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Dynamics 365 Community / Forums / Supply chain | Supply Chain Management, Commerce / Seeking Guidance on De...
Supply chain | Supply Chain Management, Commerce
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Seeking Guidance on Demand and Supply Forecasting in Dynamics 365 Finance & Operations (D365 F&O)

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Posted on by HJ-06101750-0 17
Hello everyone,
I'm currently working on a project where we aim to replace our Excel-based demand forecasting process with a solution within Dynamics 365 Finance & Operations (D365 F&O). We have three warehouses across the US, with plans to expand to a fourth one, and deal with around 3000 product SKUs. Our parts are ordered monthly from suppliers based in India and China, with lead times of approximately 4 months (2 months to make parts ready, 2 months in transit).

For demand forecasting, we've been using a formula in Excel: Round(Median(Range)/2,0)*1.1, which takes into account historical sales data, current inventory levels, and pending purchase orders to predict future demand. We're looking to implement this formula or a similar approach within D365 F&O.

Additionally, we're also seeking guidance on supply forecasting, particularly in terms of assessing vendor capacity, lead times, and production capabilities to ensure our inventory levels meet anticipated demand.

Could anyone familiar with Dynamics 365 Finance & Operations provide insights or best practices on how we can achieve both demand and supply forecasting scenarios within the system? Any recommendations on modules, functionalities, or customizations that we should consider would be greatly appreciated.
Thank you in advance for your assistance!
  • Suggested answer
    Nigel J Cox Profile Picture
    Nigel J Cox 40 on at
    Seeking Guidance on Demand and Supply Forecasting in Dynamics 365 Finance & Operations (D365 F&O)
    Responses from Dogan and Hana are both good.
     
    Make sure you are looking at the new Demand Planning App (Dogan's link takes you there, but it looks like Hana's is taking you to the legacy Demand Forecasting solution).
     
    I'd like to emphasize what both Dogan and Hana said about Supply Forecasting. Master planning CALCULATES a supply plan based on Product demand, BOMs, lead times, routes, desired safety stocks, etc. In that sense it is a plan based on forecasted Product demand and Sales backlog rather than a Supply forecast. There is no statistical analysis/processing in Master Planning/MRP (a good thing!). There is such a thing as a Supply Forecast in D365, but I doubt it is what you seek - it has several possible uses, but it's mostly there for when a Supplier says what they CAN supply (typically a max limit), regardless of your planned needs.

    Great that you are looking at software options in D365, but I recommend adding Master Planning Concepts education, especially for your planners, schedulers and buyers. There are some excellent texts available. I really like those authored by Proud, Vollman, Orlicky and Plossl, but there are many others, often more recent - search for Master Planning, Supply Chain Planning, Master Scheduling or MRP. I am confident you will find value in any one of these books . . .
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    Dogan Adiyaman Profile Picture
    Dogan Adiyaman 688 User Group Leader on at
    Seeking Guidance on Demand and Supply Forecasting in Dynamics 365 Finance & Operations (D365 F&O)
    Hi there,
     
    I suggest you to take a look at here for demand forecasting: https://dynamics365clouderp.blogspot.com/2022/10/demand-forecasting-with-azure-machine.html
     
    Regarding supply forecasting, all you can do is to enter already forecasted lines in to D365FO. System really doesn't do supply forecasting, there is no prediction for the sourcing. The parameters like capacities, lead times, min stocks, delivery calendars, etc. are managed in the planning optimization (aka master planning).
     
  • Suggested answer
    Hana Xue Profile Picture
    Hana Xue Microsoft Employee on at
    Seeking Guidance on Demand and Supply Forecasting in Dynamics 365 Finance & Operations (D365 F&O)
    Hi,
    To implement a similar approach to the specific formula you provided, you could try to customize the statistical forecasting algorithm considering the "Demand Forecast Model" feature.https://learn.microsoft.com/en-us/dynamics365/supply-chain/master-planning/demand-forecasting-setup#model-parameters
    The Master Planning module in D365 F&O is designed to handle supply forecasting and planning. Master plans overview - Supply Chain Management | Dynamics 365 | Microsoft Learn It determines the planning of products and purchase orders based on demand forecasts. This includes consideration of lead times, production capacity and other constraints. Since each business may have unique requirements, you may also seek third-party customization.
    Best Regards,
    Hana

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