What’s New in Dynamics 365 Supply Chain? 2021 Wave 1 Release Update

The 2021 Wave 1 release for Dynamics 365 Supply Chain has introduced many new features that improve their software offerings that focus on global shipping, product lifecycle management, financial visibility, edge and scale deployments, and warehouse operations. 

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Steve Stallings

In this 2021 Dynamics 365 Supply Chain wave 1 release, Microsoft has placed a great deal of emphasis on inventory visibility and accounting. Starting with the Landed Cost Module for goods in transit visibility, global inventory visibility and global inventory accounting complianceAll these new capabilities add valuable information for both Dynamics 365 Supply Chain and Finance users in global operations. 

Goods in Transit Visibility & Landed Costs

Microsoft is emphasizing the goods in transit visibility that the new Landed Cost module provides, which is important as supply chains get more complex and lead times increase due to global supply partners. Having visibility of expected delivery dates and any changes that impact those dates throughout the supply chain are critically important to maintaining sufficient inventory to meet demands. 


But keep in mind that there are two primary reasons that companies adopt Landed Cost solutions, and in many cases the primary one tends to be financial. Finance cannot operate effectively if they are blindsided by significant AP invoices from services vendors whose prices are not reflected on the primary vendor’s PO and invoice. Having full visibility to the commitments and liabilities for brokers, shipments, insurances, customs duties, and other landed costs are essential to understanding and controlling the overall cost of goods.  Fortunately, this Landed Cost solution covers both business requirements for inventory visibility and financial liabilities comprehensively. 


A discussion of global inventory management would not be complete without also looking at inventory transfers between warehouses, whether domestic or international. Few people are aware that the Landed Cost Module includes the ability to track landed costs for warehouse transfer orders. Therefore, if your company owns inventory in one warehouse and pays to have it transferred to another, those freight costs, as well as international landed costs can also be tracked with full financial liability visibility and invoice processing. 

Global Inventory Visibility

Global inventory visibility is important to every international enterprise that needs to know that the right quantities of products are in the right places in the enterpriseThat visibility is critical to supply and demand balancingThe new Dynamics 365 Supply Chain Global Inventory Visibility add-in is a highly scalable independent micro-service that provides real-time visibility of on-hand inventory across multiple legal entities in the business enterprise, and across multiple inventory platforms and systems. The add-in accomplishes this via Dataverse integration across multiple 3rd party inventory solutionsThe integration supports impressively high transaction volumes in the range of billions of transactions per day with simultaneous requests across a variety of systemsIt supports inventory posts and queries across platforms as wellNow you can have the best of both worlds with local inventory details and global visibility and control as well. 

Global Inventory Accounting Compliance with International Accounting Standards

This is key to properly accounting for inventory in an international enterpriseFinancial standards vary by country, tax authority, and IFRS (International Financial Standards Reporting Foundation) reporting requirements making accounting for inventory assets in each operating country correctly, an essential business requirementThe new Dynamics 365 Supply Chain Global Inventory Accounting add-in supports different general ledger and costing ledger requirements by country, multi-currency, and dual-currency requirements, as well as multiple inventory accounting policies (conventions). This allows businesses to comply with multiple international accounting standards and your own internal management accounting by reconciling both, providing a comprehensive audit trail of transactions and adjustments.  

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Product Lifecycle Management

PLM received a huge boost with the introduction of Engineering Change Management and continued expansion into the asset leasing space with Asset Management, as well as Asset MaintenanceBoth new capabilities provide a great deal of additional value to these existing business processes.

Engineering Change Management

A huge addition to the PLM toolset in Dynamics 365 Supply Chain is the Engineering Change Management Module. From the addition of simple version control of products, BOM’s, Formulas and Routings, to a comprehensive set of tools to support the process of engineering change management. That process typically originates with the creationof an initial Engineering Change Request (ECR)followed by change impact analysis, to the formal Engineering Change Order (ECO), and finally through tools that effectively implement engineering changes.  This solution provides a very comprehensive toolset for managing version control and engineering change processes.

Asset Maintenance Billing for Assets Under Lease

This feature is a new addition to the Asset Maintenance solution introduced last year. This new billing capability allows companies to bill their customers for leased assets that they maintain for those customers. Capital equipment providers that do in-house, or on-site service and maintenance of their customer’s equipment now have a way to define billable portions of that work and create customer-specific agreements to support that billing process.  This new capability works together with warranties to determine what is covered and what is billable. It utilizes project contracts to define customer terms. Additionally, it provides a link between assets and the customer where the leased assets are installed. A parent project is linked to a service work order where project fees can be used to create journals for hours and parts. Prices determine at what rates those hours and parts will be billed to the customer. 

Asset billing maintenance screenshot from within F&O

Rebates, Royalties & Deductions (Pre-Release – Available for Public Preview)

Procurement and sales organizations were not left out of the list of major upgrades either. The new Dynamics 365 Supply Chain Rebates, Royalties and Deductions module adds much-needed controls and visibility to business processes that are too often left up to creative salespeople to come up with ad-hoc, off-the-book solutions. When rebates are undocumented, finance can be completely blind to significant liability accruals and expenses until payments are requested from customers. By providing a framework for these typically off-invoice agreements, this new module provides the financial visibility needed and assures that these agreements meet minimum profit margin requirements as well. Significant savings can also be realized by automating these business processes that are otherwise typically managed manually in Excel. 


Rebates are the most commonly used of these three features. Customer rebates are typically off-invoice and across-order discounts offered to customers as an incentive to meet certain sales thresholds for a set timeframe. For a simple example, the individual sales order and invoice price for a product may be $10.00, but the rebate states that if the customer buys 10,000 of them over the course of a year, they earn a 5% rebate. Without visibility, finance gets an AP invoice from a customer for $5000 at the end of the year. With the Rebates solution, those accrued rebates can be calculated on any schedule, typically weekly or monthly, and posted as accrued liabilities with a pre-determined claim or payment date fully visible to the financial organization.


The Rebates solution handles much more complex scenarios than the above example, including multiple tiers of discounts, multiple claim periods, complex calculations for earning rebates, and the ability to define exclusive, related or nested rebate agreements. The basis for rebate lines can be based on an individual product, groups, or all-products, as well as individual customers, groups of customers, or all-customers. A rebate can have multiple lines that each have their own basis and details. Rebates can include minimum and maximum thresholds as well, such that there is no rebate below a specified sales threshold level, or that a rebate has an upper limit that caps payments at a certain level. Periodic write-offs can also be automated for unclaimed rebates in order to clear those liabilities off the financial books. 


In the example above we covered customer rebates, but vendor rebates work exactly the same way in reverse. In the case of Vendor Rebates, we are accruing what the vendor owes us over time and we will automatically create a payment request in the form of an AR invoice or debit memo for that vendor at the specified claim period(s). The basis for vendor rebates can be the value of purchases we made from the vendor, or the value of sales orders that included that vendor’s products. The latter defers the rebate accrual and payment until we have realized a sale for those qualifying vendor products. 

Rebates from within dynamics 365 finance and supply chain
Rebate management examples can be seen on the lower panel

Customer Royalties

Customer Royalties are a less often used feature that can be applied to protect licensed goods and services. You may be the copyright, license, or intellectual property (IP) holder who grants usage rights to one or more of your customers with the expectation that royalties will accrue to you and be paid on a set schedule. Royalty agreements include similar flexibility and features to rebate agreements in how they are defined and calculated. In addition, royalty agreements may have specified minimum payments defined such that the customer pays that minimum amount regardless of sales volumes. 


Deductions are similar to royalties except that they are the fee or compensation your company will pay for the privilege of using copyrighted, licensed, or other forms of intellectual or other property. For example, as an apparel manufacturer, your company may pay a deduction (like a royalty) to Disney for example, to use a copyrighted image of a certain mouse on a shirt. Or as an oil company, you may owe a deduction to a property owner for land use over the course of a drilling project. The deduction agreement may be based on a set fee, or it may be based on the revenue you generate from the use of that licensed image, product, land, etc. Deduction agreements are defined just as rebates or royalties are to provide visibility of accrued liabilities and payment schedules to the owner of the rights to that product or service.   

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Edge and Scale Deployments

Edge and Scale deployments for mission-critical real-time business processes increase your data processing capability to perform real-time and near-real-time tasks that would otherwise adversely impact other users sharing the system. Traditionally, there have been business processes that consume huge amounts of data processing power and are therefore relegated to running at night or on weekends. These processes are typical of Master Planning and MRP/CRP in manufacturing, and some warehouse processes like Wave Planning that are typically defined as periodic batch jobs. 


Anytime large batch jobs must be run to facilitate complex business processes; the tendency is to run them periodically at night to avoid interfering with normal business operations at speed. This applies to manufacturing with its complex Master Planning (made up of Demand Planning, Forecasting, Master Scheduling (MPS)), and Material Requirements Planning (MRP) with Infinite or Finite Capacity Planning (CRP) all with options for multiple planning scenarios. The issues that result from this periodic batch approach are that planners and buyers are always working with old data and making decisions based on day-old or week-old information about supply and demand relationships. The ability to generate planning information in real-time removes that latency and provides planners and buyers with up-to-date information on which to base decisions. 

Warehouse Operations

This approach also applies to Warehouse Management with multiple forms of Wave Planning for picking, replenishment, and warehouse operations, that can consume copious amounts of computer resources, and tend to be run periodically, which similarly sub-optimizes results. Ideally, they should be run in real-time on an as-needed basis, which is what Edge and Scale technology provides. By separating those resource intensive processes onto separate cloud server environments, they can be run as needed without interfering with other users and business processes.

Mobile Warehouse Operations App

Warehouse operations are enhanced with the new Dynamics 365 Supply Chain Mobile Warehouse Operations App that is offered in Windows or Android versions. This app is installed as a web service application in Azure Active Directory for the Supply Chain Management Tenant where your Warehouse Management System (WMS) resides.  It operates on any mobile device that supports Android or Windows apps. This application allows individual users or groups of users to have tailored multi-step warehouse operations business processes presented to them to do warehouse work. It supports over 100 specific warehouse tasks as represented by this subset of that task list: 

Task list in the Dynamics 365 mobile warehouse operations app
Task list in the Dynamics 365 mobile warehouse operations app

These tasks are then grouped into specific business process flows to provide the correct sequence and a complete process for eachExample of a typical task flow: 

Task flow in the Dynamics 365 mobile warehouse operations app

This is an example of what an assigned user would see on their warehouse mobile device to complete steps one and two of this process: 

Scan a container in the Dynamics 365 mobile warehouse operations app
Enter a weight in the Dynamics 365 mobile warehouse operations app

This mobile app provides and improved user experience with easy to use screens and large format configurable buttons and text to enhance mobile operations. It utilizes the device’s camera for scanning and can provide voice prompts and feedback as well as vibration feedback. It can also display information such as a picture of the product to be picked or put away for visual verification. This level of warehouse operations automation increases both speed and accuracy of warehouse tasks. 

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