Unpredictable obstacles to profitability and productivity might arise for firms due to the ever-changing nature of supply chain logistics. In order to plan their operations, more and more businesses are embracing agile approaches
Yet, given the correct resources, any company may thrive and grow. Small and medium-sized organizations can benefit greatly from Microsoft Dynamics 365 Business Central, an all-in-one platform that is robust and designed to assist with supply chain management.
This post will examine the seven most common issues with supply chains and how Business Central can address them.
For an easy-to-understand rundown of speedier and more secure methods to work with data in Business Central, get in touch with our specialists.
7 Supply Chain Challenges
Markets, supply chains, and customer behaviour are undergoing fundamental shifts, which is causing firms to be off-kilter. Some of the most significant problems that supply chains around the world encounter are:
To see how Dynamics 365 Business Central gets over each obstacle, let’s have a look:
1. Ensuring data compliance
Two essential components of supply chain management are data compliance and its traceability. Supply chains are constantly exchanging a wide range of data, such as delivery routes, customer details, financial information, and product specs.
It is not uncommon for companies to struggle with supply chain visibility, product safety and quality assurance, and regulatory compliance. The security of this sensitive information is crucial to the smooth operation of any supply chain.
2. Demand forecasting
Businesses can’t manage their supply chains effectively without demand forecasting, which helps them anticipate market trends, make educated decisions, and make the most of their resources. However, it may be a daunting and time-consuming task for most organizations to comprehend the intricacy of demand forecasting.
Organizations have multiple challenges when trying to predict demand due to geopolitical and globalization concerns, shifting consumer tastes, and an ever-increasing reliance on data.
In addition, stockouts or excess inventory due to erroneous demand projections can cause sales to drop and expenses to rise.
3. The Cost of Holding Inventory
Keeping inventory on hand is one of the most costly ways for a company to meet its service goals. Typically, inventory holding costs should be between fifteen and thirty percent of the total inventory value.
There are mainly four types of these expenses:
- Capital Expenses include anything from purchase-related costs to financing charges and interest rates on purchase-related loans.
- Costs associated with providing service include the money spent on things like software, hardware, taxes, insurance, labour, etc.
- Storage costs include rent, administration, opportunity costs, safety inventory levels, and other factors.
- Consideration of Inventory Risk Costs Consideration of obsolescence, shrinkage, and the likelihood of unforeseen events damaging inventories.
4. Replenishment and planning processes
Adding extra locations and channels makes your replenishment and planning process more challenging. You can’t just predict demand for one store and a handful of SKUs; you need to break it down by channel and shop.
5. Complete Transparency
Complex, time-consuming, and sometimes vexingly opaque supply chain management (SCM) is a big challenge for many businesses. No matter the size of a company, optimizing ROI requires careful balancing of spending, logistics, risk management, and relationships with suppliers.
A costly consequence might result from one or more of those balls dropping off the table if end-to-end supply chain visibility is not in place.
6. Expensive Operations in the Supply Chain
As costs increase throughout the supply chain, profit margins are becoming increasingly narrow. Operating expenses rise due to a lack of openness and responsibility in reducing these costs, which have multiple origins.
The main reasons why costs are going up are:
- The rising cost of fuel for transportation by land, sea, or air.
- The growing expense of inputs is a result of generalized increases in commodity prices.
- Suppliers and manufacturers face higher labor costs
- Complex international logistics leads to higher expenses associated with product administration, warehousing, and shipping
7. A Rise in the Need to Transport Goods
The e-commerce industry has experienced unprecedented growth in the years marked by pandemics. Furthermore, businesses no longer limit themselves to serving only local customers; they increasingly aim to have a global reach.
Consequently, there is a greater demand for the transportation of both finished products and raw materials. Consequently, there will be a scarcity of raw materials and a surge in the demand for goods to transit, which may cause port delays.
Also Read: Emerging Trends in Dynamics 365 Supply Chain Management in 2024
How Does Business Central Handle Difficulties in the Supply Chain?
You can simplify all of your supply chain issues with Dynamics 365 Business Central, a comprehensive solution for company administration that is both highly customizable and feature-rich.
Quick to deploy and simple to set up, this enterprise resource planning (ERP) system helps businesses with a wide range of tasks, including accounting, sales, shipping, project management, inventory, and warehousing.
1. Realizes Supply Chain Goals
Companies that put an emphasis on supply chain management face a number of challenges, such as juggling many warehouses, selling through various channels, and keeping tabs on shipments with logistics software.
Businesses need to meet the expectations of their customers for faster and better services. Timely delivery of goods or services to clients is possible with the help of Microsoft Dynamics Business Central’s supply chain management features, which allow for efficient operation of the planning, purchasing, inventory, warehouse, and sales operations.
2. Provides Opportunities for Supplier Work
For a supply chain to run smoothly and efficiently, suppliers must be effectively collaborated with. Having said that, many companies have a hard time getting their suppliers on the same page, sharing information, and coordinating tasks.
With Business Central’s powerful supplier management features, companies may improve procurement process management, supplier performance tracking, and communication efficiency.
Strong supplier relationships, improved cooperation, and efficient supply chains are all within reach with the help of Microsoft Business Central’s integrated communication tools, automated workflows, and real-time supplier visibility.
3. Eliminates Manual Tasks
Labor-intensive manual procedures may jeopardize a supply chain’s responsiveness and agility. Manual data input, paper-based documentation, and repetitive operations are common in order processing, inventory management, and production planning; these processes are prone to mistakes and delays.
Business Central streamlines businesses by automating critical supply chain procedures, and doing away with manual data entry. Businesses can automate repetitive activities, decrease errors, and enhance overall productivity using Business Central’s intelligent workflows, barcode scanning, and interaction with IoT devices.
4. Makes Managing Multiple Locations Easier
Because every link in a supply chain may have its own unique inventory management processes, product catalogue, and set of accounting regulations, managing a network of sites can be no picnic. It can be difficult and time-consuming to coordinate activities and keep things consistent across numerous places.
By consolidating order processing, financial reporting, and inventory management into one platform, Business Central streamlines management across several locations. In order to ensure consistency and efficiency across several locations, D365 Business Central helps organizations streamline operations with configurable processes, automated workflows, and real-time data synchronization.
5. Keeps Costs Down and Supply Chain Disruptions to a Minimum
Natural catastrophes, pandemics, and political instability are all examples of supply chain interruptions that can greatly affect company operations. These interruptions have the potential to delay shipments, raise prices, and halt the flow of commodities.
By displaying inventory levels, manufacturing capacities, and transportation routes in real-time, Microsoft Dynamics Business Central helps firms avoid interruptions in the supply chain.
Because of this transparency, companies may anticipate any interruptions to their supply chains, prepare for them, and make educated decisions to lessen their impact.
6. Uses Analytics and Insights from Data
When it comes to improving the efficiency of the supply chain, data analytics and insights are vital. Unfortunately, a lack of robust analytics tools and interconnected systems makes it difficult for many companies to get useful insights from their data.
Businesses can gain valuable insights into their supply chains with the help of Business Central’s comprehensive analytics and reporting capabilities. Business Central’s pre-built dashboards, customisable reports, and analytics driven by AI make it easy for organizations to see patterns, find areas to improve, and make data-informed decisions.
Conclusion
Businesses nowadays confront extensive supply chain concerns; Microsoft Dynamics 365 Business Central provides a comprehensive answer to these problems. Businesses are able to optimize their supply chain operations, enhance efficiency, and drive growth with the help of Business Central’s end-to-end visibility, demand forecasting capabilities, supplier cooperation tools, process automation, multi-location management features, and advanced analytics. Businesses can confidently handle the intricacies of supply chain management with the help of Business Central, allowing them to thrive in today’s cutthroat business environment.
