The Top 5 Challenges Logistic Companies Face


Have you heard of the name Ever Given? That ship ran aground in the Suez Canal in 2021 and blocked one of the world’s most used sea-based logistics routes. 

This resulted in delays for many ships carrying products from Asia to Europe and vice versa. It greatly impacted global trade, with about $9.5 bn worth of trade being held up daily because of the blockage. 

This is why logistics businesses must run smoothly and efficiently to deliver products to their destinations at the right time and in the proper condition.

But like any business, logistics businesses also face various challenges. Let’s look at a few logistic companies’ challenges:

Challenge 1: Inefficient Transportation Management:

Transportation management is vital to the logistics ecosystem. If the transportation process is hindered or delayed for any reason, it could create a lot of challenges for businesses, customers, and the economy as well. 

This is why it is essential to have systems that can monitor and manage transportation for logistics businesses to make it more efficient. This is why logistics businesses should explore building custom software platforms like VISSIM to become very useful and help improve efficiency for logistics transportation management.

Here are a few ways transportation management can be improved for logistics companies using custom software solutions:

Custom software can be used to track the location of the vehicles on a real-time basis to ensure complete visibility of the delivery process of the products from their source to their destination. 

Most logistics companies have a fleet of vehicles for the delivery process. Managing this fleet of vehicles is challenging, and it becomes easier to manage them using custom software-based solutions, which can track the locations and keep an eye on consignments, vehicle maintenance, driver management, etc. 

Challenge 2: Inventory Management Woes

Inventory management is critical for businesses to take full advantage of product demand. But to do this effectively, they need to have the complete support of the manufacturing and logistics partners. If any of these partners fail to deliver on their commitments, they lead to enormous losses for the business.

Running out of stock and needing more stock replenished in time is the biggest challenge for businesses regarding inventory management. Companies must work with their logistics partners to balance going out of stock and being left with too much stock.

One way to solve this challenge is to use custom software to help capture and make sense of the data regarding the sales of one or more products. 

Challenge 3: Warehouse Management Complexities

All product-based businesses need warehousing to store their inventory from the manufacturing base. The most significant disruption in retail has been in the delivery timelines, which has changed the expectations of today’s customers to receive the products as soon as possible. 

This means businesses can no longer have a central warehouse and then ship their product to their customers, which usually takes time. Today, companies must work with multiple warehouses to get the product out to their customers as quickly as possible. This means warehouse management has become much more complicated than a few years ago. 

Along with that, the global market has become easily accessible to every business and consumer. While this has been great for companies, it has opened up newer challenges around the traceability of the inventory on a global scale. 

This is where custom software solutions can track inventory availability in various warehouses and the movement of the products to create a complete view for the business to see their efficiency better.

Challenge 4: Order Fulfillment Bottlenecks:

Order fulfilment is a series of processes that are set in motion once the customer orders a product from a business, which results in a chain of events which includes checking the inventory for the product in the nearest warehouse, packaging the product, identifying the correct delivery partner and ensuring accurate delivery.

Have you ever ordered something and received something else? That’s one of the challenges with the order fulfilment process and is discouraging many Norwegian consumers from choosing payment options like Cash on Delivery. These inefficiencies create many challenges for businesses as they cannot track the exact movement of the individual product through the order fulfilment process.

Custom software solutions can help businesses by enabling a method to track each product in the order fulfilment.

Challenge 5: Inaccurate Demand Planning:

This point connects to inventory management, but more than the physical planning of where to store and how to move the inventory of your business products, it focuses on how your customers perceive the demand for their products at any given time. 

Inefficiencies in demand planning can result in issues for businesses, which might make them lose profits and have challenges retaining their brand position with their customers. 

The solution to challenges like this is better access to data analytics through custom software solutions built for your business to gather data about your potential customers to plan your demand and inventory and warehousing based on it. 

As you can see, the logistics chain has challenges (as in any business). Every product business needs to think about each step of the logistics process and ensure they have worked through the solutions. 

Ideally, custom software is built for your purpose while keeping your requirements in mind, which can help you track the transportation of your product, keep an eye on your inventory in real-time, manage your warehouses in a better way and accurately plan your demand will ensure that your order fulfilment process goes smoothly resulting in happy customers and repeat business. 

Companies like Vector Software have immense expertise in building custom software solutions for business logistics management and can help your business succeed from day one.

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