How to use Business Central for a Multi-Channel Distribution Company

I want to talk with you about how you can use Microsoft Dynamics 365 Business Central in multi-channel distribution scenarios. We’re going to look at inventory, financial reporting, and how we can use this functionality in wholesale distribution, Shopify with retail on-premise locations, and also with Amazon and Walmart. We’ll also take a look at planning and purchasing. So let’s get started.

Item Management

Item Card Overview

Let’s take a look at items and this item here. This is the item card for this particular item. On here, I’ve got a number of quick tabs over on the left. In those quick tabs, I’ve got information about this item. It’s easy to get information about this item, and it’s also something that you can personalize. Every user can add additional information to this page and rearrange the way the page looks.

Quick Tabs

So let’s get started on this. In this first quick tab item, we’ve got information about this specific item. If we scroll down a little bit more in the inventory quick tab, we’ve got information about how this item behaves in the inventory system. We can look at cost and posting. We can have individual costing methods for all the different items. We also have posting information about how this item is going to post into the general ledger and into the financial statements.

Pricing and Replenishment

In Business Central, we can maintain pricing for each item. We can have different price levels for different customer groups. We can also have discounts and time-sensitive discounts as well. In this quick tab about replenishment, we specify how we are going to replenish the inventory for this particular item. There are a number of options. We can purchase it, manufacture it, and assemble it.

Planning and Warehouse Management

If we go down to the planning quick tab, this is all the information we need to run the MRP process against this particular item. It’s all here in one location. It’s easy to set up and use, and we’ll take a look at this later in the demonstration. In the last two quick tabs, we can see that we can track items by serial number and by lot number. On the warehouse quick tab, we can see that the warehouse management functionality is built into Business Central. It’s part of the basic licensing. If you want to use warehouse management, it’s built in and ready to go.

Warehouse Management Integration

The advantage is that the warehouse management functionality uses the same inventory as Business Central. It’s built right in, connects directly to Business Central, and has all the functionality you would expect in a warehouse management system. Finally, let’s take a look at the factboxes on the right side of this card. You can see a picture here, and I can easily attach documents. If I have a specification document, I want to attach it to this item in the system. I can easily do that.

Advanced Features

Copilot and AI Integration

Right now, Microsoft is also offering Copilot as part of Business Central. To create marketing text should be used. For example, if you had a website, you could generate the text for all your different items using Copilot, and it does a pretty good job. Built into Business Central is artificial intelligence that allows you to track your inventory movement and sales. You can also provide a forecast. Here’s a forecast of the inventory for this particular item. I can switch to the sales forecast. This forecast is based on historical information. This is built right into Business Central. It’s easy to use. You can also create a demand forecast and use that in Business Central.

Dynamic Chart of Accounts

From an accounting standpoint, the dynamic chart of accounts in Business Central makes it applicable to distribution. I can use dimensions to further identify the chart of accounts and additional dimensions to identify other aspects of the transactions. For example, I can use them to track sales to particular customers, customer groups, and channels. I can have different channels, track those individually, and get financial reports on those individual channels. I can track it by regions or countries. This is an easy way to set up additional information that’s part of Business Central and it really facilitates reporting on these types of items.

Multi-Channel Distribution

Wholesale Distribution

This is a diagram of how Dynamics 365 Business Central can be used in a multi-channel distribution environment. From a wholesale standpoint, I can directly ship out of Business Central. I can use drop-ship functionality and EDI to communicate directly with my customer systems.

Shopify Integration

There’s also an out-of-the-box integration with Shopify. If you have a Shopify site or you’re going to set one up, there’s already an integration to it in Business Central. It can communicate directly with Shopify.

On-Premise Retail Integration

For on-premise locations, there are a number of POS systems that communicate with Business Central so you can keep up to date in your individual stores. This allows you to expand into the retail environment if that’s what you’ve got. The cloud nature of Business Central makes it easy to connect other systems. If you’ve got customers like Walmart and Amazon, you can easily connect to their systems from Business Central and keep them up to date on sales orders and inventory levels.

Drop Shipment Process

Customer Sales Order

Next, I want to show you a clip of the drop shipment process in Business Central. We’re going to start with a customer sales order, send the PO to the vendor, show where the vendor ships the item to the customer directly, invoice the customer, and then invoice the PO. Here’s a sales order to my customer for this item. I want to indicate that this will be a drop shipment, so I’m going to check that mark right there. You may have to add this field to your system through personalization.

Requisition Worksheet

The next step is to go to the requisition worksheet here. I have got a brand new one and what I’m going to do is go to the drop ship option and get sales orders. This will look at my system and get all the sales orders that have drop ship lines on them. Here’s the result. I can scroll over here and look at the action that’s expected and that is to create a purchase order. I’ll make sure that this action message is accepted. Then I’ll go back to home and carry out the action message. What this will do is create a purchase order. Here’s the purchase order that was created from the Requisition worksheet.

Shipping and Invoicing

If I scroll down, I can see that in this quick tab for shipping and payment, it shows this shipment going not to my warehouse, but to the customer. You can see the customer address right there. Once I have been notified by my vendor that the items have shipped to my customer, I’m going to invoice my customer. I’ll go ahead and do that. If we scroll over to the right, we can see in the quantity received, which indicates that the items have been sent to the drop ship customer. This has already been filled in by Business Central. The final thing I need to do is enter the vendor’s invoice. Once I’ve received that, I’ll put in the invoice information and then go ahead and post that and I’m done with the entire process.

Conclusion

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Shopify Integration Demonstration

Setting Up Shopify

Next, I want to show you a clip of the Shopify integration from Business Central to Shopify. I’ve set up a Shopify website. I’ve uploaded the products and the customers to the Shopify site. We’re going to place an order on Shopify with payment information. I’m going to download that into Business Central and then that will be processed from there. Business Central comes with a Shopify connector built into the regular product. You can see that here. In Shopify, there’s a Dynamics 365 Business Central add-in that you can easily add to your site. The connector handles integrations for products, customers, and orders.

Synchronizing Products and Customers

These are my Business Central products that I’m going to push up to Shopify. If we go to Shopify, we can see the products here on the website. You can see I’ve got the products themselves. I’ve got the photos which originated in Business Central. I also have inventory levels right here, and I’ve got pricing associated with it also. I’m using Business Central as a master file for all product information. Also, I pushed up my customers from Business Central and they’re in Shopify. In Shopify, you have an option. You can require customers to have accounts or they don’t need accounts. It’s up to you.

Processing a Sales Order

Let’s run through a simple sales order from the Shopify site. Here’s my site right here. These are all the products from which I can choose to put together an order. I’m going to select this one. I’ll drill into that, and I see all the information about this particular item, including the photo. Again, this all comes from Business Central. I’m going to add 1 to my cart and then I’m going to check out. I set up my Shopify site and does not require an account to be created for new customers, so I’m just going to create an order from basic customer information. I’ve entered my customer information and I’m going to continue to shipping. I’m going to take the default shipping method here and go to the payment and I’ll enter my credit card information. Once I’ve done that, I’ll click on Pay Now and Shopify takes the order. It’s now part of the site and then we’ll download it into Business Central.

Downloading Orders

In Business Central, we can look at the orders that are in Shopify. These are four orders I did in the past. I’ve not yet downloaded the new order that we just put in. I can easily do that. I’ll sync the orders from Shopify. They’ll come into this screen here, and then we’ll move these to the sales order. And here’s the new order

MRP Functionality and Purchasing

Planning Purchases with MRP

Next, I want to show you how you can use the MRP functionality in Business Central to easily plan your purchases. So let’s take a look at that. We’ll go to prepare here and calculate a new plan. I don’t need the MPs, so I’ll use these dates. I can add a demand forecast if I want to. So let’s go ahead and run this. I can see these suggestions about what MRP is telling me I should purchase. So let’s purchase a few of them here. I’ve got information. This is a purchase. This is going to be this vendor. Let’s just mark these two here, and then I’m going to go ahead and generate the purchase orders and create purchase orders right here.

Managing Purchase Orders

These are all my open purchase orders right now. Let’s click into this one we just created and open that up. This is a standard purchase order in Business Central. I use this form for any purchase that I need to make. The purchase invoice is also in a similar-looking form. I’m going to put the purchase invoice here, and when I go ahead to post this, I’ve got options. I can just receive it now and invoice it later, or I can receive and invoice it at the same time. I’m going to go ahead and do that.

Completing the Purchase Process

Those items have been received into the inventory and I’ve created a vendor’s invoice so I can later pay that vendor for those items. We started with an MRP process that looked at all the availability in the system, all the demand in the system, and suggested that I make a number of purchases. We made two purchases of two items, received those items, and invoiced them. That’s the complete process. It’s that simple in Business Central.

Conclusion

Summary of Key Points

We talked about how Dynamics 365 Business Central is a good fit for multi-channel distribution. We looked at inventory, some financial reporting aspects, and different scenarios in which Business Central can be used: wholesale distribution, the Shopify Connector, on-premise retail, and also with Amazon and Walmart. Finally, we looked at a quick planning and purchasing process, ran the MRP process, created purchase orders, received the items from the purchase order, and went ahead and invoiced that purchase order.