To manage their supply chain, companies face challenges related to operational efficiency, resilience, and the ability to adapt quickly to market changes. Microsoft supply chain management solutions offer a combination of advanced technologies, such as artificial intelligence, real-time data analysis and cloud computing to achieve these objectives, optimizing internal processes, reducing risks and costs, and improving visibility across the entire supply chain. In this article, we are going to take a closer look at the solutions that Microsoft puts in place for supply chain management and why you should choose them for your business.
Supply chain management (SCM for short) is the management of the flow of goods, data and financial resources related to a product or service, from the supply of raw materials to the delivery of the product to its final destination.
Although many people associate the supply chain with logistics, logistics is actually only one component of the supply chain.
SCM's modern digital systems include material handling and software for all parties involved in creating the product or service, fulfilling orders and tracking information, such as suppliers, manufacturers, wholesalers, transport and logistics operators, and retailers.
Supply chain activities include procurement, product lifecycle management, supply chain planning (including inventory planning and maintenance of business assets and production lines), logistics (including transportation and fleet management), and order management. SCM can also extend to activities related to global trade, such as the management of international suppliers and multinational production processes.
Microsoft, which has always been at the forefront of improving the quality of work of companies and professionals, offers various solutions that can help in the management of the Supply Chain, which we will explore in the next sections.
But first, a quick review.
The application of radically new technologies to production has been defined as Industry 4.0, or the “fourth industrial revolution”.
In this last phase of industrialization, technologies such as artificial intelligence, machine learning, the Internet of Things, automation and sensors are transforming the way companies produce, maintain and distribute new products and services. It can be said that Industry 4.0 is based precisely on the supply chain.
In Industry 4.0, the way in which companies apply technology to the supply chain is profoundly different than in the past. For example, in the maintenance function, companies waited a while for a machine to fail before intervening. Smart technology has changed all that. Now we can predict failures before they occur and take action to prevent them, thus allowing the supply chain to continue without interruption.
Today's SCM, therefore, is based on the use of these technologies to make the supply chain (and the entire company) smarter.
Industry 4.0 SCM also offers a significant advantage over traditional SCM, as it allows for aligned planning and execution, while ensuring significant cost savings.
Companies that operate according to a “plan-to-produce” model, in which production is closely linked to customer demand, must make accurate forecasts. This requires balancing numerous inputs to ensure that what is produced meets market demand without exceeding it, thus avoiding costly surpluses. SCM's smart solutions can help meet customer demand and financial objectives at the same time.
Smart SCM also has other advantages.
For example, it can free staff from repetitive tasks, allowing each worker to contribute to the growth of their organization with activities with greater added value. More advanced SCM systems, which automate ordinary activities, can provide these professionals with the tools necessary to successfully deliver the products and services around which the supply chain is built.
Given the current needs and characteristics of SCM, the cloud appears to be a natural ally, in part because cloud-based applications are inherently more flexible and adaptable to changes.
It is very difficult to adapt on-premises applications in response to the changing circumstances that now occur regularly, such as a supply problem.
Cloud solutions are designed to make the most of the technologies that are becoming pervasive in Industry 4.0, while adapting a “classic” infrastructure so that these technologies can work on legacy applications is as complicated as it is expensive.
Another advantage of cloud integration concerns the possibility of adopting elements of SCM based on the specific needs of the company, without having to undertake a large scale migration.
In fact, many companies find themselves having a short-term need to rationalize their move to the cloud. The best SCM systems help you extract more value from current assets and customize cloud integration to meet your SCM needs, at any time.
Given the premises, it is difficult to think directly in terms of functionality, precisely because supply chain software is a macro-category that encompasses several subclasses, more or less integrated and synergistic with each other.
The market is full of solutions but, given the extension of SCM, modularity is at the highest levels: the best-known solutions, such as those of SAP, are actually an ecosystem of integrated functionalities both with each other and with the rest of the ERP, requiring a synergy with all business departments, such as the finance, administrative and commercial departments.
The same applies to other renowned solutions such as Microsoft's Dynamics 365, the Oracle Fusion Cloud suite and even Netsuite, always within the Oracle ecosystem. A similar approach is also that of TeamSystem and many other independent ERP solutions that integrate, in fact, SCM modules and functionalities. On the contrary, SCM suites are available that integrate typical ERP elements: an example is Logility.
Given all the above considerations, choosing the right supply chain software can be a challenge, as there are numerous criteria to consider.
First of all, a certain ability to adapt to processes is a must.
Large international solutions are usually aimed at an enterprise target that must manage distributed and complex supply chains, integrating with the management flows governed by the ERP.
As we have seen, in fact, large management software manufacturers have one or more modules dedicated to the management of supply chains. An assessment of the existing processes, the available budget and the identification of any destructured phases, managed manually or even on paper, can guide the company towards the correct solution.
Other important aspects about software selection are scalability, which may not be a problem in the cloud era, the simplicity of integration with other management and departmental tools, and flexibility, since the supply chain is a constantly evolving system; therefore, the software must be able to adapt quickly to changes and to the specific needs of the company.
Again, the innovative drive is important: now artificial intelligence dominates every sector and SCM is no exception, starting from the demand forecast. Last but not least, data security is an essential criterion, but it goes beyond the specific requirements of supply chain software.
These features are all fully reflected in the Microsoft offering.
Let's see the proposed solutions below.
To successfully implement business processes within the Microsoft 365 ecosystem, the following skills are needed:
Dev4Side Software has the vertical technical skills to provide you with a single, transversal point of contact for all the elements of your subscription.
The first one we're going to look at is Dynamics 365 Supply Chain Management, which helps users manage product planning, production, warehouse management, and order fulfillment processes. The tool offers a comprehensive view of an organization's supply chain and inventory, helping managers make more informed decisions.
This platform also offers AI-based forecasting capabilities to help users predict trends in customer demand. In addition, users can integrate Dynamics 365 Remote Assist and Guides to reduce equipment downtime on production sites.
Dynamics 365 SCM was originally designed as a cloud-based solution, but it can also be delivered as an on-premises solution.
Basically, it is a solution accessible anywhere, that can be used on PCs, laptops, tablets and smartphones, and that supports management processes by organizations with high volumes of internal transactions and offices in different countries, thanks also to support for multiple languages.
Let's see some of its most important characteristics in the table below.
Dynamics 365 SCM isn't the only Microsoft tool for supply chain management. Another suite of tools from the Redmond house can play an important role in helping your company maintain control of its supply chain.
This suite is the Power Platform, the suite created by Microsoft to simplify the digitization and automation of internal processes, which includes Power Apps for low-code development, Power Automate for creating automation flows and Power BI for data analysis and creating dynamic reports.
The platform has experienced surprising growth in recent years with more than 2.5 million active developers.
Let's see the components of the suite and understand how they can help us.
Microsoft Power Apps is a cloud-based low-code development solution that allows you to create tailor-made applications without the need for any programming knowledge, thanks to a versatile and intuitive system, similar to a virtual construction set. Using Power Apps, you can design the appearance and operation of your applications, connect them to different types of data, such as Excel sheets or business databases, and have them run on a computer, tablet or smartphone.
This product makes the development of custom applications an activity accessible to any user and thus helps companies to save on programming and distribution costs.
Precisely because of these characteristics, it becomes possible to facilitate the digitalization and automation of critical processes in the supply chain. With Power Apps, companies can create solutions for order monitoring, inventory management or material traceability, improving visibility and control over supply flows.
Microsoft Power Automate, formerly known as Microsoft Flow, is a cloud software that allows you to automate workflows and activities, across multiple applications and services, without the help of developers.
Automated workflows are called 'flows'. To create a flow, the user must specify what action should be performed when a given event occurs. Once a flow has been created, it can be managed on a desktop or through an app on a mobile device. Power Automate integrates with third-party services and Microsoft applications, including Power BI, PowerApps, Dynamics 365 and Microsoft 365, to simplify every type of activity within your digital workplace.
In the case of SCM, it can be used to automate the reordering of stocks, the sending of notifications about delivery delays, or the synchronization of data between different ERP and CRM systems.
Microsoft Power BI is a business intelligence (BI) platform that provides non-technical users with tools to aggregate, analyze, visualize and share business data. The interface is fairly intuitive for those familiar with Excel, and the deep integration with other Microsoft products makes this tool a versatile 'self-service' that requires little prior training.
Power BI is used to find insights within an organization's data.
It can help connect disparate sets, transform and clean information into a data model, and create interactive charts to allow everyone in the company to interpret insights.
Data models created with Power BI can be used in a variety of ways, including:
The tool also provides practical dashboards, giving management greater visibility into how departments are doing.
In the field of supply chain, Power BI provides advanced analysis tools to monitor chain trends.
Thanks also to the ability to integrate data from different sources, it can allow operators to identify bottlenecks, predict market demand and improve logistics planning.
Perhaps GenAI could have been missing as a solution for managing the supply chain?
Obviously not, and Dynamics 365 Copilot is the version of the well-known Microsoft assistant specific to supply chain management, created to be used within Dynamics 365.
When Microsoft introduced this new solution in March 2023, it offered companies the first natively integrated AI assistant for CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) software.
Basically, Copilot is an add-on for existing Microsoft tools. To access it, you must have a compatible subscription to Microsoft Dynamics 365 and any ancillary applications that you want to use.
Some Copilot features are already included in specific subscriptions, and Copilot for Dynamics 365 integrates with all applications in the Dynamics ecosystem, offering unique advantages for different workflows.
This offer gives in particular the opportunity to equip workers with artificial intelligence tools for roles related to sales, services, marketing, operations and, in our case, supply chain.
Companies can use Copilot to create precise answers to chain management questions, using access to existing documents and files. Users can also interact with Copilot to obtain real-time insights and forecasts on the progress of the entire process.
You can also ask the assistant to assess the impact (and potential risks) of any changes to procurement decisions. In the future, Microsoft expects that it will even be able to suggest to users how to carry out their activities to improve the overall management of the chain.
Having full control of the supply chain was probably a crazy dream up to twenty years ago, but Industry 4.0 has demonstrated that today, with the right technology, this is no longer an unlikely fantasy, but a concrete possibility that all companies can (and should) take advantage of.
With Microsoft, it is now possible to monitor, automate and manage every single link in the chain in a comprehensive manner, making speed and efficiency the natural consequence of the adoption of the best tools that the Redmond company makes available to its customers.
Supply chain management is the set of activities and processes that allow the management of the flow of goods, data and financial resources, from the supply of raw materials to the delivery of the finished product to the customer. It is not limited to logistics but also includes procurement, planning, production, order management, logistics, and activities related to global trade. It is a strategic function for efficiently coordinating all phases of the value chain.
Although often confused, supply chain and logistics are not synonymous. Logistics is mainly concerned with the transport, distribution and handling of materials. The supply chain, on the other hand, has a wider reach and also includes the procurement of raw materials, production, inventory management, order processing, collaboration with suppliers and many other activities that contribute to the creation and delivery of a product or service.
Digital solutions allow companies to increase efficiency, reduce costs and improve visibility and control over every phase of the supply chain. Thanks to advanced technologies such as the cloud, artificial intelligence and real-time data analysis, it is possible to make more informed decisions, anticipate problems and make the entire chain more resilient to market changes.
With Industry 4.0, the approach to supply chain management has changed radically. Companies no longer just react to failures or changes in demand, but they use intelligent technologies to prevent them and optimize every process. Artificial intelligence, IoT and sensors allow much more precise planning and execution, making the entire production chain more streamlined, efficient and able to adapt quickly to changes.
The cloud represents a strategic resource for supply chain management, because it allows companies to adapt more easily to unforeseen events and changes, while maintaining the flexibility necessary to operate in a dynamic environment. In addition, it allows new technologies to be integrated more easily than legacy solutions, and offers the possibility of adopting specific functionalities without having to face a radical transformation of the existing IT system.
Choosing the right solution depends on several factors. It is essential to evaluate the software's ability to adapt to business processes, the ability to easily integrate with other systems such as ERP, the scalability of the infrastructure and the flexibility to adapt to changes. The availability of functionalities based on artificial intelligence and the guarantee of data security are also decisive aspects. An initial analysis of existing processes, budget and operational issues can help identify the most suitable solution.
Microsoft offers a complete and integrated ecosystem for supply chain management, which includes tools such as Dynamics 365 Supply Chain Management, the Power Platform suite and Copilot for Dynamics 365. Each of these solutions offers specific functionality, but all are designed to improve control, automation and operational intelligence of the supply chain, with strong integration between them and with the entire Microsoft 365 ecosystem.
Dynamics 365 Supply Chain Management is a cloud solution designed to support companies in planning, production, warehouse management and order fulfillment processes. It provides a complete view of the supply chain, supports predictive capabilities based on artificial intelligence, and can be used anywhere, from any device. It is ideal for companies with complex operations distributed across multiple offices and languages, thanks also to its integration with other Microsoft tools.
The Power Platform, consisting of Power Apps, Power Automate and Power BI, allows you to digitize, automate and analyze supply chain processes quickly and efficiently. With Power Apps you can create tailor-made applications even without development skills. Power Automate allows you to automate recurring workflows, improving operational timeliness. Power BI helps to monitor supply chain data and transform it into useful insights for making decisions based on concrete evidence.
Copilot for Dynamics 365 is the generative AI assistant designed to support professionals in daily activities related to the supply chain. It offers quick and contextual answers, allows you to summarize complex conversations and documents, assesses the risks associated with decisions and suggests concrete actions to better manage operations. It's designed to free up time, increase productivity, and make supply chain management smarter and more result-oriented.
To successfully adopt Microsoft solutions dedicated to the supply chain, it is advisable to contact specialized technological partners such as Dev4Side, able to support companies in all phases of the project: from the analysis of processes to the implementation of platforms, up to the development of customized solutions. This type of support makes it possible to effectively integrate tools such as Dynamics 365, Power Platform and Copilot into business flows, ensuring concrete results in terms of efficiency, visibility and automation of the supply chain.
The Modern Work team specializes in developing and integrating custom solutions across the entire Microsoft 365 ecosystem. We design native applications for Microsoft and Azure platforms, and we implement business processes that maximize the return on investment in Microsoft 365.
