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One does not simply walk into supply chain software – but Microsoft is giving it a shot

New features announced for Dynamics 365, but is it enough in 'notoriously tricky' market?

Ignite Microsoft has confirmed new features for its supply chain software in a bid to boost its stature in a market packed wall to wall with established competition.

At the Ignite conference, Microsoft made public the add-ins for Dynamics 365 Supply Chain Management designed to improve visibility and help users quickly respond to changing demand and supply.

Dubbed Cloud and Edge Scale Unit and Inventory Visibility, the release is very much pitched as a answer to the COVID economy, which is characterised by unpredictable demand and supply.

"The add-ins allow organizations to run critical warehousing and manufacturing workloads on the Edge using Azure stack devices to improve resilience and ensure 24/7 operations even when temporarily disconnected from the cloud," Microsoft said.

Inventory Visibility add-in for Dynamics 365 Supply Chain Management is designed to reveal cross-channel inventory accurately in real time. Microsoft's lack of pedigree in supply chain management and analytics is exposed by the fact that the module was formerly known as Dynamics 365 for Finance and Operations; it is hardly supply chain focused.

Meanwhile, better-established players including SAP, Oracle, and IBM have focused on supply chain for years. ERP vendor Infor bought GT Nexus, a supply chain risk and visibility specialist, in 2015. Finance and HR SaaS vendor Workday is also having a go.

Some industries have their own solutions. The European aerospace industry, for example, runs a system called AirSupply, based on supply chain integration technology from SupplyOn, which tries to avoid supply bottlenecks by bringing together data almost exclusively from SAP systems.

There are other specialists in demand forecasting too. MIT engineering professor David Simchi-Levi built machine-learning models to predict the result of retail flash sales using a standard statistical modelling language called R. It is available commercially in the cloud through OPS Rules, which was bought by Accenture in 2016.

In 2018 US supply chain software biz JDA bought German deep-learning vendor Blue Yonder, which was founded at the CERN particle accelerator by Michael Feindt. It specialises in retail demand forecasting using internal sales data, stock item features, cultural events, and weather data.

Emile Naus, partner at management consultancy BearingPoint, said: "Supply chain software is notoriously tricky. The core issue is that there are a large number of different types of supply chain, each with their own particular physical, operational, economical, and legal restrictions.

"There are some well-established players that typically cover a sector or function, and few systems cover the full supply chain spectrum well. Supply chains are dynamic, and any software solution would need to be intrinsically flexible."

For Dynamics 365 to make inroads into the market, it would need to strike the right balance between enriched functionality tailored to specific industries and use cases against "out-of-the-box" capabilities, Naus said.

For its part, Microsoft has committed to share data across systems from different vendors, a vital part of supply chain management, using a Common Data Service and integration layer to allow Dynamics 365 Supply Chain Management to work with SAP Ariba, and other big players.

Microsoft has also created a common data service (CDS) dubbed Inventory Visibility. The platform-based standalone microservice is integrated with Dynamics 365 Supply Chain Management and provides REST APIs to connect with any external systems that manage inventory information, Microsoft said. ®

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