Recently, I have been working on a presentation to showcase the procurement and sourcing features in Dynamics AX 2012 and it just hit me that apart from the retail module, this is probably the most improved area of the application in recent times. In the following text I just wanted to highlight some of the best features and perhaps inspire you to implement more of these features.
Modelling Your Procurement Organisation
With the organisation modeller you are able to model your procurement organisation and hierarchies in exactly the way you like. Why is this important? Firstly, t it gives you a vehicle for escalating purchase requisition and purchase order approvals. Secondly, it also you gives you a structure to which you can attach procurement policies. This way you are able, in a simple and flexible way, to centralise control over what procurement catalogues people can use, whether they must record a product receipt and a lot of other policy items. In the organisational model you are also able to use effective dates, making it easy to make future organisational changes without affecting day-to-day operations.
Catalogues and Categories
At last, with procurement categories we have freed ourselves from the need to have a product every time we have to buy (or sell) something. Eureka! With the catalogues we are now able to build logical structures allowing people to find the products and services they need when make a purchase.
Purchase agreements are not quite the dog’s what-nots, yet, but at least we now have a place, where we can record supplier contracts and agreements. The agreement itself has very limited capacity for recording contract-meta-data, but at least we are now able to record the fact that we have made a quantitative or monetary (amounts to the same things, I guess) commitment to a supplier. Obviously, you are able to make call-offs from the agreement or from a purchase order.
One of the key areas in procurement is spend control. Making sure that departments and business units stick to their budgets is essential. In Dynamics AX 2012 you are now able to leverage the budget control feature ensuring that you stay within the allowed budget. This also includes the commitment accounting feature. More on this in a future post…
Requisitioning and Employee Self-Service
In larger organisations with centralised procurement being able to raise requisitions is essential. The purchase requisition system and employee-self-service portal have now improved to a level where I think it is very useful. Years ago I helped implement Dynamics AX in an organisation with approximately 20,000 employees and this set of features would have worked nicely. The ability to control procurement catalogues is great and allows a high degree of flexibility.
Being able to import vendor catalogues is a nice feature and the ability to buy from externally hosted vendor catalogues is neat (although I have still to see that one work in real life – maybe someone can enlighten me with a comment on this post…).
The latest R2 feature, Replenishment Request, goes some way toward addressing a weakness in the original concept, namely that you are not able to fulfil a requisition through existing stock – everything is intended to be procured from a supplier. With the Replenishment Request, the requisition is picked up by master planning as a requirement, but it still does not allow you to simply by-pass this procedure and ship directly. Anyway, here is hoping…
Even the purchase manager role centre is quite good, now. The purchasing cube now has approximately 40 KPIs making it quite easy to get an overview of operational performance.
So What is Missing?
In my view, I think Dynamics AX 2012 still has three major shortcomings that I hope Microsoft will address, soon:
- Landed costs, we still do not have sufficient functionality to plan, record and monitor landed costs.
- Transport management, it would be nice to be able to plan and order inbound transportation directly from the procurement module with the ability to generate the necessary EDI and documents.
- It would be beneficial, if master planning was to take into account minimum order size, transport costs and container volume when making purchase order proposals. At least it should be possible to follow the calculations when you group and firm proposals.
RFQs – Do We Really Need Them?
One of the areas that have barely changed since Dynamics AX 2009 is RFQs. There is probably a good reason for that: very few customers need and use the feature. In the last few years, I have only come across one customer using RFQs, but if you have any other experiences, please feel free to comment on this post…
OK, so I have been taking you through a brief tour of my personal high and lows of procurement and sourcing in Dynamics AX 2012. In future posts I will take a deeper dive into some of these areas (probably starting with procurement policies) to look at what really is in the feature box. Hope, you will join me soon for this deep dive.