13 Features Dynamics 365 Uses to Improve Procurement and Sourcing

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The sudden surfacing and evolution of the digital era means manufacturers are beginning to realize their legacy supply chain technologies are not only incapable of processing larger amounts of data and solving procurement and sourcing challenges, but also a liability when it comes to providing a solid basis for future endeavors.

Luckily for them, Microsoft Dynamics 365 offers a versatile set of features which tackle Procurement and Sourcing troubles with ease. This blog takes a look at 13 capabilities that ensure a smooth user experience and enable greater operational efficiency:

Indirect procurement (catalogue and non-catalogue)

Manage purchase requisitions for indirect goods and services by using a catalogue-based or non-catalogue-based procurement process. The procurement process is supported by an approval workflow using the organizational hierarchy.

A Microsoft SharePoint based catalogue can easily be created from products defined in product information management. The catalogue also supports punch-out capabilities to external vendor sites. A sophisticated budget check is included.


Improve decision-making by defining evaluation criteria upfront and improve management of Requests for Information (RFIs), Requests for Proposals (RFPs) and Requests for Quotes (RFQs) from solicitation to award. Improve the vendor/ government contractor experience and help vendors operate more efficiently by providing the ability to view and respond to open RFQs, allowing the proposal of item or service substitutes or no bid, and providing visibility into the status and results of a solicitation (for Public Sector). This includes a publicly available vendor portal and open bidding. Increase sourcing efficiencies through well-defined scoring criteria and rank vendor response based on multiple criteria. Manage solicitations including specification of solicitation types, methods and scoring criteria and track and communicate changes to the RFQ. Utilize sealed bid methodology on RFQs and provide questionnaires to qualify vendors to bid on specific items or services. Improve the user experience of the Vendor self-service portal. Bid scoring, valuation and ranking based on user-defined evaluation criteria.

Purchasing policies and signing limits

Enforce purchasing policies with a collection of purchasing policy rules that control the procurement process. A centralized procurement desk defines policy rules to support global policies and processes, and applies them to purchase requisitions and purchase orders based on the legal buying entity and operating unit. For procurement and sourcing there are six policy rules: catalogue, catalogue access, category, purchase requisition RFQ, purchase requisition control and purchase order creation and demand consolidation. In addition to policy rules, Dynamics 365 for Operations provides expenditure reviewers and signing limits.

Category management

Gives category managers the ability to define different category hierarchies that are independent of, but still related to, commodity codes or catalogue/item hierarchies in order to easily manage the overall spending based on categories.

Direct procurement

Manage the entire lifecycle of procurement from planned purchase order to confirming and changing a purchase order. This cycle also includes returned orders. This module also supports direct deliveries, pro-forma purchase orders and landed-cost charges to purchase orders such as freight, insurance and unrecoverable taxes.

Trade agreements (vendor)

Manage price and multifaceted discount policies in all currencies. The price revision process can be governed by workflows to ensure compliance with internal policies. The generic currency agreement allows prices to be set up in a single currency and automatically converted to the vendor’s currency.

Vendor management

Vendor management includes vendor search, vendor maintenance and support for requesting and approving a new vendor via the Enterprise Portal supported by workflow. Take advantage of Sites Services* to extend the vendor onboarding process with a cloud-based service facilitating the dialogue with new vendors.

Vendor self-service portal

Enable vendors to update profile data, upload catalogue content and review invoices and payments. Vendors can receive notifications from the organization, respond to RFQs and view vendor performance.

Vendor rebate management

Automate administration, tracking and claiming process of vendor rebates and reduce administrative burden and errors associated with promotion performance monitoring and claim processing and improve cash flow forecasts through accruing for future receivables. Have a quantified basis for ongoing and future negotiations on rebates with the vendor.

Broker and royalty contract management

Manage payment of fees to brokers for the service of facilitating sales with broker contract management. Control usage-based payments for the right to the ongoing use of an asset or an intellectual property with royalty management. This module will reduce the administrative burden of managing royalties and broker payments.


In this new release, and taking advantage of the new enhanced UI, we are introducing a new concept called “Workspaces” with the goal of connecting people with data and processes to make better decisions. The newly added workspaces include Environmental Manager, Operations Manager, Production Manager and Shop Supervisor.

Procurement reporting

Gain insight into the organization’s procurement performance using transactional reports, analytical reports (such as vendor and procurement spend analysis, top 100 vendors and vendor performance) and KPIs. A predefined data cube for purchasing is included.

Procurement workflows

Procurement operations can be driven and governed by workflows. With the flexible and visual workflow engine, procurement managers are able to set up workflows that make the procurement cycle more efficient and enforce purchasing policy compliance.


Dynamics 365 covers all procurement and sourcing steps from identifying a need for product and services through procuring the product, receipt, invoicing, and processing of payment with vendors. You can configure procurement processes toward specific business needs by defining purchasing policies and workflows. With Merit Solutions as your partner, you can take precise control of your entire Supply Chain and know you made the right decision using real-time data. For more information on procurement and sourcing processes in D365, click here. For a further overview of the capabilities of D365 for manufacturing purposes, visit this page.

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