5 ways to turn your supply chain into a value chain
Posted by Bethany Crease – 2 March 2017
No matter how good your supply chain is, without a centralised ERP platform there is always a risk that your production runs are less profitable than they could be. Using Microsoft Dynamics NAV, you can unlock those unrealised savings, turning your supply chain into a value chain that protects profit margins and creates satisfied customers.
These are just five ways in which Microsoft Dynamics NAV will help.
- Quality supplier management
The quality of your goods will determine whether a customer goes on to become a repeat buyer. As a result, your buyers need to prioritise those suppliers able to deliver the best quality components and materials at an acceptable price.Where buyers would once have worked from memory, or spread sheet based records, Microsoft Dynamics NAV allows your buyers to capture details of every supplier. More importantly, your team can then score suppliers on a range of factors – such as quality – ensuring that you work with the right businesses to build products of the highest quality.
- Improved sales forecasting
Sales forecasting has always been something of a dark art, combining educated estimates with the “gut feel” of experienced buyers. Unfortunately, this means that forecasting is only ever partially accurate.Microsoft Dynamics NAV helps to dramatically improve forecasting accuracy by making all of your historical manufacturing and sales data available. With the ability to view historical trends, and to filter and sort data in any way you choose, you can see exactly how your customers purchasing cycle works.Armed with that information, it becomes much easier to plan your own stock ordering needs, target sales efforts, and to estimate revenue for a given period. Which makes it much easier to keep your CFO happy.
- Smoothing out demand
Spikes in customer demand can cause serious problems for the finite capacity of your production line. Manually aligning your forecasts with the master production schedule (MPS) is incredibly complex and time-intensive – and a frequent source of overspend that eats into the profitability of each production run.By combining the MPS with improved forecasting, Microsoft Dynamics NAV helps to “smooth” your production schedule. By balancing each batch to ensure you never breach capacity, you are better able to deliver according to the client’s expectations.Factor in NAV’s manufacturing resource planning (MRP) functions which helps ensure you have the right components at the right time, and you have everything needed to make each production run as cost-efficient as possible without overburdening your own suppliers.
- Making purchasing parameters available
Businesses are often reliant on their buyer’s memory to store information about suppliers, their offerings and prices. Should a buyer leave, that information goes with them, potentially increasing manufacturing costs as your business tries to rediscover which component suppliers offer the best price-to-quality ratio.By using Microsoft Dynamics NAV to centralise information means that that data is always available – even when a buyer leaves. You can then use the information stored in NAV to identify the “right” supplier for every production run, using factors such as, components available, prices, and lead times. This indicates their ability to flex per your customers’ needs.Again, you simplify the buyer’s job, and maximise the value of your existing supply chain to lower costs.
- Improving stock availability
Where your sales team thinks in terms of completed units, buyers needs are more interested in the components that make up each unit. Buyers rely on sales forecasts to manage component purchasing so that the right products are in place at the right time for your customers.Microsoft Dynamics NAV automatically translates completed units’ forecasts into components, saving buyers the hassle of carrying out these calculations themselves. The time saved can then be reinvested in the supply chain, allowing for accurate, early ordering to avoid excessive shipping or storage costs for instance.
There’s value everywhere – if you have the right tools
Your supply chain can always be more efficient – as long as you have the right tools and data available. Just by improving the accuracy of your sales forecasting, Microsoft Dynamics NAV will immediately yield significant benefits. But as we have shown here, there are other savings and improvements to be made – and ERP software is at the heart of those transformations.
To learn more about Dynamics NAV and how your business can take advantage of ERP, please get in touch.