanded margins."
... to be continued with Dynamics 365 Technologies vs Covid-19: Conclusion and recommendations.
