The Biggest Challenges in Logistics & How Microsoft ERP Software Solves Them?

Logistics is the backbone of global trade, which delivers goods from suppliers to consumers. However, managing logistics operations comes with a plethora of challenges such as delayed deliveries, high operational costs, inefficient tracking, and complexities arising due to compliance. These problems can cause financial loss, customer dissatisfaction, and penalties from regulators. Hence, for businesses to remain competitive, they require a sturdy solution, like Dynamics 365 for logistics, that enable proper visibility and optimum resource allocation and ensure proper delivery processes.

In the blog, we will discuss the major challenges faced by the logistic business and its solutions with Microsoft ERP Software.

Top Logistics Obstacles and Its Solutions 

The logistic industry has to pay for various operational hurdles such as lack of coordination among deliveries, increased transportation costs, and inefficient communication systems. They require addressing these issues so that the supply chain will operate smoothly, costs can be reduced, and customer satisfaction is attained. Here are the list of challenges and its solutions using Microsoft Dynamics 365.

Deficiency of Synchronisation for Multiple Deliveries

Delivery coordination has always been a headache. Ineffective coordination usually results in delays, additional costs, and unsatisfied customers. Effective coordination towards multiple deliveries is hard to accomplish in businesses because they struggle to track delivery schedule, routes, and availability of delivery personnel.

The Solution: Dynamics 365 for Logistics helps you leverage its routing and scheduling capabilities. Using AI and machine learning, it can optimise the deliveries within the given time matrix and maximise optimal cost operations. Such deliveries also contribute to the minimum operational costs through the most efficient design of their routes and proper utilisation of other resources.

For example, a delivery company with overlapping deliveries used Microsoft Dynamics 365. Its route optimisation capabilities enabled an optimised delivery schedule, thereby achieving 20% lesser transportation costs and increasing customer satisfaction.

Lack of Clear Visibility in Tracking Shipments

Companies have difficulty offering customers real-time information, which, in turn, translates into customer frustrations and losing confidence in the product use. This leads to a great deal of disruption, including loss or delays during transport.

The Solution: Dynamics 365 solutions, like Microsoft Business Central and Dynamics 365 Supply Chain Management, offers end-to-end and real-time shipment tracking. Based on IoT sensors and GPS, it helps companies do real-time shipping tracking. It is, therefore, an overhaul introduction to transparency and lowering of lost shipments. Moreover, it enables the company to take corrective action during transport to resolve any problems affecting customer satisfaction.

For example, a retail company has always received complaints from customers regarding the lack of status updates on their cargo. But when it added Microsoft ERP Software, they could provide real-time tracking updates, reducing the volume of inquiries by 35% and restoring trust.

Late or Incorrect Deliveries

It can hurt a company image and lead to customer dissatisfaction. Erroneous processing of orders, inefficient inventory management, and poor delivery scheduling are some few headaches business faces.

The Solution: The order management and fulfilment feature of Microsoft Dynamics 365 enhances the chances of accurate and timely deliveries. Automated workflows and real-time inventory updates minimise the chances of errors and delays. It streamlines the entire order-to-delivery process for business, providing improved reliability towards customers and building a long-standing relationship with them.

For example, an e-commerce venture frequently faces delivery errors. However, they go for ERP implementations along with Microsoft Copilot that reduced delivery errors by 40%, which greatly improved customer retention.

Rising Fuel and Fleet Maintenance Costs

Logistics companies usually incur massive costs for fuel and maintenance, leading to profit loss consequently. Poor route planning and a lack of preventive maintenance only fuel these costs.

The Solution: Fleet Management tools in Dynamics 365 for Logistics help business optimise fuel use and maintenance scheduling. Predictive Maintenance functions lessen downtime and stretch the lifetime for the trucks. This system also makes the decision based on analysis sourced from a variety of vehicles. This tells you about when maintenance is due thus avoiding costly breakdowns and enhancing the efficiency of operations within the fleet.

For example, a firm engaged in logistics that faced high fuel expenses used AI agents within Microsoft ERP Software to optimise routes and monitor the health of its vehicles, obtaining a 15% reduction in fuel costs and healthier lifespans for its vehicles.

Poor Communication Between Customer and Courier

Poor communication leads to misunderstandings and delays, affecting customer satisfaction. Your customer doesn’t get the notification of the delivery window, lack of response for inquiries, or ambiguous delivery instructions. A reliable communication system would keep customers updated on the delivery status instead of leaving them completely in the dark.

The Solution: Dynamics 365 enables an easy and efficient channel of communication between customers and couriers using automated processes. The built-in systems allow for real-time feedback. The status of deliveries, the estimated time of arrival, and tips about delays are communicated to customers, so that they are never out of the loop.

For example, a courier service received numerous complaints about a lack of delivery updates. After Dynamics 365 was adopted, customers received timely notifications, which reduced missed deliveries by 25%.

Regulatory Compliance

Moving through the thick forest of various regulations problems may take time and become difficult. The noncompliance can cause severe consequences, such as mammoth fines from the authorities or laws that may put a business at risk.

The Solution: Dynamics 365 helps a business process comply with regulatory requirements, as it automates compliance checks and cognitive regulatory updates. The chances of noncompliance or penalty imposition will be reduced. Besides, compliance reports may be generated from this system; thus, in the time of an audit, it will be easy for the businesses to prove their compliance with rules.

 For example, a pharmaceutical company had to comply with stricter and stringent regulations. With the help of Microsoft Copilot, they automate compliance reporting with almost 50% less manual effort for reporting, thus ensuring compliance with industry standards.

Inventory Management

Poor inventory management can lead to stock outs or overstocking. Inaccurate inventory data can lead to missed sales or may cause excess inventory which ties up precious capital.

The Solution: Dynamics 365 offers super robust solutions to solve the problem of inventory management with real-time inventory tracking, demand forecasting, and automatic replenishment. By maintaining optimum inventory levels, carrying cost will be reduced. When accurate inventory records are maintained, better decisions about purchase and stocking can be made, improving overall efficiencies.

For example, a manufacturing company was struggling with inaccurate inventories. After implementing Dynamics 365 Business Central, inventory accuracy improved by 30%, contributing to carry cost reduction and stock-out prevention.

Low Efficiency in Employee Management

Managing a huge workforce had so many inefficiencies that it increased the total cost of labour. Scheduling staff, tracking performance, and processing payroll could all be very tedious and prone to error without proper tools.

The Solution: In Dynamics 365, you would find human resource management tools that assimilate employee scheduling, performance tracking, and payroll processing into one easy click. This would enhance workforce efficiency while reducing administrative overhead. By automating routine HR processes, businesses are now able to economise their time and effort into strategic projects that build growth and employee fulfilment.

For example, a warehouse had trouble scheduling staff in an effective manner. They were able to automate scheduling and performance tracking through Dynamics 365, resulting in a productivity lift of 20%.

Trust Factor and Social Responsibility

Trust-building and evidence of social responsibility are the two critical things that modern organisations need to work on. Customers and stakeholders alike are increasingly expecting companies to adhere to ethical and sustainable practices.

The Solution: Microsoft ERP Software enhances a company's initiatives in social responsibility by maximising the aptitude of sustainability tracking and reporting. Transparency in the way they operate and maintaining standards of right conduct enables a company to earn trust and assurance from its customers and stakeholders. The system provides accurate tracking of sustainability parameters, such as carbon footprint and resource usage, which are critical in assessing success.

For instance, retailers are attempting to make their supply chains more sustainable. They were able to optimise their supply chain using Dynamics 365 to reduce waste, improve brand image, and, as a result, attract environmentally conscious clients.

Unlock Logistics Efficiency with Dynamics Square

For an organisation to fully benefit from Microsoft Dynamics 365, it should be strategically implemented. Dynamics Square, being one of the selected Microsoft Solutions Partner, offers you customised ERP system to improve supply chain efficiencies.

With specific solutions in system integration, automation, and AI-driven insights, Dynamics Square helps businesses move and smoothly transit to Dynamics 365. It optimises fleet management, real-time shipment tracking, compliance automation, and seamless workforce scheduling.

Call us on 0207 193 2502 or email us at info@dynamicssquare.co.uk now to improve your logistic efficiency!