Ordering Specific Products from Approved Vendors in Dynamics 365 Supply Chain Management

In today's business environment, managing vendors effectively is crucial for procurement success. In this post, we will explore how to order specific products exclusively from approved vendors in Dynamics 365 Supply Chain Management (D365 SCM). This method not only ensures compliance with company policies but also enhances the quality and reliability of the products purchased. Let's dive into the details.

Why Use Approved Vendors?

Ordering from specific approved vendors is a practice adopted by many organizations for several important reasons:

Better Pricing: Approved vendors often provide competitive pricing due to long-standing relationships.
Quality Assurance: These vendors have consistently delivered high-quality products, ensuring that your company maintains its standards.
Reliable Delivery: Timely delivery is essential, especially in manufacturing. Approved vendors are usually more reliable in this regard.
After-Sales Service: Good return policies and warranty services are often associated with approved vendors.
Payment Terms: Favorable payment terms can significantly improve cash flow.
Compliance with Standards: Approved vendors often adhere to industry standards, which is critical for maintaining quality and safety.

Key Documents in D365 SCM

In Dynamics 365 SCM, several documents are essential for checking approved vendors:

Purchase Agreements: These outline the terms of purchase between your company and the vendor.
Purchase Orders: Each line item in a purchase order must be checked against the approved vendor list.
Planned Orders: Generated from Master Planning, these also check against approved vendors.
Purchase Requisitions: These requests for new products must adhere to the approved vendor policies.
Request for Quotes (RFQs): Vendors are invited to quote on required products, and approved vendors are prioritized.
Consignment Replenishment Orders: These orders also require vendor approval.
Production Orders: These must also check against the approved vendor list.

Understanding Item Model Groups

Item model groups are critical in D365 SCM as they define how inventory is valued and managed. Within these groups, you can set up the default vendor check method, which applies to all new products created under that group. The three methods available for the approved vendor check are:

No Check: All vendors are allowed to supply products.
Warning Only: Non-approved vendors can supply products but will trigger a warning.
Not Allowed: Only approved vendors can supply products, and non-approved vendors will be blocked.

Setting Up Approved Vendor Check Methods

To set the approved vendor check method, navigate to the release product detail page in D365 SCM. Here, you can select the method that best fits your company’s policy. The settings you choose will apply to all relevant purchase documents including purchase orders and production orders.

Setting Up Approved Vendors

On the release product detail page, you can easily add or remove vendors along with their effective dates:

Click the Setup button under the approved vendor group.
Add new vendor records or remove existing ones as needed.
Set effective dates to define when a vendor is allowed to supply products.

Viewing Approved Products for Specific Vendors

To view which products are approved for specific vendors, you can access the approved vendor list in the procurement and sourcing module. This allows you to check which products a vendor is allowed to supply and helps ensure compliance with your procurement policies.

Bulk Uploading Vendor and Product Combinations

When setting up your approved vendors, it might be necessary to upload the vendor and product combinations in bulk. The Excel add-in is an effective tool for this:

Use the Excel add-in to download the approved vendor list by item.
Make necessary adjustments and add new records as needed.
Upload the updated file back into D365 SCM once all changes are made.

Demo Walkthrough of D365 SCM

Let’s walk through a practical demo to see how these settings are applied in Dynamics 365 SCM. In this demo, we will:

Access the item model group settings and confirm the approved vendor check method.
Create a new product and observe the default settings applied from the item model group.
Set up an approved vendor for that product and test the purchase order creation process.

Creating a New Product

When creating a new product, select the appropriate item model group. The approved vendor check method will automatically apply, ensuring compliance with your procurement policies.

Testing Purchase Orders

After setting up the approved vendor, create a purchase order to test the settings:

Select a vendor and attempt to add an item to the order.
Observe the system’s response based on the approved vendor settings.

Final Thoughts

Implementing an approved vendor system in Dynamics 365 SCM is vital for maintaining quality, reliability, and compliance in your procurement processes. By following the steps outlined above, you can ensure that your organization purchases products only from trusted sources, thereby reducing risks and enhancing efficiency.

If you have any questions or need further assistance, feel free to reach out. Thank you for taking the time to explore this essential aspect of supply chain management!