The COVID-19 pandemic and significant weather events have caused supply chain issues that have been covered by the media to no end. Reasonable considering no one has been immune to the domino effect from the supply chain crisis. Empty grocery store shelves, incredibly long delivery times for building materials, empty car dealership lots and rising costs at the register are all but impossible to ignore. Even with supply chain issues as a common topic in the news, few outlets have produced any solution or actionable insight into what can be done to improve supply chain efficiency. One of the best ways to surmount the current supply chain challenges is to employ the seven principles of supply chain management – and to utilize supply chain ERP technology to support each principal and create a more resilient supply chain.
hat are the seven principles of supply chain management? And how can technology help?
To understand how technology can be used to reinforce the seven principles of supply chain management, it is important to first have an understanding of what those principles are.
Principle 1: Improve inventory visibility
Knowing your inventory, how much you have and where you have it is critical to managing the supply chain. Removing blind spots and optimizing awareness of inventory is tricky but can be managed with the strategic application of ERP software like Microsoft Dynamics 365. The more familiar you are with your inventory, the better you can adjust to changes in the marketplace – all while supporting a healthy supply chain.
Principle 2: Manage supply and demand as a flow
It can be difficult to quickly react to surges in demand because manufacturing and shipping goods takes time. Equalizing the flow of inventory through the supply chain can help you ride out the ebbs and flow of the market. Consider more manageable, more frequent orders over large inventory drops to maintain this critical balance. Using Microsoft Power BI to automate the manufacturing process can also help you flatten the curve and avoid delivery delays or excess inventory.
Principle 3: Adopt a fast, flexible pipeline planning system
Efficiently and successfully managing your pipeline is another important piece to maintaining a resilient supply chain. Unfortunately, many manufacturers struggle with pipeline planning, as they relegate the planning processes to night or weekend hours. This can result in a major delay in identifying inventory needs and ramping up manufacturing to address them. Dynamics 365 offers the power and ability to provide pipeline planning around the clock, eliminating costly pipeline delays.
Principle 4: Use real-time analytics to measure volatility of demand
While historical purchasing data can be informative in predicting demand, expecting the past to give you insight into the future isn’t always the best strategy. The substantial fluctuations in demand during different periods, across various geographies, or within diverse demographics are difficult to predict based only on historical data. Real-time analytics are necessary to understand what’s happening now, and to identify and react to signs of changing demand. Microsoft Business Intelligence Reporting allows you to create custom notifications based on predefined thresholds to help you immediately react to these signals.
Principle 5: Improve forecasting models
Businesses have always focused on predicting demand fluctuation. Unfortunately, no one could have predicted the level of demand fluctuation faced since the early days of the COVID-19. A valuable lesson was learned from the pandemic, however – businesses cannot depend on archaic forecasting practices. Instead, modern organizations must increase the amount of available data used in their forecast models, including real-time insight and information gained across the supply chain and marketplace. The Microsoft ecosystem presents the power and functionality necessary to collect this crucial data, manage it, and integrate it into actionable forecasting models.
Principle 6: Diversify suppliers
Another difficult lesson learned from the pandemic is that businesses need to sustain diverse supplier networks to deal with unexpected demand or delays. Unfortunately, managing multiple vendor relationships can be problematic, especially when those suppliers are in different parts of the world. Dynamics 365 and erm360 from HSO can help you develop, maintain, and monitor the diverse supplier relationships that these trying times demand.
Principle 7: Create new distribution networks and channels
COVID-19 shone a spotlight on the disadvantages in traditional distribution networks and channels. During the pandemic, consumers began looking for new ways of obtaining goods, food, entertainment, and more. Empowering innovative distribution networks and delivery methods is imperative to addressing the current crisis. However, even after the pandemic has subsided, these new channels will likely continue to be pursued by consumers. Technology will play a significant role in supporting these channels and helping to predict new trends for distribution.
To learn more about the seven principles of supply chain management and the role technology plays in sustaining a resilient supply chain, read Microsoft’s eBook, Seven Principles of Supply Chain Management or visit our Supply Chain Resiliency hub for additional information.
Why Microsoft Dynamics 365?
Microsoft Dynamics 365 is paving the way for manufacturers to strengthen and innovate in a rapidly changing economic climate. By providing organizations of all sizes with a secure, cloud-based platform, with the right tools to manage their supply chain, finances, and operations, in addition to support for customer relationships from a single application, you can achieve complete control and full visibility across all areas of your business.
Learn more about HSO for Manufacturing and how we’re helping businesses like yours with award-winning Microsoft technologies, like:
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