Supply Chain Resilience: Improve Forecasting Through Better Visibility

In our previous post, we discussed building supply chain resilience by meeting challenges with digital transformation. Now we’re going to take those major market trends and look at how manufacturers can meet them head on with some real tangible solutions out of the Microsoft solutions stack. First, we’re going to look at supply chain visibility, and we’re going to talk about the ways manufacturers can get the visibility they need to produce better forecasts. The next area we’re going to talk about, and it’s really hard given this current environment not to talk about it, is building resilience by empowering your remote workforce.

A very important part of supply chain resilience is being able to adapt to changing customer demands, and there’s a number of things here we can unpack. Lastly, we’re going to bring it all together with the digital feedback loop. We’re going to look at how data underlies all of this, and the data that’s been produced from your ERP systems, your CRM systems, how you can bring that all together. We’re going to look at how that digital feedback loop will help organizations become more effective and simply more resilient in this environment, so let’s kick off.

Supply Chain Visibility

How do you build resilience through improved forecasting by using the tools that help with supply side, operational side, and demand side visibility? Before we really dig in, I don’t want to ignore the obvious. When we’re talking about supply chain visibility, there is a piece here that’s really important, and that’s the ability for you, as manufacturers, to be able to share with your vendors and suppliers things like your purchasing plans. Of course, a lot of people sit back and go, “Well, you know, I don’t really want to share them. It’s telling them things I don’t want them to know, or I’m not confident enough in my data to share them.”

I don’t want to go past the discussion about it being part of the relationship that you build with your vendors and being comfortable and being able to share not only your purchasing plans, but asking them to share their production plans and having them have the confidence to give you the information about their production plans. This technology and the use of technology goes all the way up and down the supply chain. If you’ve got a vendor that is not confident enough to give you a picture into their supply, is that the kind of supplier you feel that you’re going to be able to build resilience with?

Building Visibility With D365

When we think of supply, we’re thinking about raw materials, componentry, sub-assemblies. These things go into the manufactured product, and we’re also talking about subcontractors, right? We’re pushing equipment or materials out to be made separately. Let’s talk about Microsoft Dynamics 365 for supply chain management and how it helps manufacturers collaborate with vendors and give them better visibility.

The first thing that really comes to mind is around your vendor collaboration portals, which are standard with Dynamics 365. This feature provides a secure workspace that allows for active collaboration between manufacturers and their suppliers throughout the entire procurement process. This includes functionality to alert vendors for any changes on Purchase Orders (PO). In addition, you can also attach drawings, notes, and instructions that really drives that collaborative active process. It doesn’t just stop at the PO process. You can continue that all the way through receipts with ASNs, advanced shipping notices, receipt acknowledgements, etc., all the way through the invoicing process, matching, and payments.

This functionality is really driven and provided for organizations who don’t necessarily need EDI or electronic data interchange at this point in time, but they really want that active communication between themselves and their suppliers. This is really a collaborative space that can be used as a centralized place to store manufacturing schedules, purchasing plans, supply contracts, pricing negotiations, and much more.

But what about the security with vendor collaboration portals?

By utilizing the standard functionality of the vendor collaboration portal, manufacturers have every security box checked. The collaboration portal uses the same level of security, setup, and access as Dynamics 365 does itself. When you’re sending out RFQs, purchase orders, and other data via that portal, manufacturers can truly be assured that the process is secure, and in most cases, it’s actually a lot more secure than sending these things via email, text message, or instant message as many people do today.

Vendor-managed inventory in collaboration portals

Vendor managed inventory or vendor consigned inventory is a standard feature with Dynamics 365 and as is extended through the vendor collaboration portal as well. Typically, you have some inventory and you need to report when that inventory is consumed. The vendor knows, one, when to bill you, and two, when to actually ship you more inventory so you don’t run out. With the collaboration portal that allows for all of that functionality, it takes a lot of the friction out of the transaction process, and also removes some of those really scary spreadsheets we’ve seen people managing that VMI inventory.

The dual entry of data and transactions is never a good thing, right? There’s a reason for error. There’s different opportunities for mistakes to happen when entering that transaction. Dynamics offers punch out purchase requisitions, which allows you actually to connect to your vendor’s e-commerce site, log in, load your shopping cart up, and it actually can pull that data down from their specific e-commerce site into our purchase requisition, pulling in things like purchasing authority, purchasing limits, pricing, other contractual agreements, all into that process. It really helps eliminate that user error and also eliminates that friction between you and the vendor itself.

Vendor Qualification Process

D365 additionally has a process that helps you manage the vendor qualification to the approval, including the eventual onboarding of that vendor to approved vendor lists that allow you to have primary or preferred vendors, as well as secondary vendors. Then once you’ve actually identified that correct vendor, you can be assured that there is a way to collect data on those vendors, as well as evaluate those in a consistent and secure manner, which really helps give you the transparency you need when creating a resilient supply chain.

Breaking down silos for visibility

Typically, when we go into an implementation or we’re dealing with our clients, there’s a disconnect between various systems. Engineering may be doing one thing in one system where it may be disconnected from the ERP. They may be using some type of CAD design software, and there’s a really big gap between moving that data from the CAD system into Dynamics 365 or their chosen ERP system, where they’re controlling bomb versions and things like that. The fact that Microsoft Dynamics for supply chain management allows you to integrate with those CAD systems through connected PLM systems really allows item master records and data to be managed properly and passed between the two systems seamlessly.

This also can enable real-time access to detailed drawings and build material versions all from within that manufacturing application.

Shop Floor Visibility

Imagine a scenario where at any given moment, you’re able to see in real time where any giving manufacturing production or work order is. That visibility can help you in a number of ways, starting with inventory management, but it can also help you with that customer service aspect. For example, a customer may need to know up-to-date, minute-by-minute, step-by-step information about their order. It seems funny that we can track when a pizza is being delivered to our driveway, but when I’m ordering a big piece of equipment, I don’t know where it is or when it’s going to be delivered.

With Dynamics 365 and some of the supporting activity, you can provide that level of visibility to your customers and really drive that customer satisfaction.

Warehousing and Transportation Visibility

The same level of automation is available through the warehousing and transportation solutions within Dynamics 365. We have an integrated warehouse management system, as well as transportation management system that helps provide the visibility of movement of products, completing production processes, and other things like that throughout the warehouse, as well as tracking things all the way to the customer’s doorstep. You really have an idea of where the goods are, when will they be delivered, and can promise that with a high degree of attainability when talking with your customers.

Master Resource Planning

D365 has a few different features and functions out of the box for maintenance and MRP or master resource planning. The first is an integrated and sophisticated enterprise asset maintenance tool. This is a solution that helps you schedule your preventative maintenance, your scheduled maintenance, as well as account for unscheduled maintenance. Some of these different features and functions allow you to reduce the risk of machinery breakdown, as well as allows you to create your manufacturing schedules, accommodating the necessary maintenance work and down times.

Then on top of that, D365 has what traditional ERPs have called MRP, but one thing that they’ve changed that is moving forward, a really fantastic feature is around in-memory MRP. What that means is they’ve actually reduced and removed the processing power from the back end of the ERP which creates a much quicker MRP run, which allows you to run MRP plans much more frequently as well as have the adaptability to change what those customer demands.

In addition to that, you get more usable capable to promise and available to promise functionalities, because you’re truly getting up-to-date, real-time information about where goods are at in the process, whether we’re expecting goods for a receipt, or we’re looking at an overall manufacturing process of when we can complete that production.

Understanding Demand

Now that we know how to understand the demand from a manufacturing perspective, how do we understand the demand that’s coming from customers and sales generated activities? Business today really reacts to trends, and they don’t spend a lot of time really understanding and predicting. When we look at all of this and we talk about that, it really comes down to the simple fact that you need to understand how your customers are buying today. The simplest and easiest way to do that is through your sales pipeline and in your seller’s performance. Ask your organization, how is sales performing against their quotas?

Most organizations today cobble together their pipeline in Excel spreadsheets. They’ve got this static version of information that they share and circulate, and it’s not real time. That’s a struggle for a lot of sellers, because they’re really trying to understand where are they against their quota, what do I need to do in order to achieve my quota, how can I take this to the next level? Now we all know sales people are competitive by nature. Waiting to share that information with your sales team as to where they are based off of performance until quarter end or year end can create some ease or unease and nervousness. A good solid understanding of a pipeline rolled up by territory and region is important.

Relationship Monitoring

Relationship monitoring is a phenomenal concept that when we start to talk to our customers about this, they look at it and they say, “Wow, that’s really neat. I can understand the investment that not only we’re making in each pursuit, but our customers are making as well.” Then you’ve got all the ability to analyze that information and determine how you’re working on deals. When I talk about relationship monitoring, I’m talking about turning on some of the native features that you have inside of Outlook and Exchange that allow you to measure the back and forth communications that are going on with your customers, as well as all the general activity that you’re creating inside of your CRM system.

How much time are you spending with your prospects? How much time are the prospects spending back with you? Are they opening up your emails? Are they forwarding the emails? Are they interacting with the clicks in your emails? Then you take that information and you score it and grade your customers. That’s really valuable information. If you think of it this way, if your team is spending 90% of the time in a particular pursuit, reaching out to that customer, trying to get them to engage to get that deal closed, what’s the likelihood that that’s actually going to physically happen? It’ll give you some KPIs and visibility into your sales pipeline based off of the interactions your sales organization is having on a regular basis.

Intelligent Forecasting

Now, now that you’ve got that information inside the system, let’s talk about intelligent forecasting. We’re not just talking about sales pipelines at this point. We’re talking about trends and understanding how deals are moving from the beginning of the quarter to the end of the quarter, what happens in between, how are deals slipping, what’s the impact of that movement, not only today the impact of the movement on the pipeline, but to what Jeremy was talking about earlier with demand planning for materials? Looking at that information, understanding how deals move, and understanding how your sales organization moves those deals to the pipeline is critical.

It allows you to understand how things happen early in the quarter could negatively impact your forecast at the end of the quarter. We’re turning the sales pipeline into a true forecast that gives the organization the ability to positively impact their pipeline in demand by understanding how deals move through the business.

Building Resilience and Visibility With Your Remote Workforce

This is something that I am really passionate about because nearly everybody is working from home. We’re lacking that face-to-face interaction with customers today.

Keeping customer information together consolidated in a single view, where I’ve got not only their opportunities, but all of the interactions that are going on in one location is really important for me as a seller when I’m trying to interact with you virtually, either over the phone or online. Now take into that some of the great things that Microsoft can bring to the table, like we talked earlier about Outlook and pulling content in from Outlook to talk about the engagement. Not only can we do that, but we can pull content out of the specific email and attach it to that contact card.

When you’re interacting with a prospect and they’re talking about a competitor, or they’re talking about personal time or trips or vacations or health or their favorite sports team, that content can get stripped out of that Outlook email and put side by side inside of that contact record. Now I’ve got this warm conversations that I can interact with. Maybe I can talk with a potential customer about the hockey game last night and which team was going to win. That information gets pulled out and put right next to that contact record, which is important because you want to maintain that relationship. When you’re not face to face, you’re going to need to have stuff that can cue you up to drive you right back into that conversation.

In our next post in this series, we will cover building supply chain resilience with your remote workforce a bit more deeply. If you have any questions about improving forecasting with better supply chain visibility, please contact us at any time.

This blog’s content was sourced from a webinar recorded on September 23, 2020 at 2PM ET/ 11AM PT with Presenters Kristin Amenson​, Debbie Altham​ and Jeremy Centner, in partnership with Sikich LLP and Microsoft.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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