Microsoft Dynamics provides organisations with the capability to manage their operations and consequently drive huge efficiencies. In this blog we discuss the stock management capability in Dynamics. All of the capability discussed in this article is available in Dynamics AX and Dynamics 365 for Finance and Operations (formerly known as Dynamics 365 for Operations).

Many people look to an ERP for its finance capability but, as it says on the tin, it manages your resources, and stock is one of your key resources. Dynamics has the operations capability to effectively manage your inventory. It provides a wide range of tools that help you intelligently forecast and manage every element of your stock.

Products and product master

Products and product master refer to how Dynamics stores the various products or services your organisation produces. A product master represents a family of variants of a product. For example, if you make clothes, your product might be men’s shirts, with the product master listing out variations of this e.g. blue shirt size M, red shirt size S, purple shirt size L. Dynamics provides a range of pre-set product dimensions, such as size, volume and weight, to help you manage your own product groups.

You define your Bill of Materials (BOM) per product or product master variant. A BOM identifies which components are used to make the finished good. If you are a manufacturer using the production module you should use the routes feature which is a list of the steps or processes required in your manufacturing process. Think of your BOM as your ingredients and your route as your recipe.

Warehousing

Dynamics has warehousing and inventory management modules. It records the exact location of each item of stock. This can be across multiple warehouses, multiple sites or you can decide to split your warehouse up into multiple virtual warehouses to suit your needs.

Dynamics creates an easy to access record of each item of stock. For example, when you are required to access the item for a work order, Dynamics can be set up with directions to the item, information on forklifts and other equipment that may be required to access the item.

The system supports FEFO (first expired, first out) approaches to minimise wastage by ensuring anything with an impending expiry date is first to leave the warehouse.

It also has an easy interface that informs you how much stock you have in your warehouses, where it is and any financial values associated with it.

Stock ordering

One of the most important operational elements is having the correct amount of stock, and Dynamics AX has a number of helpful tools for this. These ensure that you have the stock you need to keep your operation moving and meet your customer needs. It also reduces the capital tied up in stock by using smart analytics to minimise overstocking.

Logistics in Microsoft Dynamics gives you the flexibility to manage inventory and purchasing according to your needs, with functionality to support forecasting, classifying and tracking inventory and the efficient creation and management of bills of material. The solution exchanges information with many other functional areas including production, master planning, trade, finance and CRM, to help ensure a high degree of synergy between logistics and other key areas of your business.

It supports automatic ordering that works between pre-set minimum and maximum stock levels. This allows you to minimise over and understocking.

Stock forecasting

Dynamics AX accepts stock forecasts on the Demand or Supply side. A consolidated stock forecast is automatically created from these. Multiple forecast models may be used to handle what-if scenarios, and forecasts may either be entered against a specific date, or may be automatically allocated.

Forecasts may be entered against individual items (or item variants if stock dimensions are in use), or they may be entered against Item Groups and automatically allocated to the constituent items using Item Allocation Keys.

Supplier Categories

Supplier categories designate approved or preferred suppliers which ensures you are always using the best suppliers for each product but still have back-ups available. It also keeps a record of any supplier certificates with expiry dates which ensures you are only buying from compliant organisations.

Supplier Portal

Suppliers can be set up as users on Dynamics to access the Supplier Portal. This is a powerful tool that easily manages your suppliers including how you communicate with them.
Supplier Notifications can be created for specific suppliers or contacts, for all suppliers or for suppliers of particular categories. They can be sent by email and/or published via the Supplier Portal.

As we have demonstrated in this article, Dynamics AX and Dynamics 365 for Finance and Operations is an extremely efficient and intuitive tool for supporting companies with complex operations including manufacturing (find out how we helped Veripos improve its operations with Dynamics AX). Employing the out-of-the-box functionality will result in large cost savings and efficiencies across your operation which will drive profitability and competitiveness.