Supply chains face relentless pressure to deliver speed, resilience, and cost efficiency. Artificial intelligence (AI) has moved beyond experimentation and now serves as a practical driver of transformation across procurement, planning, and operations. Through Microsoft’s ecosystem, AI agent capabilities are now seamlessly integrated into Dynamics 365 applications. This integration is designed to help support workflow automation and insight-led decision making.
For supply chain management professionals, understanding how to leverage AI effectively is critical. This article explores three pivotal areas: the role of AI agents in supply chain enhancement, practical guidance for deploying AI in Microsoft Dynamics 365 enterprise resource planning (ERP), and frontier insights for building an AI-ready supply chain.
AI Agents Drive Supply Chain Enhancement
AI agents are specialized applications that can connect to systems, apply reasoning, and execute processes, working alongside or on behalf of people and organizations. Three types of agents you may encounter include:
- Task Agents: Microsoft is increasingly embedding prebuilt task agents into its applications. A task agent can automate a defined business process, e.g., supplier communications, purchase order tracking, etc.
- RAG (Retrieval‑Augmented Generation) Agents: Information retrieval can be a core component of AI agents. RAG agents can pull information from approved sources to provide grounded, cited answers, e.g., intranet or policy assistants.
- Autonomous Agents: Autonomous agents are designed to be contextual, adaptive, and goal oriented. These agents can orchestrate workflows across systems with minimal human intervention, under governance guardrails.
AI agents are transforming supply chain management by automating complex, data-intensive processes. They leverage large language models (LLMs) to interpret vague or incomplete inputs, apply reasoning, and execute tasks dynamically. This capability is particularly valuable in scenarios with undefined entry and exit points, such as supplier communication, demand planning, and inventory management.
AI agents can turn systems of record into systems of action.
For example, the Supplier Communications Agent in Microsoft Dynamics 365 Supply Chain Management automates routine procurement tasks like purchase order follow-ups and vendor correspondence. By handling these repetitive tasks, it can help procurement managers gain time to focus on strategic activities like relationship building and contract negotiations.
Similarly, the Account Reconciliation Agent introduces a transformative step toward autonomous financial close, moving beyond reliance on SSRS reports. Its intelligent workspace identifies exceptions, evaluates them, and recommends actions to maintain accuracy. This design supports consistent reconciliation, greater transparency, and improved financial planning through regular updates.
The ultimate vision for AI in supply chain management is the development of autonomous agents capable of executing tasks with minimal human intervention. These agents continuously learn, adapt, and innovate, pushing organizations toward sustained improvement and breakthrough outcomes. AI agents such as this not only enhance operational efficiency but can also elevate decision making by delivering real-time insights across interconnected systems.
Microsoft Dynamics 365 & Copilot: Practical AI Deployment
When thinking about AI in ERP, start with quick wins, like the built-in Copilot agents. These preconfigured capabilities reside inside Dynamics 365 applications and handle common tasks such as supplier communications or purchase order updates. They’re designed to accelerate adoption and build confidence by simplifying routine processes without requiring heavy customization.
From there, organizations can extend and tailor these experiences using Copilot Studio, Microsoft’s low-code platform for creating and modifying AI agents. This allows business users and citizen developers to incorporate organizational policies or workflows, helping align decisions with internal guardrails. Copilot Studio works in tandem with the Model Context Protocol (MCP) server, which enables secure read/write actions in Dynamics 365 through natural language, bridging the gap between ERP data and AI-driven automation. Microsoft recently announced significant enhancements to its Dynamics 365 ERP MCP server, empowering citizen developers with access to more than 500,000 actions that can be triggered through natural language.1
Finally, for advanced scenarios, Azure AI Foundry provides a full-stack environment for building and deploying enterprise-grade AI applications. This platform is geared toward pro developers and supports highly customized solutions that go beyond ERP, enabling organizations to scale AI across the business.
Building an AI-Ready Supply Chain: Strategic Preparation
While the potential of AI in supply chain management is immense, realizing its benefits requires strategic preparation. Organizations must address three key areas:
- People: Building an AI-ready workforce involves upskilling employees to work alongside AI agents. This includes training on AI tools, fostering a culture of innovation, and redefining roles to focus on strategic decision making rather than manual tasks. AI readiness is not solely an IT responsibility; it represents a strategic initiative designed to equip employees across the organization with the knowledge and training necessary to use AI effectively.
- Processes: Transitioning to an AI-driven supply chain necessitates a review of existing workflows. Across the organization, you’ll need to re-envision how certain status quo business processes are executed and how AI can transform them. Identifying pain points and opportunities for automation is crucial. For example, organizations reliant upon on-premises ERP systems should prioritize cloud migration to unlock AI capabilities.
- Technology: Investing in scalable, integrated platforms like Microsoft Dynamics 365 is pivotal. Modern platforms provide the foundation for deploying AI agents and connecting disparate data sources, enabling a unified view of the supply chain.
How Forvis Mazars Can Help
AI is reshaping supply chain management, offering unprecedented opportunities for efficiency, agility, and innovation. By starting with prebuilt agents, leveraging tools like Copilot Studio, and strategically preparing for the AI transformation, organizations can position themselves at the forefront of this revolution. For supply chain leaders, the time to act is now by embracing AI to help drive operational excellence and gain a competitive edge in the marketplace.
Ready to explore how AI can transform your ERP strategy? Connect with professionals at Forvis Mazars today to discuss practical steps for deploying AI agents and building a road map tailored to your business needs.
Watch the on-demand webinar, “Revolutionizing Supply Chain Management With AI,” for demos and more in-depth discussion on these topics.
- 1“Evolving the Dynamics 365 ERP Model Context Protocol (MCP) Server,” microsoft.com, November 11, 2025.