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Seven Principles to Improve Supply Chain Management

Brenda Somich
25 Jan, 2022

The supply chain issues resulting from the COVID-19 pandemic and significant weather events have been covered in the media to seemingly no end. And for good reason, as no one has been immune to the fallout from the supply chain crisis. Bare grocery store shelves, long lead times for building materials, empty dealership lots and rising costs at the checkout are all but impossible to ignore.

While supply chain issues are a common topic in the news, few outlets have provided actionable insight into what can be done to improve supply chain efficiency.

One of the best ways to overcome the current supply chain challenges is to apply the seven principles of supply chain management – and to use technology to support each principal and make the supply chain more resilient.

What are the seven principles of supply chain management? And how can technology help?

To understand how technology can be used to support the seven principles of supply chain management, it is important to first understand what those principles are.
  • 1

    Improve inventory visibility

    Knowing how much inventory you have, and where you have it is crucial to managing the supply chain. Eliminating blind spots and optimizing awareness of inventory is difficult but can be managed with the strategic application of ERP software like Microsoft Dynamics 365. The more visibility you have into your inventory, the better you can adapt to changes in the marketplace – all while supporting a robust supply chain.

  • 2

    Manage supply and demand as a flow

    Manufacturing and shipping goods takes time, making it difficult to quickly react to surges in demand. Balancing the flow of inventory through the supply chain can help you weather the ebbs and flow of the market. Consider smaller, more frequent orders over large inventory drops to maintain this crucial balance. Automating the manufacturing process using Microsoft Power BI can also help you flatten the curve and avoid delivery delays or excess inventory.

  • 3

    Adopt a fast, flexible pipeline planning system

    Effectively managing your pipeline is another important part of maintaining a resilient supply chain. Unfortunately, many manufacturers struggle with pipeline planning, as they reserve the planning processes to night or weekend hours. This can create a major delay in identifying inventory needs and ramping up manufacturing to address them. Dynamics 365 offers the power and capability to maintain pipeline planning around the clock, eliminating costly pipeline delays.

  • 4

    Use real-time analytics to measure volatility of demand

    While historical purchasing data is certainly helpful in predicting demand, looking to the past for insight into the future isn’t always the best strategy. The significant fluctuations in demand during different periods, across various geographies, or within diverse demographics are hard to predict based on historical date. You need real-time analytics to understand what’s happening now, and to identify and react to signals of changing demand. Microsoft Business Intelligence Reporting allows for the creation of custom notifications based on predefined thresholds to help you instantly react to these signals.

  • 5

    Improve forecasting models

    Predicting demand fluctuation has long been a focus for businesses. Unfortunately, despite this long-standing effort, no one was able to predict the level of demand fluctuation experienced since the early days of the COVID-19 pandemic. A valuable lesson was learned from the pandemic, however – businesses cannot rely on outdated 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 offers the power and functionality needed to gather this crucial data, manage it, and synthesize it into actionable forecasting models.

  • 6

    Diversify suppliers

    Another hard lesson learned from the pandemic is that businesses need to maintain diverse supplier networks to address unexpected demand or delays. Unfortunately, managing multiple vendor relationships can be difficult, 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 needed during these trying times.

  • 7

    Create new distribution networks and channels

    COVID-19 shed a spotlight on the weaknesses in traditional distribution networks and channels. During the pandemic, consumers began exploring new ways of obtaining goods, food, entertainment, and more. Empowering innovative distribution networks and delivery methods is important to addressing the current crisis. However, even after the pandemic has abated, these new channels will likely continue to be sought after by consumers. Technology will play a key 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 supporting a resilient supply chain, read Microsoft’s eBook, Seven Principles of Supply Chain Management for more information. 

Why Microsoft Dynamics 365?

With a secure, cloud-based platform that you can trust, 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 the right tools to manage their supply chain, finances and operations, along with support for customer relationships from a single application, you can gain complete control and full visibility across all areas of your business.

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