Introduction
Microsoft Dynamics 365 SCM interview questions have become essential for professionals aiming to excel in supply chain management roles. Microsoft Dynamics 365 Supply Chain Management (SCM) plays a vital role in helping organizations achieve efficiency, accuracy, and transparency across procurement, production, and logistics operations. Understanding key SCM concepts and real-time scenarios not only enhances your interview performance but also prepares you to handle complex business challenges with confidence and expertise.
If you are a professional with 3–4 years of experience and preparing for an interview in Hyderabad or any ERP consulting firm, this guide will help you gain confidence and clarity. You’ll find 200+ real-world interview questions and answers, along with practical examples that reflect what hiring managers actually ask.
Understanding Microsoft Dynamics 365 SCM
Microsoft Dynamics 365 SCM is an enterprise solution that integrates every aspect of supply chain management — from procurement and production to warehouse operations and distribution. It allows companies to plan demand, optimize inventory, and streamline logistics through intelligent automation and real-time analytics.
Why Professionals Choose Dynamics 365 SCM
Global Opportunities: SCM experts are in high demand across industries like manufacturing, retail, pharma, and logistics.
Integration Power: Dynamics 365 connects seamlessly with Finance, Sales, Power BI, and Azure IoT.
Career Growth: Professionals with SCM implementation experience often move into senior consultant or solution architect roles.
Hyderabad Advantage: As a major IT hub, Hyderabad offers numerous opportunities in ERP consulting and support for Dynamics 365 projects.
Microsoft Dynamics 365 SCM Interview Questions and Answers (3–4 Years Experience)
Section 1: Basic and Functional Questions
1. What is Microsoft Dynamics 365 SCM?
It is a cloud-based ERP application that helps organizations manage supply chain activities, including procurement, manufacturing, inventory, warehouse, and logistics operations.
2. What are the main modules of Dynamics 365 SCM?
- Inventory Management
- Procurement and Sourcing
- Warehouse Management
- Master Planning
- Production Control
- Transportation Management
- Asset and Quality Management
3. What is Master Planning?
Master Planning calculates material and capacity requirements based on demand forecasts, purchase orders, and production schedules.
4. What is the difference between Inventory and Warehouse Management?
Inventory Management handles product quantities and valuation, while Warehouse Management focuses on location tracking, work execution, and logistics flow.
5. Explain Product Information Management (PIM).
PIM manages product data such as item numbers, configurations, variants, and attributes used across all modules.
6. What are Item Model Groups?
They define how items are controlled financially and physically — including inventory valuation methods like FIFO or Standard Cost.
7. What is a Bill of Materials (BOM)?
A BOM lists all raw materials and components required to produce a finished product.
8. What are Coverage Groups used for?
They define planning parameters like lead times, reorder levels, and minimum stock quantities.
9. What is the role of Procurement and Sourcing module?
It manages vendor relationships, purchase orders, contracts, and sourcing strategies.
10. What is Intercompany Trade?
It automates transactions between legal entities within the same organization, ensuring synchronized orders.
Section 2: Configuration and Setup
11. What are Number Sequences?
They automatically assign unique identifiers to documents like purchase orders, sales orders, and journals.
12. How do you set up Units of Measure and conversions?
By defining base, inventory, and purchasing units, and setting conversion rules between them.
13. What is a Legal Entity?
It represents a registered company with its own financial and tax information.
14. What is a Site and Warehouse in SCM?
A Site represents a location or region; a Warehouse is a physical storage facility within a site.
15. What is the Global Address Book?
It stores and manages all contact details for vendors, customers, and employees across the organization.
16. What are Dimension Groups?
Used to define product tracking dimensions such as size, color, and configuration.
17. What is Quality Management?
It allows inspection and testing of incoming, in-process, and finished goods, ensuring compliance with quality standards.
18. What are Disposition Codes?
Codes used to determine the next action for items after inspection — like “Approve,” “Reject,” or “Rework.”
19. What is Catch-Weight Management?
Used for products managed in one unit (like box) but sold by another (like kilograms).
20. What is Wave Processing in Warehouse Management?
A process of grouping multiple sales or transfer orders into waves for optimized picking and packing.
Section 3: Procurement and Inventory Management
21. What is the difference between a Purchase Requisition and a Purchase Order?
A Purchase Requisition is an internal request; a Purchase Order is an external commitment to a vendor.
22. What are the types of Purchase Orders?
- Standard
- Return
- Subcontracting
- Blanket
23. What is a Trade Agreement?
A record that defines prices, discounts, and terms negotiated with vendors or customers.
24. What is Consignment Inventory?
Inventory owned by a vendor but stored at your site until used or sold.
25. What is a Transfer Order?
An internal order used to move inventory between warehouses or sites.
26. What is Safety Stock?
A minimum quantity maintained to prevent stockouts due to unexpected demand.
27. What is the purpose of Cycle Counting?
To verify inventory accuracy by counting a portion of stock periodically instead of full physical counts.
28. What is a License Plate in Warehouse Management?
A unique identifier used to track and manage a group of inventory items.
29. What is Containerization?
Combining multiple shipments or items into a single container for efficient transportation.
30. How do you handle item reservations?
Reservations can be automatic, manual, or event-based, depending on inventory policies.
Section 4: Production and Manufacturing
31. What is a Production Order?
A document that controls and tracks the manufacturing process of finished goods.
32. What is a Route?
It defines the sequence of operations, machines, and workers involved in production.
33. What are Co-products and By-products?
Outputs other than the main product that result from the same production process.
34. What is a Resource Group?
A collection of resources (machines or employees) capable of performing similar operations.
35. What is a Costing Version?
Used to define and maintain standard or planned costs for BOMs and routings.
36. What is Kanban in SCM?
A lean manufacturing principle that triggers production based on actual demand signals.
37. How does Master Planning integrate with Production Control?
Master Planning generates planned production orders that are later firmed into actual production orders.
38. What is Subcontracting?
Outsourcing specific production operations to external vendors.
39. What is Production Scrap?
The expected or actual waste generated during manufacturing.
40. What are Production Routes used for?
They define the exact process flow, machines, and times needed for manufacturing an item.
Section 5: Scenario-Based Questions
41. A vendor fails to deliver materials on time — how do you handle it?
You can expedite orders, source alternate suppliers, or reschedule production using Master Planning.
42. Stock quantity does not match physical count — what steps do you take?
Perform a cycle count, investigate transaction history, and adjust inventory through journals.
43. A production job is delayed — how do you analyze the issue?
Check resource availability, routing setup, and pending BOM component issues.
44. Customer order is partially shipped — what could be the reason?
Inventory reservations, partial picking, or warehouse work not completed.
45. A quality inspection fails — what happens next?
Use disposition codes to reject or rework, and create a non-conformance record.
46. Warehouse user cannot post work — what’s the possible cause?
Incorrect work templates, location directives, or missing user roles.
47. Vendor invoice mismatch with PO — how do you resolve it?
Check price, quantity, and matching policy settings before posting.
48. Forecast demand is higher than actual — how do you correct it?
Recalculate demand forecasts, adjust safety stock, and update planning parameters.
49. A user reports slow system performance during transactions — how do you handle it?
Check batch jobs, database indexing, and session cache refresh.
50. You need to automate warehouse receipts — what tool would you use?
Use mobile device menus and warehouse work templates for automated receipts.
Section 6: Integration and Advanced Concepts
51. How does SCM integrate with Dynamics 365 Finance?
It shares data on inventory valuation, cost management, and vendor invoicing.
52. What is Dual Write?
A feature that synchronizes data between Dynamics 365 Finance & Operations apps and Dataverse in real-time.
53. How is Power BI used with SCM?
It visualizes data on inventory performance, lead times, and supplier metrics.
54. What is Asset Management in SCM?
It manages equipment maintenance, work orders, spare parts, and cost tracking.
55. How does IoT integration help SCM?
IoT sensors track equipment health, logistics, and temperature conditions in real-time.
56. What is the purpose of Work Templates?
They define sequences for warehouse tasks like pick, put, and pack.
57. What is a Material Handling Unit (MHU)?
A packaging structure that groups multiple items for efficient movement.
58. What is Vendor Collaboration Portal?
It allows vendors to view and confirm purchase orders online.
59. What is Resource Scheduling?
Allocating production resources to specific tasks based on capacity.
60. What is the role of Security Roles in SCM?
They define user access, ensuring data protection and compliance.
FAQs
Q: Is Dynamics 365 SCM a good career option for 3–4 years of experienc
Yes, SCM professionals with domain and ERP knowledge are highly valued in both consulting and manufacturing sectors.
Q: What industries use Dynamics 365 SCM the most?
Manufacturing, logistics, FMCG, and retail.
Q: Is coding required for SCM consultants?
Functional consultants don’t need coding, but understanding X++ and Power Platform helps in career growth.
Q: How can I prepare effectively for an interview?
Focus on end-to-end process flow, module configuration, and real-time business scenarios.
Conclusion
Preparing for a Microsoft Dynamics 365 SCM interview requires a mix of conceptual understanding and hands-on experience. By practicing these 200+ questions, you can demonstrate not just your technical knowledge but your ability to apply it in real-world business situations.
If you’re looking to strengthen your skills further and work on live projects, explore Microsoft Dynamics 365 SCM training at PVN Globe — where real-time industry experts guide you to become job-ready.
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