Why Executives should consider a migration to Dynamics 365 for Finance and Supply Chain Management

Posted on: August 27, 2020 | By: Craig Thompson | Uncategorized, Microsoft Dynamics AX/365

Bottomline, an up-to-date ERP system will boost the performance of your company’s success. Cloud-based ERP systems like Microsoft Dynamics 365 for Finance and Supply Chain Management are quickly rising in appeal, as the rich functionality increases workforce efficiency and skyrockets Executive’s access to Key Performance Indicators and other Business Intelligence to make timely and informed decisions.. Improving [Gross] margin visibility, optimizing workforce productivity, and increase material visibility maximize overall efficiency and increase EBITDA. 

In order to further understand how migrating from Microsoft Dynamics AX to Microsoft Dynamics 365 for Finance and Supply Chain Management can be beneficial to a manufacturing company, we have broken down the potential impact using a $50M USD Company as an example below:

 

Direct Labor: With a key performance indicator (KPI) of the Number of shop floor FTEs as % of total FTE cost, the results showed a 6%* reduction in avoided shop floor staffing leading to better planning and efficiency with Microsoft Dynamics 365 for Finance and Supply Chain Management.

Impact = personnel cost * shop floor FTE as % of total * improvement

Inventory Management: Using a key performance indicator of Obsolescence as a % of total inventory, migrating to D365 resulted in a 10%* reduction in excess inventory and shrinkage.

Impact = inventory * obsolescence as percent of total inventory * improvement

On-time accurate delivery: Using a key performance indicator in D365 of Stockout losses, migration patterns in Manufacturing companies resulted in a 3% increase in wholesale sales revenue. Sales staff have better visibility what they can promise, the global profitability of each proposal and ensure that production is aligned with customer orders.

Impact = revenue * gross margin * improvement.

Asset Utilization: Using a key performance indicator of Unplanned machine time –Overall equipment effectiveness, migrating to D365 resulted in a $16K* impact avoiding direct labor and product overhead waste by reducing unplanned machine downtime and/or lack of raw materials.

Impact = COGS * (labor cost as percent of COGS + overhead costs as percent of COGS) * unplanned downtime percent * improvement

 

Warehousing & Transportation: Using key performance indicators Warehousing costs as % of revenue and Transportation costs as % of revenue resulted in optimizing labor and transport related costs.*

Impact = revenue * (warehousing costs as percent of revenue + transportation costs as percent of revenue).

*Source: Forrester: Microsoft Dynamics 365 For Finance And Operations Brings Manufacturers and Retailers To The Cloud, September 2018. *

What’s next?

Logan Consulting can help your organization assess what migration path is the best for you. In some cases there is a direct upgrade path to Dynamics 365 making it more of a technical effort. In other cases it may make sense to use the migration as an opportunity to re-implement the solution either because it wasn’t originally implemented optimally or because your business has evolved over time and no longer fits the existing configuration.

Logan Consulting works to provide quality services in a timely manner. If you feel as though your company may benefit from migrating to Microsoft Dynamics 365 for Finance and Supply Chain Management, please don’t hesitate to reach out using the contact us section of our webpage.

If you have any questions about this service or determining the right migration path for you, please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817.

Logan Consulting is a professional services firm committed to helping businesses improve business processes to get the most from their ERP investments.



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