> Continuous Process Improvement > Inventory Management > Microsoft Dynamics 365

Improve Your Inventory Management

Your 6-step guide to optimizing Inventory in Dynamics 365.
Download Data Template
Improve Your Inventory Management
Challenges (11) Goals (11) 6 Steps Preview Outcomes Data FAQs (5)

Optimize Microsoft Dynamics 365 Inventory to Boost Flow

Our platform helps you uncover hidden inefficiencies in your operations. It identifies exact bottlenecks, from initial goods receipt through to final dispatch. This reveals crucial opportunities to cut costs and significantly improve fulfillment rates.

Download our pre-configured data template and address common challenges to reach your efficiency goals. Follow our six-step improvement plan and consult the Data Template Guide to transform your operations.

Show detailed description

Understanding the Criticality of Inventory Management in Microsoft Dynamics 365

Effective Inventory Management is the backbone of a healthy supply chain, directly impacting profitability and customer satisfaction. In a complex ERP environment like Microsoft Dynamics 365, managing inventory involves intricate processes, from initial goods receipt and put-away to internal movements, adjustments, picking, and eventual dispatch or consumption. Without clear visibility into these actual workflows, organizations often grapple with significant challenges: capital tied up in excess stock, costly stockouts leading to lost sales, increased carrying costs, and inefficient warehouse operations. The sheer volume of transactions and varied user actions within Dynamics 365 can obscure true process performance, making it difficult to pinpoint where inefficiencies truly lie or how to reduce Inventory Management cycle time effectively. This lack of transparency can lead to suboptimal decisions, unnecessary expenses, and a reactive approach to inventory challenges.

How Process Mining Unlocks Inventory Efficiency

Process mining offers a powerful lens to analyze and improve Inventory Management by transforming raw event data from your Microsoft Dynamics 365 system into a comprehensive, visual representation of your actual processes. Focusing on the lifecycle of individual Inventory Batches or Lots, this approach captures every event, timestamp, and actor involved in their journey. By analyzing entities like InventOnHand, InventTrans, and InventJournal, process mining constructs an end-to-end view, revealing the exact paths inventory takes, identifying deviations from standard procedures, and highlighting where bottlenecks occur. You can see precisely how long it takes from Goods Receipt Recorded to Put-away Completed, or from Picking Initiated to Goods Issue Recorded. This data-driven insight helps you understand not just what happened, but why it happened, enabling targeted process optimization rather than guesswork.

Pinpointing Key Areas for Inventory Process Optimization

With process mining, you gain the ability to meticulously examine critical stages of your Inventory Management process within Microsoft Dynamics 365:

  • Goods Receipt and Put-away Efficiency: Uncover delays between goods arrival and their proper storage. Identify non-standard put-away routes or excessive handling that inflate lead times and labor costs.
  • Internal Movement and Transfers: Analyze the frequency and duration of internal stock movements, revealing inefficient layouts or unnecessary transfers that add no value. Understand the reasons behind frequent stock adjustments or discrepancies.
  • Order Picking, Packing, and Dispatch Performance: Detect bottlenecks in order fulfillment, such as extended picking times, re-picks, or delays between packing and final goods issue. Optimize picking routes and resource allocation to improve order fulfillment rates.
  • Inventory Accuracy and Compliance: Identify the root causes of inventory discrepancies and rework in reconciliation processes. Ensure that inventory counts are performed efficiently and adjustments are processed correctly and promptly, supporting higher data integrity and compliance with internal policies.
  • Waste and Obsolescence: Track the lifecycle of stock that is Scrapped or Disposed, understanding patterns and reasons to proactively minimize waste and associated costs.

By addressing these specific areas, you can significantly enhance your operational flow and reduce waste.

Achieving Tangible Business Outcomes Through Optimized Inventory

The insights gained from process mining translate into measurable improvements across your Inventory Management operations. By identifying and resolving process bottlenecks, you can expect:

  • Reduced Carrying Costs: Optimize stock levels, minimize excess inventory, and improve storage utilization, freeing up valuable capital.
  • Faster Cycle Times: Significantly reduce the time from goods receipt to availability, and from order picking to dispatch, enhancing overall supply chain responsiveness.
  • Improved Inventory Accuracy: Minimize discrepancies, leading to more reliable stock data, fewer stockouts, and better forecasting.
  • Enhanced Operational Efficiency: Streamline workflows, reduce manual effort, and eliminate non-value-adding activities across all inventory processes, from quality inspection to goods issue.
  • Better Compliance and Risk Management: Ensure adherence to internal policies and external regulations by identifying and correcting process deviations, reducing audit risks.
  • Boosted Customer Satisfaction: Faster and more accurate order fulfillment directly contributes to a superior customer experience.

These outcomes empower you to make data-driven decisions that continuously refine your inventory strategy within Microsoft Dynamics 365.

Empowering Your Team for Continuous Inventory Improvement

Leveraging process mining for your Microsoft Dynamics 365 Inventory Management is not just about a one-time fix; it's about establishing a foundation for continuous improvement. By understanding the true flow of your inventory batches and lots, your team can move beyond assumptions and implement targeted changes that yield lasting results. This capability democratizes process improvement, allowing operational teams to proactively identify problems and test solutions based on hard data. Embrace the power of process mining to transform your Inventory Management from a cost center into a strategic asset, ensuring your supply chain operates at peak efficiency.

Inventory Management Stock Control Warehouse Operations Supply Chain Optimization Logistics Material Flow Put-away Order Fulfillment Stock Accuracy

Common Problems & Challenges

Identify which challenges are impacting you

Delays in moving received goods to their designated storage locations lead to backlogs at receiving docks, reducing overall warehouse efficiency and increasing labor costs. This inefficiency can impact subsequent operations like picking and fulfillment. ProcessMind analyzes your Microsoft Dynamics 365 event logs, tracking the full lifecycle of inventory batches, from "Goods Receipt Recorded" to "Put-away Completed." It reveals average put-away times, identifies bottlenecks at specific locations or for certain SKU categories, and highlights process deviations that cause delays. This insight allows you to optimize routes, staffing, and storage strategies to improve flow.

A high volume of inventory adjustments, such as those recorded after counts or physical checks, indicates a systemic issue with accuracy. These discrepancies lead to stockouts, excess inventory, incorrect order fulfillment, and ultimately, financial losses due to write-offs or lost sales. ProcessMind extracts data from your Microsoft Dynamics 365 Inventory module, focusing on "Inventory Count Initiated," "Inventory Count Performed," and "Inventory Discrepancy Adjusted" activities. It visualizes the frequency and root causes of adjustments, identifying specific locations, SKUs, or user actions contributing to inaccuracies, helping you tighten control over stock movements.

When inventory is moved frequently within the warehouse without clear operational necessity, it consumes valuable labor, equipment, and time, driving up operational costs. These excessive movements can also increase the risk of damage or misplacement, affecting inventory accuracy and fulfillment times. ProcessMind maps out all "Stock Moved Internally" activities within Microsoft Dynamics 365 for each inventory batch, identifying patterns of re-work or sub-optimal storage assignments. It highlights SKUs or locations that experience frequent, non-value-adding movements, enabling you to redesign layouts or put-away rules for improved efficiency.

Inefficient picking and packing operations directly impact customer satisfaction and order fulfillment rates. Delays in these critical stages can lead to missed delivery windows, increased shipping costs due to expedited services, and potential loss of customer loyalty. ProcessMind provides a detailed view of the "Picking Initiated," "Picking Completed," and "Packing Completed" activities for each inventory batch involved in an order within Microsoft Dynamics 365. It reveals where delays occur, identifies suboptimal picking routes, and uncovers reasons for re-picking, allowing you to streamline workflows and improve throughput.

Poor management of inventory with expiration dates or items prone to obsolescence leads to significant write-offs and increased carrying costs. Failing to move older stock first, or neglecting timely disposal, ties up capital and occupies valuable warehouse space. ProcessMind traces the complete lifecycle of inventory batches, utilizing attributes like "Expiration Date" and activities like "Stock Scrapped/Disposed" within Microsoft Dynamics 365. It identifies patterns where stock approaches expiration before being picked, or where items are frequently scrapped, enabling proactive strategies for stock rotation and disposal.

An inefficient returns process leads to a backlog of returned items, delaying their inspection, re-stocking, or disposal. This impacts inventory accuracy, ties up capital in unsaleable goods, and can affect customer refunds or exchanges, eroding satisfaction. ProcessMind analyzes the "Return Goods Processed" activities for specific inventory batches in Microsoft Dynamics 365, mapping the actual flow and identifying points of delay or rework. It reveals the average time taken to process returns, highlights bottlenecks in inspection or re-stocking, and identifies opportunities to accelerate the returns loop.

Delays in the "Quality Inspection Performed" activity can prevent newly received goods from being moved to available stock, leading to backlogs, missed production schedules, or delayed order fulfillment. This bottleneck increases lead times and can inflate carrying costs for goods awaiting inspection. ProcessMind tracks inventory batches through the quality inspection process, from "Goods Receipt Recorded" to "Quality Inspection Performed," using data from Microsoft Dynamics 365. It visualizes the time spent in inspection, identifies which SKU categories or suppliers face the longest inspection delays, and pinpoints resource constraints.

A warehouse layout that requires excessive travel distances or frequent re-stacking for common items significantly reduces picking and put-away efficiency. This inefficiency translates to higher labor costs, slower throughput, and increased wear and tear on equipment. ProcessMind analyzes the sequence of "Put-away Completed," "Stock Moved Internally," and "Picking Initiated" activities, combined with "Warehouse Location" and "Storage Bin" attributes in Microsoft Dynamics 365. It reveals patterns of inefficient routing and suggests opportunities to optimize storage assignments based on movement frequency and demand, improving overall flow.

Instances where inventory batches are moved to incorrect locations or cannot be accounted for, resulting in "lost" stock, cause significant operational disruption. This leads to emergency re-orders, delayed shipments, and increased manual searching, impacting both efficiency and customer service. ProcessMind provides an end-to-end view of inventory movements within Microsoft Dynamics 365, tracing the path of each batch through "Goods Receipt Recorded," "Put-away Completed," and "Stock Moved Internally" activities. It highlights deviations from standard paths and identifies users or processes associated with misplacement, helping to prevent future occurrences.

When inventory records are not consistently updated following physical movements or transactions, it creates a gap between actual and recorded stock levels. This lack of real-time accuracy can lead to incorrect decisions about reordering, production planning, and order promising, eroding confidence in inventory data. ProcessMind analyzes the timestamps of "Goods Receipt Recorded," "Goods Issue Recorded," and "Inventory Discrepancy Adjusted" activities from Microsoft Dynamics 365. It identifies patterns of delayed or inconsistent updates, revealing where process adherence is weak and impacting data reliability for critical operational decisions.

A high frequency of manual adjustments outside of planned inventory counts often indicates underlying issues in automated processes or adherence to standard operating procedures. This can be due to incorrect initial data entry, unrecorded movements, or system bypasses, leading to higher labor costs and potential data integrity risks. ProcessMind examines all "Inventory Discrepancy Adjusted" activities and their associated "Movement Reason Code" attributes within Microsoft Dynamics 365. It quantifies the number of manual adjustments, categorizes their reasons, and links them back to preceding activities, revealing specific process steps that require automation or stricter control.

Typical Goals

Define what success looks like

This goal focuses on minimizing the time from goods receipt to final storage. Slow put-away creates warehouse congestion, increases carrying costs, and delays stock availability for orders, directly impacting operational efficiency and financial performance.
ProcessMind analyzes the 'Goods Receipt Recorded' to 'Put-away Completed' activities for each Inventory Batch/Lot, identifying bottlenecks, non-value-added steps, and resource inefficiencies in Microsoft Dynamics 365. This enables targeted improvements to streamline the put-away process, potentially cutting cycle times significantly.

Achieving higher inventory accuracy means recorded stock levels closely match physical counts. Low accuracy leads to stockouts, overstocking, mispicks, and constant operational disruptions, directly impacting order fulfillment rates and increasing costs.
ProcessMind tracks 'Inventory Count Performed' and 'Inventory Discrepancy Adjusted' events for Inventory Batches/Lots, highlighting patterns of inaccuracy by location, SKU category, or user within Microsoft Dynamics 365. This data-driven insight helps identify root causes and implement corrective actions, ensuring reliable stock data.

This goal aims to shorten the lead time from order initiation to goods being ready for shipment. Bottlenecks in picking and packing directly delay customer orders, reduce customer satisfaction, and can incur penalties for late delivery.
ProcessMind maps the 'Picking Initiated' through 'Packing Completed' activities for Inventory Batches/Lots, pinpointing specific delays, resource constraints, or suboptimal sequences in Microsoft Dynamics 365. By optimizing these steps, organizations can drastically improve order fulfillment efficiency.

Reducing unnecessary internal movements means less labor, reduced transit time, and lower risk of damage or misplacement. Excessive transfers add cost without adding value, tying up resources and potentially delaying stock availability.
ProcessMind visualizes all 'Stock Moved Internally' activities for each Inventory Batch/Lot, identifying redundant transfers, suboptimal routing, or excessive movements between locations in Microsoft Dynamics 365. This analysis helps redesign internal logistics for greater efficiency.

This goal targets the reduction of stock that is expired, damaged, or no longer salable. Obsolete inventory incurs significant carrying costs, takes up valuable warehouse space, and ultimately results in financial write-offs.
ProcessMind analyzes the complete lifecycle of Inventory Batches/Lots from 'Goods Receipt Recorded' to 'Stock Scrapped/Disposed', identifying slow-moving items, expiration patterns, and bottlenecks in the disposal process within Microsoft Dynamics 365. This insight supports proactive inventory management and reduces waste.

Optimizing the returns process minimizes the time and resources spent on handling returned items. Inefficient returns processing leads to backlogs, delayed refunds, increased operational costs, and diminished customer satisfaction.
ProcessMind maps the 'Return Goods Processed' activity and associated steps for Inventory Batches/Lots, uncovering delays, rework loops, or compliance gaps in Microsoft Dynamics 365. This allows for process redesign to expedite returns, reduce costs, and improve customer experience.

This objective aims to shorten the duration that inventory remains unavailable due to quality inspections or holds. Prolonged quality hold-ups delay stock availability, impact production schedules, and can lead to missed sales opportunities.
ProcessMind tracks the 'Quality Inspection Performed' activity and subsequent movements for Inventory Batches/Lots, identifying excessive wait times, rework cycles, or resource bottlenecks in Microsoft Dynamics 365. This analysis enables faster issue resolution and quicker stock release.

Improving storage utilization means making the best use of available warehouse space, reducing wasted capacity. Inefficient storage practices lead to longer travel times, difficult access to items, and ultimately higher operational costs.
ProcessMind analyzes 'Put-away Completed' and 'Stock Moved Internally' events for Inventory Batches/Lots, identifying suboptimal storage assignments or frequent reorganizations within Microsoft Dynamics 365. This helps refine storage strategies and layouts for better flow and space utilization.

Preventing stock misplacement ensures that items are always where they are expected to be, eliminating the need for time-consuming searches. Misplacement leads to perceived stockouts, delays in fulfillment, and wasted labor hours.
ProcessMind identifies patterns in 'Inventory Discrepancy Adjusted' activities related to specific locations or users for Inventory Batches/Lots, pinpointing the root causes of misplacement in Microsoft Dynamics 365. This insight drives improvements in tracking and handling procedures.

Achieving better real-time visibility means having up-to-date and accurate information about inventory levels and locations at all times. Irregular or delayed stock updates lead to poor decision-making, inaccurate forecasts, and either stockouts or overstock situations.
ProcessMind analyzes the timeliness and frequency of key events like 'Goods Issue Recorded' or 'Inventory Discrepancy Adjusted' for Inventory Batches/Lots. It identifies process gaps causing delays in data updates, enabling more current and reliable inventory information within Microsoft Dynamics 365.

Reducing manual intervention in inventory adjustments frees up resources and significantly lowers the risk of human error. Frequent manual adjustments often signal underlying process failures or data inconsistencies that could be automated.
ProcessMind identifies recurring 'Inventory Discrepancy Adjusted' activities for Inventory Batches/Lots, determining their specific triggers and causes within Microsoft Dynamics 365. This analysis reveals opportunities to automate routine adjustments or implement process changes to prevent the need for manual intervention.

The 6-Step Improvement Path for Inventory Management

1

Download the Template
2

Export Your Data
3

Upload Your Dataset
4

Analyze Your Process
5

Implement Improvements
6

Monitor Your Process
1

Download the Template

What to do

Obtain the dedicated Excel template to structure your inventory data. This ensures your data from Microsoft Dynamics 365 aligns perfectly for analysis.

View Data Template Guide Download Template
Why it matters

A standardized template simplifies data preparation, saving time and preventing errors, which is crucial for accurate process mining.

Expected outcome

A ready-to-fill Excel template that matches ProcessMind's required data structure for inventory events.

WHAT YOU WILL GET

Discover Hidden Efficiency in Your Inventory Process

ProcessMind visualizes your end-to-end inventory operations, from goods receipt to dispatch. Pinpoint exact inefficiencies and understand their impact on your supply chain.
  • Visualize end-to-end inventory journey
  • Identify bottlenecks in goods receipt or dispatch
  • Analyze cost drivers in inventory processes
  • Improve fulfillment rates and reduce stockouts
Discover your actual process flow
Discover your actual process flow
Identify bottlenecks and delays
Identify bottlenecks and delays
Analyze process variants
Analyze process variants
Design your optimized process
Design your optimized process

TYPICAL OUTCOMES

Achieving Excellence in Inventory Management

These outcomes represent the tangible benefits organizations realize by applying process mining to their Inventory Management workflows within Microsoft Dynamics 365, particularly when analyzing inventory batch and lot data. By identifying bottlenecks and inefficiencies, businesses can optimize stock levels, reduce carrying costs, and accelerate order fulfillment.

0 %
Faster Put-away Cycle Time

Average reduction in put-away duration

Process mining identifies bottlenecks in your put-away process, leading to a significant decrease in the time it takes to stock incoming goods. This ensures faster availability of products for sales.
0 %
Enhanced Inventory Accuracy

Reduction in discrepancy events

By pinpointing root causes of inventory discrepancies, organizations can reduce errors that lead to lost sales or excess stock. This improves overall data reliability and operational planning.
0 %
Accelerated Picking & Packing

Increase in order fulfillment speed

Uncover delays and inefficiencies within the picking and packing stages of order fulfillment. This leads to quicker customer shipments and improved service levels.
0 %
Reduced Obsolete Stock Costs

Decrease in inventory write-offs

Gain insights into the lifecycle of your inventory to identify slow-moving or obsolete items earlier. This minimizes carrying costs and prevents significant financial losses from write-offs.
0 %
Optimized Storage Utilization

Fewer unnecessary stock movements

Analyze internal stock transfer patterns to identify and eliminate inefficient movements, leading to better use of warehouse space. This reduces operational costs and handling time.

Individual results will vary based on the complexity of your inventory processes, the quality of your data, and specific business objectives. The figures presented illustrate common improvements observed in similar process mining engagements.

FAQs

Frequently asked questions

Process mining visualizes your actual inventory processes using data from Dynamics 365, revealing how inventory truly moves. It identifies bottlenecks like slow put-away or picking, flags frequent stock discrepancies, and exposes inefficient transfers. This helps you understand where to focus your efforts to improve efficiency, reduce costs, and ensure compliance.

Process mining connects directly to your Microsoft Dynamics 365 system to extract event logs related to inventory movements and transactions. It uses your Inventory Batch/Lot as the case identifier, tracking every step an item takes from receipt to shipment or adjustment. This data allows for reconstruction of the complete process flow and detailed analysis.

To perform process mining, you primarily need event logs containing a case identifier, activity, and timestamp. For Inventory Management, this means tracking your Inventory Batch/Lot, the specific action performed, and when it occurred. Additional attributes, such as resource, location, or quantity, can enrich the analysis and provide deeper insights.

The timeline can vary based on data volume and complexity, but initial data extraction and model setup typically take a few weeks. After that, you can expect to see your first process maps and identify major bottlenecks within 4-6 weeks. Subsequent analysis cycles can then be much faster, providing continuous improvement opportunities.

You can expect quantifiable improvements such as a reduction in put-away cycle time, improved inventory accuracy, and accelerated picking and packing speeds. Process mining helps minimize obsolete inventory, streamline returns, and optimize storage utilization. Ultimately, this leads to reduced operational costs and enhanced customer satisfaction.

Yes, process mining is scalable and beneficial for inventory operations of all sizes. While larger organizations might have more complex data sets, even smaller businesses can gain significant value by identifying and optimizing their core inventory processes. The methodology applies universally, regardless of the scale of your Dynamics 365 usage.

Common challenges include ensuring data completeness and consistency across different modules, especially with highly customized Dynamics 365 environments. Data volume can also be a factor, requiring robust extraction methods. Access permissions and understanding the underlying table structures are also key considerations during the setup phase.

While some technical expertise is beneficial for initial data connection and transformation, many modern process mining tools are designed for business users. They offer intuitive interfaces for analysis once the data is prepared. However, a collaborative effort between business stakeholders, IT, and potentially a process mining expert often yields the best results.

Process mining tools are designed to work with real-world data, which often contains inconsistencies. They can identify gaps, outliers, and deviations in your event logs, which themselves can be valuable insights into data quality issues. Depending on the tool, various techniques exist to filter, repair, or impute missing data points for accurate analysis.

Optimize Inventory Management, Boost Flow Today

Reduce inventory cycle time by 30% and boost fulfillment rates.

Start Your Free Trial

No credit card required. Setup in minutes.