Dynamics 365 Advanced Warehouse Management [A Comprehensive Guide]

Dec 27, 2023 Aiswarya Madhu

In an era where timely delivery is synonymous with customer satisfaction, the key to meeting and exceeding customer expectations lies in leveraging digital transformation. Here's where cloud solutions like D365 advanced Warehouse Management come into play, offering the agility and speed needed to meet today's high customer expectations.

Dynamics 365 Advanced Warehouse Management (AWM), part of the Dynamics Finance & Supply Chain Management suite, enhances warehouse operations with inventory control, order fulfillment, and analytics. Designed for modern business needs, it facilitates efficient inbound and outbound logistics, boosts operational visibility, and supports growth by improving warehouse management.

Let's delve into how advanced warehouse management in D365 offers a cutting-edge, integrated solution to confront the urgent challenges warehouses face today.

Current Challenges in Warehouse Operations

Lack of Inventory Visibility and Control:

Inaccurate or Outdated Inventory Data:

This occurs when the inventory records don't match the actual stock available. For instance, a retail company might display an item as available online, but due to discrepancies in inventory records, it's actually out of stock, leading to customer dissatisfaction.

Limited Real-time Visibility:

When warehouses lack real-time tracking systems, it becomes hard to know the exact location of products. For instance, without real-time tracking, it's challenging to find specific items quickly, causing delays in order fulfillment.

Blind Spots in Inventory Location:

In large warehouses, certain areas might not be covered by tracking systems. For instance, shelves in the far corners might not have adequate visibility, resulting in difficulties in finding items stored there.

Inefficient Picking Processes:

If picking processes are manual or disorganized, it leads to inefficiencies. For instance, without a streamlined picking process, employees might take longer to gather items for orders, impacting overall productivity.

Workflow and Process Based Challenges:

Paper-based Workflows:

Using manual paper-based systems for inventory management and order processing can slow down operations. For instance, handwritten records might be prone to errors and are time-consuming to update.

Limited Automation:

When crucial processes aren't automated, it hampers efficiency. For example, without automated inventory updates, warehouses might struggle to maintain accurate stock levels in real time.

Disconnected Processes:

When different stages of the warehouse operations aren't integrated, it leads to inefficiencies. For instance, if order processing is disconnected from inventory management, it might lead to overselling items.

Lack of Visibility into Order Fulfillment:

Without proper systems, it becomes challenging to track the status of orders. For instance, if there's no order tracking system, it's difficult to inform customers about their order status accurately.

Scalability and Adaptability Challenges:

Inflexible Infrastructure:

Outdated or rigid systems hinder the ability to adapt to changing demands. For instance, if a warehouse management system lacks flexibility, it might struggle to accommodate new products or workflows efficiently.

Costly Upgrades and Maintenance:

Legacy systems often require expensive upgrades and maintenance. For example, outdated software might need extensive customization or hardware updates, incurring high costs.

Limited Integration with New Technologies:

When warehouse systems can't integrate with newer technologies, it leads to inefficiencies. For instance, if an older inventory system can't connect with modern tracking tools, it limits real-time visibility into stock levels.

Inability to Handle Seasonal Fluctuations:

Warehouses face challenges during peak seasons. For example, if a warehouse can't efficiently handle the sudden increase in orders during holidays, it might lead to delays and operational bottlenecks.

Labor Management and Productivity Issues:

High Error Rates:

Manual processes often result in higher error rates. For instance, manual data entry can lead to mistakes in inventory records, causing discrepancies in stock levels.

Low Employee Morale:

Inefficient processes or lack of proper training can demotivate employees. For example, if workers have to handle cumbersome manual tasks without proper training, it can lead to dissatisfaction and reduced productivity.

Inefficient Training:

Lack of effective training programs affects performance. For instance, if employees aren't trained adequately on new technologies, they might not use them efficiently, impacting overall productivity.

Limited Visibility into Employee Performance:

Without proper tracking systems, it's challenging to gauge employee productivity accurately. For example, without performance metrics, it's hard to identify and reward high-performing individuals.

Financial and Cost Concerns:

High Inventory Carrying Costs:

Excessive inventory levels tie up capital and storage space. For example, if a warehouse holds excess stock due to inaccurate demand forecasting, it incurs higher carrying costs.

Lost Sales Due to Stockouts:

Inaccurate inventory management leads to stockouts. For instance, if a popular item runs out of stock due to inaccurate inventory records, it results in lost sales opportunities.

Hidden Costs of Manual Processes:

Manual workflows often hide operational costs. For instance, the time spent on manual data entry or inventory checks may not be accounted for, affecting cost analysis.

Limited Visibility into Warehouse Costs:

Without proper cost-tracking mechanisms, it’s hard to identify and optimize expenses. For example, without detailed cost breakdowns, it’s challenging to pinpoint areas for cost-saving measures.

Explore the transformative impact of Dynamics 365 Intelligent Order Management on elevating supply chain agility. Uncover how this intelligent system revolutionizes supply chain dynamics.

Top Features of Dynamics 365 Advanced Warehouse Management

Before you dive deep, let’s do a quick overview of advanced warehouse management in 365:

1. Strategic Location Management

Within AWM, users can define location directives that specify how items should be stored in the warehouse. For example, a company can set up a directive using the "Free location near fixed location" strategy to automatically select storage locations close to a fixed point for similar items. This minimizes travel time for picking and replenishment.

2. Dynamic Replenishment

The system allows for setting up dynamic replenishment strategies to ensure that high-demand items are always available. Using "Free location without incoming work" strategy, AWM automatically identifies and assigns replenishment tasks to locations with sufficient space and no incoming assignments.

In a retail warehouse, the system could automatically generate replenishment tasks for popular products to be moved from bulk storage to pick locations overnight, ensuring availability for order picking the next day.

3. Customizable Dashboards

AWM provides customizable dashboards that offer real-time visibility into various warehouse operations. Users can create dashboards with multiple columns to monitor activities like picking, packing, and shipping.

A warehouse manager could set up a dashboard to monitor outbound activities, including orders ready to be picked, in packing, and pending shipment, enabling quick adjustments to meet daily shipping targets.

4. Work Class and Labor Management

With AWM, warehouses can define work classes to categorize different types of work and apply labor standards to estimate and optimize labor costs.

A warehouse could categorize work into picking, packing, and cycle counting classes. By applying labor standards, such as estimated times for cycle counting, the system can compare estimated versus actual times, identifying areas for productivity improvements.

5. Optimized Picking Processes

The optimize Route wave process method in AWM ensures that picking routes are optimized, minimizing travel distance and time.

For a large order consisting of items spread across the warehouse, the system calculates the shortest picking route, potentially combining Largest Gap and Aisle by Aisle heuristics, saving time and reducing worker fatigue.

6. Dangerous Goods Management

AWM supports detailed setup for handling dangerous goods, ensuring safety and compliance.

For a chemical distributor, the system can manage dangerous goods by ensuring that items are stored and handled according to their UN number, packing group, and hazard class, including generating appropriate shipping labels.

7. Mobile Device Integration

Mobile device capabilities in AWM enable warehouse workers to access real-time information and perform tasks efficiently.

Workers can receive picking instructions directly on their mobile devices, with the system guiding them through the optimized route and ensuring that the correct items are picked through barcode scanning.

8. Advanced Packing and Shipping

Advanced Warehouse Management in D365 supports advanced packing strategies and shipping carrier integration, streamlining the packing and shipping process.

At the packing station, workers can scan items into containers, with the system automatically generating shipping labels based on predefined packing profiles and carrier requirements.

9. Streamlined Cycle Counting

Cycle counting is a periodic inventory auditing process where a subset of inventory, in specific locations, is counted on a designated day. It streamlines cycle counting by enabling customized count plans for different warehouse areas, such as ground-level and high-rack storage. This customization allows for precise inventory audits by designating specific Work Class IDs to each area. For example, counts in easily accessible ground-level areas can be assigned to staff without the need for special equipment, while counts in high-rack areas are assigned to those qualified to operate forklifts or reach trucks.

The separation of cycle count plans by storage type not only ensures the accuracy and efficiency of inventory audits but also enhances safety by ensuring tasks are performed by appropriately equipped and trained personnel.

Solve Your Supply Chain Challenges with D365 Advanced Warehouse Management

Benefits of D365 Advanced Warehouse Management

Now let’s dive deeper into some of the benefits of Dynamics 365 advanced warehouse management that will help you understand how Dynamics 365 implementation will augment your warehousing benefits.

Offers a Centralized Repository for Data Storing

D365 advanced warehouse management offers a centralized platform where the retail chain can access real-time data on inventory levels across all its stores.

For instance, let's say this retail chain has several outlets spread across different regions. With Dynamics 365, the chain's managers or inventory controllers can log into the system and instantly view the inventory levels of specific products in each store. They can track how many units of a particular item are available at each location, all in real time.

Now this means that when the data shows that a specific store is running low on a popular product, the inventory manager can quickly take action. They can initiate restocking orders or redistribute inventory from stores with excess stock to meet the demand in the deficient store. This prevents overstocking in some outlets and avoids stockouts in others, ensuring that customers can consistently find the products they want across the chain's various locations.

Provides Real-time insights & Predictive Analytics

Imagine a manufacturing company integrating Dynamics 365 into its operations. This software uses data and advanced analytics to predict demand accurately. By analyzing historical sales data and market trends, it helps the company foresee how much of each product it will need.

This insight ensures they produce the right amount at the right time, avoiding situations of having too much or too little stock. This integration also prevents stockouts and reduces extra inventory. With precise forecasts, the company avoids missed sales opportunities and cuts down on storage costs. Plus, Dynamics 365 provides real-time updates, allowing quick adjustments if there's suddenly a surge in demand. This flexibility helps the company adapt swiftly, making processes more efficient and reducing waste. Ultimately, Dynamics 365 makes it easier for manufacturing companies to make smart decisions, produce goods accurately, and stay agile in responding to changes in the market.

Ensures Better Visualization with Power BI

When Dynamics 365 teams up with Power BI, it revolutionizes supply chain insights by offering customizable dashboards and reports. This amalgamation provides real-time visibility, crucial in understanding market fluctuations and mitigating risks.

For instance, it helps gauge demand volatility swiftly, enabling agile responses to changing market dynamics. Additionally, Power BI's advanced analytics capabilities identify potential risks within the supply chain, offering insights into supplier disruptions and ensuring contractual adherence.

Discover the robust capabilities of Microsoft Power BI, explore valuable insights into its implementation, and find answers to frequently asked questions.

Facilitates Automated Workflows for Production and Manufacturing

Dynamics 365 streamlines production processes by offering specialized tools for production planning and capacity management. Through this software, an electronics manufacturer gains a comprehensive view of production workflows, enabling optimized schedules and resource allocation. Leveraging historical data and predictive analytics within Dynamics 365, the manufacturer fine-tunes production timelines, reducing lead times significantly. With capacity management tools, the software intelligently allocates resources, ensuring optimal utilization of machinery and labor. This enables the company to proactively identify bottlenecks, adjust production schedules swiftly, and maintain an efficient workflow.

Better Supplier Management

Through Dynamics 365, organizations efficiently onboard, organize, and manage their network of suppliers. The platform offers tools to track supplier performance, manage contracts, and streamline procurement processes.

It provides real-time visibility into supplier activities, such as order status, deliveries, and inventory levels. This enables timely decision-making and allows companies to address any discrepancies or delays promptly.

Moreover, with robust features for analytics and reporting, Dynamics 365 assists in identifying cost-saving opportunities. Organizations can negotiate better terms with suppliers, ensuring competitive pricing and favorable delivery schedules.

Also, Dynamics 365 helps in enforcing compliance with industry standards and regulations. It ensures that suppliers meet quality benchmarks and adhere to legal requirements, fostering transparency and reliability.

Explore how Microsoft Dynamics 365 for Retail resolves six critical challenges faced by the retail industry, enhancing efficiency and driving growth.

D365 Warehouse Management: Key Distinctions Over Other Warehouse Management Systems

Deep ERP Integration:

Seamless Ecosystem: Part of Dynamics 365, ensuring integrated operations across finance, sales, purchasing, etc., without the complex integrations required by standalone WMS.
Unified Platform: Offers a single platform for ERP and CRM, eliminating the need for disparate systems.

Advanced Functionality:

Comprehensive Features: Supports real-time inventory tracking, high-volume processing, and advanced picking strategies like wave picking and cluster picking.
Flexibility and Scalability: Customizable for businesses of all sizes, adaptable to changing needs with tailored workflows and replenishment strategies.

Enhanced Efficiency and Accuracy:

Optimized Operations: Utilizes machine learning for demand forecasting and route optimization to reduce waste and operational costs.
Improved Inventory Management: Provides detailed control with cycle counting and real-time stock visibility, improving accuracy and reducing stock issues.

Regulatory Compliance and Safety:

Safety and Compliance: Manages dangerous goods with built-in support for safety regulations, and ensures tasks are assigned based on qualifications.

Integration with Automation and IoT:

Technology Integration: Designed to work with automated systems and IoT for smart operations, supporting robots and automated conveyors.

Global Capabilities:

Multi-Site and Multi-Language: Supports global operations with capabilities for managing multiple warehouses and languages, ideal for multinational organizations.

Let’s Wrap-Up

Transform your warehouse operations from chaos to control with the power of Dynamics 365 Advanced Warehouse Management. At Nalashaa Digital, we specialize in Dynamics 365 implementation, integration, and consultancy, offering a comprehensive suite of solutions to optimize your warehouse management. Dynamics 365 Supply Chain Management offers a robust set of capabilities, empowering businesses with real-time visibility, agile planning, and advanced insights. Get in touch with us today to unlock the full potential of Dynamics 365 for your supply chain needs.

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