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How Food and Beverage Manufacturers Can Combat Supply Chain Challenges with Microsoft Dynamics 365

by Sean Sennott
US Microsoft Dynamics 365 Head of Architects, Columbus Global

Food and beverage manufacturers need to be resilient in the face of supply chain issues. From natural disasters and global trade issues to cybersecurity risks, power outages and unexpected raw material shortages, the food and beverage industry has been hit hard with scenarios that require quick thinking, backup plans and agility. 

Research from Resilinc found that supply chain disruptions caused by shortages were up 638% in the first six months of 2021.

Manufacturers are being hit from all sides: the cost of shipping containers, shortages in products and materials, raw material costs, truck driver shortages, worker shortages, and so on. For example, the cost of shipping containers has more than doubled, according to Forbes.

The cost of these supply chain challenges can quickly add up. According to a survey by Interos, 94% of respondents had experienced a negative impact to revenue due to supply chain disruptions.

The Institute for Supply Management surveyed the manufacturing sector and found a backlog of orders index at 70.6% in May, a historic high. In September, the ISM backlog index remained high at 64.8%, which while better, is still an indication of growing backlogs.

Food and beverage manufacturers can improve resilience in the face of these market risks by developing a fail-safe distribution requirement plan to guide them in adapting quickly to unexpected disruptions.

A distribution requirement planning process:

  • Optimizes workflow to products from point A to point B efficiently and on time.
  • Assists in setting accurate delivery dates.
  • Minimizes shortages or overstock.
  • Reduces transportation costs by optimizing inbound and outbound shipments.

To facilitate the development of a more comprehensive distribution requirements planning process, manufacturers are turning to technology, such as Microsoft Dynamics 365 Supply Chain Management. Let's look at some of the specific ways Dynamics 365 Supply Chain Management can play a role in operationalizing a distribution requirements plan.

Optimize the useful life of ingredients.

If your organization wants to both minimize the time raw materials spend in the supply chain and improve adherence to storage requirements including climate-controlled, refrigerated, humidity-controlled or frozen environments. By conducting inventory management and shelf-life tracking through Dynamics 365, you’ll be alerted to rotate inventory so you know what to use next to minimize spoilage, so you reduce waste.

Stay ahead of unexpected scenarios.

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About Sean Sennott

Sean Sennott is US Microsoft Dynamics 365 Head of Architects with 12 years’ experience with Dynamics AX 2012/D365. He has implemented Microsoft Solutions for many multi-national companies in manufacturing, sales and distribution.

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