Dynamics 365 Supply Chain Management
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Mar 27, 2024
Published date
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AI Summary
- The article discusses the improvements in MRP (Material Requirements Planning) since the availability of Planning Optimization in Dynamics 365. One of the key improvements is the introduction of Demand Driven MRP (DDMRP), which has helped resolve issues such as stockouts, shortages, lead time, and performance for customers using traditional MRP.
- Some of the improvements achieved through DDMRP implementation in Dynamics 365 include improved customer service with a consistent on-time fill rate of 97-100%, lead time reductions of up to 80% in various industry segments, right-sizing of inventory with typical reductions of 30-45% while improving customer service, and lower total supply chain costs by eliminating costs related to expedite activity and false signals.
- Microsoft has followed the 5 steps described by the DDMRP institute, which include strategic inventory positioning, buffer profiles and levels, dynamic buffer adjustments, demand-driven planning, and highly collaborative and visible execution.
- Activating the "DDMRP for Planning Optimization" feature is necessary to fully implement DDMRP in Dynamics 365, and it requires a Tier 2 sandbox.
- The feature enables the calculation of decoupled lead time for items, specification of decoupling points in inventory, management of min, max, and reorder values for decoupling point items, and creation and prioritization of supply orders for decoupling points based on net flow position.
- The article introduces the concept of decoupling points, which occur when the supply chain process changes from push to pull. Decoupling points help prevent stockouts and occur when a semi-finished product is available at any time.
- The article provides an overview of the new features added for DDMRP in Dynamics 365, including a new menu in the Master Planning module, a new coverage code value for decoupling points, new fields in the DDMRP parameters, and new tabs and fields in the Item coverage section.
- The article focuses on inventory positioning for DDMRP and explains how decoupling points are identified to mitigate the bullwhip effect. Criteria for isolating decoupling items include external variability, inventory leverage and flexibility, critical operation protection, customer tolerance time, sales order visibility horizon, and market potential lead time. The decoupled lead time is calculated based on the longest lead time to supply the item.
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