Editor:
Denis Conway

Introduction:

The Microsoft Ignite 2023 conference has been a showcase of ground breaking AI advancements, offering a wealth of opportunities for the enhancement of ERP (Enterprise Resource Planning) solutions. These technological strides are more than just innovations; they are pathways to augment the functionality, efficiency, and user experience of ERP systems.

Top 10 Insights and Opportunities for ERP Applications:

This blog explores how the top 10 key insights from Ignite 2023 can be leveraged to enhance ERP products, benefit their users, assist ISVs (Independent Software Vendors) in developing custom solutions, and support the core business users of these ERP systems.

1. Revolutionizing Productivity with Copilot in Microsoft 365:

Microsoft 365 Copilot:

This innovation is a testament to Microsoft’s commitment to enhancing workplace efficiency and creativity. Its integration across applications like Outlook, Excel, and Teams exemplifies Microsoft’s vision for a seamlessly interconnected work environment.

Opportunity for ERP: 

Incorporating ERP-focused Copilot plugins into M365 applications can revolutionize ERP workflows through the automation of routine tasks and the provision of intelligent insights from the ERP system for decision-making within the productivity suite. Such integration is poised to significantly boost time efficiency and improve accuracy for ERP system users.

2. Extending Copilot’s Reach:

Diverse Integration:

Expanding Copilot to aid in the completion of tasks across diverse roles and functions, such as business processes and IT administration represents a strategic initiative to integrate AI thoroughly into all facets of work.

Opportunity:

Expanding Copilot into ERP systems can provide tailored assistance in various ERP areas like financial planning, supply chain management, operations, human resources, commerce etc. offering a more intuitive and guided user experience.

3. Strategic Enhancements:

Bing Chat Enterprise Transition:

The transformation of Bing Chat into Copilot (copilot.microsoft.com) offers an opportunity for ERP systems to utilize enhanced external signals for improved demand planning, supply chain risk management, and support functions.

Copilot Studio:

This tool can be utilized by ISVs and ERP developers, enabling them to craft tailored AI solutions that integrate flawlessly with core ERP systems, thereby improving functionality and user experience. It also offers administrative capabilities to refine core ERP Copilot skills with additional grounding, topics, and more.

4. Data and AI Synergy with Microsoft Fabric:

Unified Data Handling:

Integrating Microsoft Fabric with AI tools and making this GA (Generally Available) is a significant step towards enhancing data-driven decision-making.

Opportunity:

Microsoft Fabric’s integration can enhance data-driven decision-making in ERP systems. It can unify data from various sources, providing a more comprehensive view for analytics and reporting within ERP systems.

5. Advancements in Azure AI platform:

Model-as-a-Service:

Simplifies the integration and customization of AI models, marking a significant advancement in AI application development.

New AI Models:

Introduction of GPT-3.5 Turbo, GPT-4 Turbo, and DALL·E 3 revolutionizes AI application development.

Opportunity:

The integration of advanced AI models like GPT-3.5 Turbo and GPT-4 Turbo into ERP systems can enable more sophisticated data analysis using tools like advance data analytics, code interpreter and predictive modeling, aiding in strategic business planning and forecasting.

6. Enhanced Cloud Infrastructure and NVIDIA Collaboration:

Azure Maia and Cobalt Chips & Azure Boost: 

These advancements supercharge AI workloads and improve storage and networking, enhancing ERP system efficiency and scalability.

NVIDIA AI Foundry Service: 

This partnership boosts AI model development, leveraging NVIDIA’s tools with Azure’s infrastructure.

Opportunity: 

These innovations enable faster processing and robust AI capabilities in ERP solutions, facilitating advanced analytics and decision-making.

7. Ethical AI Deployment:

Responsible AI Initiatives:

Emphasizing ethical use with initiatives like the Copilot Copyright Commitment and Azure AI Content Safety.

Opportunity:

The focus on responsible AI use ensures that ERP solutions remain compliant with legal standards and ethical guidelines, building trust among users and stakeholders.

8. AI Integration in Windows Experiences:

Windows 11 AI Tools:

Aiming to make AI more accessible and position Windows as the prime platform for AI development.

Opportunity:

Enhanced AI tools in Windows can improve the accessibility and usability of ERP solutions, offering a more seamless and integrated experience across devices and platforms.

9. Enhanced AI-Driven Security Solutions:

Microsoft Sentinel and Microsoft Defender XDR Integration:

Creates a unified security operations platform, enhancing threat protection.

Opportunity:

The integration of advanced security solutions can bolster the security of ERP systems, protecting sensitive business data and ensuring compliance with industry standards.

10. AI Skill Development and Credentials:

Microsoft Applied Skills Credentials:

Covering various aspects of AI, these credentials are crucial for validating expertise in this rapidly evolving field.

Opportunity:

Providing training and credentials in AI can empower ERP professionals to leverage AI capabilities effectively within Dynamics 365, enhancing the overall value and utility of ERP solutions.

Explore Further:

For a deeper dive into how these technologies are being applied, check out my other blog on the practical use of Copilot in Dynamics 365 AI ERP applications. Microsoft Copilot brings generative help and guidance into Dynamics 365

Conclusion:

Microsoft Ignite 2023 has opened a new chapter in the evolution of ERP applications, with AI at its core. By embracing these AI advancements, ERP solutions can be significantly enhanced, redefining how businesses leverage these systems for strategic and operational excellence.

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Learn More

Interested in learning more about Copilot’s in-app help guidance? Here are your next steps:

Read the Copilot Product Documentation:

For comprehensive and detailed information about Copilot’s capabilities and functionalities, be sure to check out our product documentation. You’ll find in-depth insights into how Copilot can enhance your experience with Dynamics365 Supply Chain Management –

Read the Responsible AI FAQ for Copilot and its capability of generative help and guidance.

Experience Copilot in action (For Existing Dynamics 365 Supply Chain Management Customers):

 If you’re already using Dynamics 365 Supply Chain Management, you can enable and experience Copilot’s capabilities to streamline your operations. Here’s how:

• Step 1: Enable Copilot Feature: Follow our documentation for existing customers to learn how to enable this feature. Once enabled, you’ll have access to Copilot’s powerful in-app help guidance within Dynamics 365 Supply Chain Management.
• Step 2: Access Copilot – Locate the Copilot icon at the top of your screen within Dynamics 365 Supply Chain Management, then click on it to open the conversational sidecar experience. Copilot will introduce itself and encourage you to ask questions.
• Step 3: Pose Your Question – In any uncommon or challenging task within the application, simply ask Copilot for guidance. For better results, especially when seeking documentation-related in-app help, consider starting your questions with ‘How.’
• Step 4: Instant Guidance – Copilot will provide you with step-by-step guidance; all responses are grounded by our public documentation.

Please note that Copilot’s capabilities are exclusively available to existing Dynamics 365 Supply Chain Management customers. If you’re one of them, don’t miss out on the opportunity to enhance your user experience and streamline your operations with Copilot.

Join Copilot for finance and operations apps – Yammer

Stay informed about the most recent Copilot by becoming a member of our Copilot for finance and operations Yammer Group  . Share your Feedback and be the first to know about the latest enhancements.

The post Microsoft Ignite 2023 Insights & Opportunities for ERP applications. appeared first on Microsoft Dynamics 365 Blog.

Introduction:

In the ever-changing landscape of contemporary business, effective supply chain management is paramount. Central to this complex system is the critical process of demand planning and forecasting, which profoundly impacts a company’s capacity to fulfil customer requirements, optimize inventory, and maintain a competitive edge. This article explores the significance of demand forecasting and how Microsoft seamlessly incorporates it into its new demand planning in Dynamics 365 Supply Chain Management.

The Crucial Role of Demand Planning and Forecasting:

Precise demand planning and forecasting play a pivotal role in diverse facets of business operations, yielding advantages throughout the entire supply chain:

1. Accurate Inventory Management: Precise demand forecasting optimizes inventory levels, finding the balance between excess stock and stockouts.
2. Customer Satisfaction: Accurate forecasting ensures products are available in the right place at the right time, enhancing customer satisfaction and brand loyalty.
3. Cost Reduction: Effective demand forecasting minimizes holding costs for excess inventory and reduces costs associated with stockouts.
4. Resource Allocation: Anticipating demand aids in efficiently allocating resources, including labor, production capacity, and raw materials.
5. Improved Collaboration: Accurate forecasting fosters collaboration across the supply chain, enhancing coordination between suppliers, manufacturers, and retailers.
6. Long-term Planning: Strategic planning benefits from accurate forecasting, aiding businesses in adapting to changing market conditions and trends.
7. Competitive Advantage: Organizations responding effectively to market changes gain a competitive edge.

Exploring a Range of Demand Forecasting Models:

Below is a concise examination of diverse forecasting models employed in general Supply Chain demand planning, accompanied by insights into their potential applications within a business context.

1. Qualitative Forecasting:
   • Delphi Method: In the tech industry, when forecasting the demand for a new product, experts from different fields like engineering, marketing, and finance may anonymously provide input through multiple rounds of questionnaires.
   • Market Research: A smartphone company might conduct extensive market research, including customer surveys and competitor analysis, to forecast demand for its next flagship device.
2. Time Series Analysis:
   • Prophet: In the retail sector, employ Prophet time series analysis for precise demand forecasting, enabling efficient inventory management, minimizing stockouts, and maximizing profitability.
   • Exponential Smoothing: A fashion retailer might use exponential smoothing to predict future sales based on the recent trend in sales for specific clothing items.
   • ARIMA: A beverage company could apply ARIMA models to forecast demand for a seasonal drinks during holidays.
   • Best Fit: In healthcare, ‘Best Fit’ involves selecting the optimum statistical model to capture dataset patterns. Applying best-fit time series analysis anticipates patient needs, optimizes resource management, and enhances operational effectiveness for improved outcomes and satisfaction.”
   • ETS (Error-Trend-Seasonality): Hospitality and Tourism, utilize ETS models to forecast hotel bookings and tourism trends, enabling businesses to optimize pricing strategies and allocate resources efficiently based on seasonal fluctuations.
3. Causal Models:
   • Regression Analysis: An automobile manufacturer might use regression analysis to predict the impact of advertising spending on the demand for a particular car model.
   • Econometric Models: In the energy sector, econometric models could be employed to forecast electricity demand based on economic indicators such as GDP and population growth.
4. Machine Learning Models:
   • Neural Networks: An e-commerce platform might use neural networks to predict customer demand for various products by considering factors like browsing history, purchase patterns, and customer demographics.
   • Random Forest: A retail chain could employ a random forest model to forecast the demand for different product categories based on historical sales data and external factors like economic trends.
5. Judgmental Forecasting:
   • Expert Input: In the pharmaceutical industry, stakeholders may provide expert opinions to forecast the demand for a new medication, considering factors like regulatory approval, market acceptance, and healthcare trends.

These forecasting models offer diverse approaches, catering to various industries and scenarios.

Demand forecasting in Dynamics 365 Supply Chain Management

In the context of demand planning in Dynamics 365 Supply Chain Management, the efficiency of demand forecasting is bolstered by a robust suite of features. The system taps into the potential of built-in out-of-the-box AI-powered algorithms, integrates existing models, utilizes the capabilities of Custom Azure Machine Learning (AML), advanced forecasting models, forecasting profiles, and streamlined data hierarchy management to enhance the precision of demand planning. Through the seamless integration of these elements, the platform guarantees the accuracy of demand forecasts, facilitates the smooth identification and handling of outliers, and adeptly oversees various facets of the supply chain.

Built-in AI Algorithms:

Access to pre-configured and out-of-the-box AI-based models like Arima Prophet, ETS, and outlier removal without the need for additional configuration provides users with a powerful and user-friendly forecasting solution. This feature enables businesses to quickly leverage advanced forecasting techniques, enhancing the accuracy of predictions.

Advanced Forecasting Models:

The platform supports advanced forecasting methods such as ARIMA, ETS (Error-Trend-Seasonality), Prophet, and Best fit, ensuring a high degree of accuracy in demand forecasts. Leveraging the capabilities of custom Azure Machine Learning (AML), this flexibility empowers businesses to customize their forecasting strategies based on the distinct characteristics of their products and the dynamics of their market.

Use your own Forecast Models

If you’ve created your own forecasting models or utilize Azure Machine Learning within Dynamics 365 Supply Chain Management, you can leverage the collaborative editing features within the app to directly invoke your custom models. This allows you to seamlessly integrate your pre-built models alongside the out-of-the-box models provided, tailoring your forecast for optimal accuracy.

Forecasting Profiles:

Users can craft and manage forecasting profiles, streamlining calculations and facilitating the application of outlier removal techniques. This feature adds a layer of customization to the forecasting process, allowing organizations to adapt to specific business requirements and scenarios.

Outlier Detection and Removal/Handiling:

Detecting outliers in demand planning is a vital component of forecasting and supply chain management. The identification of outliers plays a key role in enhancing the precision of demand forecasts and ensuring the appropriate handling of anomalies. This process is streamlined through the intuitive Outlier Detection capabilities embedded in demand planning within Dynamics Supply Chain Management.Detecting and eliminating outliers is a pivotal stage in data preprocessing, essential for enhancing the accuracy and dependability of statistical analyses and machine learning models. Employ advanced methods, particularly the Interquartile Range (IQR) and Seasonal-Trend Decomposition using LOESS (STL), to skillfully pinpoint and preemptively manage outliers. This strategic approach contributes to improved precision and effectiveness in data analysis.

Outlier Removal/Handling Techniques:

• Leverage sophisticated approaches, notably the Interquartile Range (IQR) and Seasonal-Trend Decomposition using LOESS (STL), to adeptly identify and proactively address outliers for enhanced precision and effectiveness in data analysis.

Data Hierarchy Management:

Efficient data hierarchy management is crucial for granular forecasting and optimizing supply chain operations. Demand planning in Microsoft Dynamics 365 Supply Chain Management provides comprehensive hierarchy management across products, locations, and time:

• Product Hierarchy: A retail electronics company organizes its product catalog with a hierarchical structure, starting broadly with categories like smartphones and laptops and becoming more granular with specific brands and models. This detailed hierarchy enables the company to forecast demand patterns at a specific product level, enhancing inventory management.

• Location Hierarchy: The company optimizes distribution based on a location hierarchy that spans global, regional, and local levels. Understanding variations in demand by region helps in strategic decision-making for supply chain management, ensuring efficient allocation of inventory to meet the unique demands of each location.

• Time Hierarchy: Capturing seasonality and trends through time hierarchy management, the company analyzes daily, weekly, monthly, and yearly variations in demand. This temporal sensitivity enhances the accuracy of predictions, allowing the business to adjust inventory levels and marketing strategies to meet fluctuating consumer preferences throughout the year.

Enhanced Integration with data:

Demand planning in Dynamics 365 Supply Chain Management seamlessly integrates your data, further enhancing the capabilities of the demand forecasting solution:

Virtual Entities:

The platform supports the extension or creation of custom entities within Microsoft Finance and Operations, enabling integration with additional data sources. This flexibility ensures that businesses can incorporate diverse datasets into their demand forecasting models.

Finance and Operations Integration:

The smooth export of planned data back into Microsoft Finance and Operations marks the culmination of the supply chain planning cycle. This closed-loop integration guarantees that the generated demand forecasts are directly incorporated into the broader finance and operations context, promoting consistency and accuracy throughout the organization. Users have the flexibility to plan across various instances of Dynamics 365 Finance and Operations at a higher level and selectively export specific parts of the plan to designated locations.

Azure Data Explorer (ADX):

Efficient data storage, aggregation, and disaggregation in Azure Data Explorer optimize performance. This integration allows businesses to harness the power of Azure’s data capabilities for more robust forecasting and analytics.

Conclusion:

Microsoft Dynamics 365 Supply Chain Management’s demand planning feature provides a comprehensive solution for demand forecasting. This solution incorporates outlier detection, advanced forecasting models, seasonality analysis, and robust scenario planning capabilities. The integrated approach enables businesses to make well-informed decisions, adapt to changing conditions, and maintain a competitive edge in a dynamic market environment. Demand planning and forecasting are crucial aspects of effective supply chain management, enhancing agility, responsiveness, and competitiveness in today’s dynamic marketplace.

The article explores various forecasting models and demonstrates their real-world applications. Dynamics 365’s features, such as built-in AI algorithms, advanced forecasting models, forecasting profiles, outlier detection, and data hierarchy management, are highlighted as key elements that improve accuracy.

Additionally, the platform’s integration capabilities with Azure Data Explorer and Dynamics 365 Supply Chain Management are emphasized, creating a closed-loop system that optimizes forecasting accuracy and extends its impact across the organization.

To navigate the complexities of supply chain management, businesses can strategically leverage Dynamics 365 Supply Chain Management. This proactive approach allows them to adapt to future challenges, gain a competitive edge, and foster sustained success in the ever-evolving landscape of modern business.

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Learn More

Access the demand planning solution, Documentation, and Workshop:

To access the demand planning Application and learn more about its features, follow the provided links. Additionally, don’t miss the upcoming demand planning workshop in Denmark to dive deeper into this transformative tool.

Access the demand planning in Dynamics 365 Supply Chain Management:

To install the latest version of the demand planning application, ensure that you are using Dynamics 365 Supply Chain Management, and then visit the Power Platform Admin Center. Search for the Dynamics 365 demand planning Application and follow the installation process.

Click here to access: Demand planning in Dynamics 365 Supply Chain Management

https://aka.ms/DemandPlanningApp

Demand planning Documentation:

If you’re interested in learning more about our demand planning Application, we’ve prepared an extensive collection of highly informative documents for your review and easy access.

You can find them right here: Demand planning Documentation

Demand planning – Demonstration Videos:

We’ve taken extra steps to create a series of informative demo videos that will not only guide you through the application but also showcase a multitude of features available in the demand planning Application.

Demand Planning Insights Videos:

• Importing Data:
• Creating Forecasts:
• Planner viewing and working with Forecasts

Meet the Team: Onsite Workshop December 2023

The forthcoming demand planning Workshop, to be held at Microsoft’s facility in Lyngby, Denmark, is geared towards introducing the new demand planning application to both Customers and Partners. Furthermore, it will provide an in-depth exploration of the product’s features and capabilities.

The workshop will also cover various important topics, including:

• Exploring the contents of the Public Preview October 21st and December update.
• Engaging hands-on lab activities.
• Participating in a user experience (UX) study or exercise.
• Understanding how these developments align with the broader context of Supply Chain Planning.
• An overview of Copilot for demand planning.
• Customer insights and feedback.

Please note that a more detailed agenda will be provided to attendees as the workshop date approaches.

Date: 4th+ 5th December 2023

Duration: 2 days

Location: Lyngby, Denmark

Register here

Demand Planning Community – Yammer

Join our Yammer group to stay updated with monthly evaluations, scripts, and videos related to the demand Planning Application. Your journey to supply chain transformation begins here.

Preview Early Access – Demand Planning Application

The post Transforming Supply Chains: Exploring Advanced AI-Powered Demand Forecasting and Demand Planning in Dynamics 365 Supply Chain Management appeared first on Microsoft Dynamics 365 Blog.