Microsoft Software Aims to Solve Customer Supply-Chain Disruptions
Microsoft has unveiled software that will help customers to better track and coordinate supply-chain systems by combining data from its own programs and tools from rivals like Oracle Corp. and SAP SE, seeking to attract companies roiled by several years of logistical disruptions caused by the COVID-19 pandemic, the war in Ukraine and severe weather.
The software is called Microsoft Supply Chain Center, and was released on November 14 as a preview. Its aim is to offer a central view of information from customers’ existing applications, from Microsoft and other vendors. A supply-and-demand insights module will use artificial intelligence to predict shortages and supply constraints, while a tool for order management helps organize and automate filling orders. The software integrates with Microsoft’s Teams chat and conferencing software to ease communication with outside suppliers, and will include features and services from partners such as FedEx Corp and C.H. Robinson Worldwide Inc.
Supply chain disruptions have upended industries around the world since 2020, costing companies billions in lost revenue. That has accelerated the demand for a better way to track which parts and goods are likely to be in short supply, and when — and how to plan around the challenges. Many companies, especially in the automotive industry, were badly caught out by their lack of insight into the supply chain, particularly of fundamental components such as semiconductors.
“The business need has honestly probably never been as acute as it is right now. Everything is kind of changing and that’s the state of global trade.” - Charles Lamanna(a Microsoft vice president).
Supply chains that are considered “resilient” aren’t as flexible as they seem, he said. That’s because companies often think they have been careful to procure from more than one supplier, only to discover that further down the chain several vendors are also relying on the same piece of equipment or goods that are delayed, Lamanna said.
IFit Health & Fitness Inc., sells NordicTrack treadmills, rowing machines and other fitness equipment, and was one customer who was testing Microsoft’s new software. The company’s warehouses are far from its customers, and its bulky machines weigh 130 - 180 kilograms. They can’t be easily shipped using conventional carriers, yet customers expect fast delivery, said Robert Critchley, iFit’s vice president of transportation and warehousing.
The company set up smaller fulfillment centers closer to customers, but iFit wasn’t very good at predicting what kind of inventory should be stored at these sites, he said. Microsoft’s new product let iFit correctly predict what was needed 70% of the time, up from 30% without it.
Supply Chain Center software also helps customers track the sustainability and carbon impacts in their supply chains.