Life after Dynamics AX: An ERP Alternative for Manufacturers and Distributors

Life after Dynamics AX: An ERP Alternative for Manufacturers and Distributors

Microsoft Dynamics AX has reached the end of life and will no longer be supported by Microsoft. Manufacturers and distributors looking to migrating from AX and onto a new platform might naturally gravitate to Microsoft Dynamics 365 Finance and Supply Chain Management (F&SCM—formerly D365 Finance and Operations or F+O) since that is where Microsoft took the next generation of AX. But is D365 the only–or best–option?

NOTE: D365 Finance and D365 Supply Chain Management are two separate applications, so moving to F&SCM is not simply an upgrade for AX users; rather, it will require a full implementation of one or both of these products.

Most manufacturers and distributors bought AX because of its powerful, industry-specific features, customizability, and ability to handle complex processes. And F&SCM can do all that, just like AX. But implementing any Tier 1 ERP or supply chain management solution, regardless of which you choose, will be costly and could take many months or even years to complete.

So, what’s the alternative?

You might not know that Dynamics 365 Business Central (BC) has many sophisticated manufacturing and distribution capabilities of its own, and for many companies currently running AX, it is well suited to handle those demands without the cost and complexity of F&SCM or another Tier 1 ERP.

The bottom line: Before deciding on where to go when you’re migrating from AX, it’s important to be familiar with what ERPs—whether Tier 1 or Tier 2 (SMB)—can offer and what they can’t. In this blog, we provide a comparison of Dynamics 365 F&SCM with BC and discuss other options for getting exactly the functionality you need for your company, regardless of which solution you select.

Not every ERP can do everything

Most ERP manufacturers would like to “check all the boxes” when it comes to features and capabilities; in truth, however, none of them can “do everything.”

AX and F&SCM lack the components needed for advanced forecasting, replenishment, ABC classification, and inventory optimization. Likewise, Oracle Cloud, Oracle NetSuite, Sage Intacct, and SAP all have strong capabilities but lack others.

The same goes for BC. It has many of the same SCM features, such as demand forecasting and planning, inventory and warehouse management, and inventory replenishment. It offers analytics and reporting (including integration with Power BI) and automation, plus it has the added benefits of more straightforward implementation, customization, and maintenance/support. But it lacks depth in some areas, such as advanced forecasting, inventory planning, ABC classifications, warehouse management, and transportation management.

Nearly all companies with complex supply chains and distribution networks will need to supplement their ERP with third-party add-on products to get the capabilities they truly require. In other words, because you are staying with a Tier 1 ERP, you might still need to purchase an add-on product to handle your specific, more complex requirements.

Leveling up your ERP

We sat down with our friends at StockIQ to discuss how they saw the comparison of F&SCM and BC for manufacturers and distributors.

First, before you start migrating from AX to another ERP, consider why you are doing so. Is it because you need the full enterprise functionality of that ERP (transaction volume, configurability, process manufacturing, etc.), or is it to take advantage of specific capabilities, like inventory optimization and demand planning?

Since BC comes with a respectable set of manufacturing and distribution capabilities, these features can be augmented to match most of what F&SCM offers, but at a lower price point, shorter implementation time (9-12 months), and lower development costs for customizations. Therefore, it is worth considering if you’re migrating from AX.

However, no ERP has everything. For example…

F&SCM does not offer the following:

  • Hierarchical forecasting and demand planning, used to roll up demand at product groupings to support the Sales & Operations Planning (S&OP) process used in advanced planning
  • Advanced inventory management for calculating the inventory position for each SKU utilizing forecastability, service-level targets, and typical order sizes

BC does not offer:

  • Omnichannel forecasting, used to forecast demand for the same item in various sales channels
  • Multi-site materials requirements planning (MRP)
  • Advanced ABC SKU classification that considers an item’s contribution (revenue, sales quantity, etc.), forecastability and price point

If a company needs complexity and advanced features from a supply chain perspective but does not have a complex back end, adding a dedicated product like StockIQ to BC will “level up” BC, making it more powerful and capable of handling many of the same functions as F&SCM.

By tapping into the power of specialized add-ons—available for a wide range of needs, not just manufacturing and distribution—you get the benefits of Business Central without giving up on the specialized functionality you need to run your business.

Talk to ArcherPoint about migrating from AX

If you plan to move from AX, put BC on your list to consider. Take the quiz, Is Microsoft Dynamics 365 Business Central a good fit for my organization?

Then request a free assessment to determine whether Business Central is right for you.

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