Top 7 Supply Chain Challenges That Business Central Overcomes

With constant changes in the dynamic environment of supply chain logistics, organizations can face unforeseen challenges to both profitability and productivity. Businesses are rapidly adopting agile methodologies to strategize the way they operate.

However, there is room for everyone to sustain their business by remaining highly competitive, with the right tools and technologies. Microsoft Dynamics 365 Business Central is a powerful all-in-one platform that helps small and mid-sized businesses to navigate the supply chain issues.

In this article, we will explore the top seven supply chain challenges that can be overcome by Business Central.

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Top 7 Supply Chain Challenges

Companies are being thrown off balance by fundamental shifts in markets, supply networks, and customer behavior. Major challenges faced by supply chains globally, include the following.

Let's look how each challenge can be overcome by dynamics 365 business central:

1. Data Compliance

Data compliance and its traceability are two crucial aspects of supply chain management. A variety of data are frequently exchanged throughout supply chains, including delivery routes, client information, financial data, and product specifications.

Moreover, businesses frequently have trouble keeping track of their products along the supply chain, guaranteeing the quality and safety of their products, and adhering to legal regulations. Any supply chain's success depends on the preservation of this delicate and sometimes quite important data.

2. Demand Forecasting

Demand forecasting is essential to supply chain management because it enables businesses to foresee market trends, make informed decisions, and maximize their available resources. For most firms, however, understanding the complexity of demand forecasting may be an overwhelming and time-consuming effort.

Globalization and geopolitical factors, changing buyer preferences, and an ever-greater dependence on data expose organizations with several difficulties in forecasting demand.

Moreover, inaccurate demand forecasting can lead to overstocking or stockouts, resulting in lost sales and increased costs.

3. Inventory Holding Cost

One of the biggest expenses a business has in reaching targeted service levels is inventory holding costs. 15–30% of the overall inventory value is considered a reasonable baseline for inventory holding costs. These costs are primarily divided into four categories:

  • Capital

Purchase-related expenses, financing charges, and interest rates on loans for purchases are all considered capital costs.

  • Service

Investments in software, technology, taxes, insurance, labor costs to provide these services, etc. are all considered service costs.

  • Storage

Rent, overhead, opportunity costs for storage, safety inventory levels, and other considerations are included in storage expenses.

  • Inventory Risk Costs

Shrinkage, obsolescence, and the possibility of unanticipated events causing harm to inventory into consideration.

Source: latentview

An example representation of the inventory holding costs for a retailer

4. Planning and Replenishment Process

Your replenishment and planning process becomes more complicated with each new location and channel. You must be forecasting demand for each shop and channel independently, as opposed to predicting demand for one store and a small number of SKUs.

There are several factors specific to each channel and location that will affect your replenishment, such as:

  • Demographics
  • Consumer Preferences
  • Local Competitors
  • Product Seasonality
  • Distance to a Distribution Centre
  • Shipping Time
  • Shipping Cost

5. End-to-End Visibility

A major difficulty for many firms is supply chain management (SCM), which is intricate, time-consuming, and occasionally frustratingly opaque. Obtaining the best return on investment (ROI) necessitates firms, no matter how big or small, to balance spend activities, logistics, risk management, and supplier relationships.

Unfortunately, without end-to-end supply chain visibility, one or more of those balls might fall off, which will have expensive repercussions.

6. Costly Supply Chain Operations

Profit margins are being squeezed as expenses rise across the whole supply chain network. There are numerous sources of these costs, and a lack of transparency and accountability for cutting them, lead to an increase in operating costs. The primary contributors of rising expenses are:

  • Growing cost of fuel for products transportation by air, sea, or road
  • The rising cost of raw materials due to rising commodity prices.
  • Increased labor expenses from manufacturers and suppliers
  • Intricate global logistics resulting in increased costs for product management, storage, and transportation

7. Increased Demand for Transportation of Goods

In the years plagued by pandemics, the e-commerce sector has grown at a rate never seen before. In addition, companies now serve a worldwide clientele rather than just the local one.

The need for the transportation of completed goods and raw materials has grown as a result. With consequent shortage of raw materials and increased demand for transportation of goods, leading to delays at ports.

How Business Central Overcomes Supply Chain Challenges

With its highly adaptable and rich features, Dynamics 365 Business Central is a complete business management solution to streamline all your supply chain challenges.

It is a user-friendly ERP, that is fast to implement, easy to configure and enables companies to manage finance, sales, shipping, project management, warehousing, inventory and more.

1. Meets Supply Chain Expectations

Supply chain management-focused businesses must overcome several obstacles, including managing several warehouses, selling through multiple channels, and using logistics tools to track shipments.

Customers want services to be more immediate and of higher quality, and businesses must live up to these expectations. With Microsoft Dynamics Business Central and its supply chain management tools, the planning, purchasing, inventory, warehouse, and sales functions can be operated effectively, providing clients with goods or services on time.

2. Offers Supplier Collaboration

Effective collaboration with suppliers is essential for a smooth and efficient supply chain. However, many businesses struggle to establish seamless communication channels, share information, and coordinate activities with their suppliers.

Business Central offers robust supplier management capabilities, allowing businesses to streamline communication, track supplier performance, and manage procurement processes effectively.

With integrated communication tools, automated workflows, and real-time supplier visibility, Microsoft Business Central enables businesses to establish strong relationships with their suppliers, improve collaboration, and drive supply chain efficiency.

3. Automates Time-consuming Processes

Manual and time-consuming processes can hinder the agility and responsiveness of a supply chain. Tasks such as order processing, inventory management, and production planning often involve manual data entry, paper-based documentation, and repetitive tasks, which are prone to errors and delays.

Business Central automates key supply chain processes, eliminating manual data entry and streamlining operations. By leveraging intelligent workflows, barcode scanning, and integration with IoT devices, Business Central enables businesses to automate repetitive tasks, reduce errors, and improve overall efficiency.

4. Simplifies Multi-location Management

Managing multiple locations in a supply chain can be challenging, as each location may have different stock management procedures, product offerings, and accounting rules. Coordinating activities and maintaining consistency across different locations can be time-consuming and complex.

Business Central simplifies multi-location management by providing a centralized platform for inventory management, order processing, and financial reporting. With configurable processes, automated workflows, and real-time data synchronization, D365 Business Central helps businesses streamline operations across multiple locations, ensuring consistency and efficiency.

5. Mitigates Supply Chain Disruptions and Manages Cost

Supply chain disruptions, such as natural disasters, pandemics, or political unrest, can have a significant impact on business operations. These disruptions can disrupt the flow of goods, cause delays, and increase costs.

Microsoft Dynamics Business Central helps businesses mitigate supply chain disruptions by providing real-time visibility into inventory levels, production capacities, and transportation routes.

With this visibility, businesses can proactively identify potential disruptions, develop contingency plans, and make informed decisions to minimize the impact of disruptions on their supply chains.

6. Leverages Data Analytics and Insights

Data analytics and insights play a crucial role in optimizing supply chain performance. However, many businesses struggle to extract meaningful insights from their data due to limited analytics capabilities and disconnected systems.

Business Central leverages advanced analytics and reporting capabilities to provide businesses with actionable insights into their supply chains. With pre-built dashboards, customizable reports, and AI-powered analytics, Business Central helps businesses identify trends, spot opportunities for improvement, and drive data-informed decision-making.

Microsoft Dynamics 365 Business Central offers a comprehensive solution to overcome the exhaustive supply chain challenges faced by businesses today.

With its end-to-end visibility, demand forecasting capabilities, supplier collaboration tools, process automation, multi-location management features, and advanced analytics, Business Central empowers businesses to optimize their supply chain operations, improve efficiency, and drive growth.

By leveraging the power of Business Central, organizations can navigate the complexities of supply chain management with confidence and stay ahead in today's competitive business landscape.

Streamline your supply chain and boost profitability with Microsoft Dynamics 365 Business Central. You can drop us an email at or call us directly at +1 281 899 0865.

Get in touch with your trusted Microsoft Dynamics Partner today!

Arish Siddiqui

Arish Siddiqui working with Dynamics Square and helps SMB/Enterprises in USA & Canada to use Dynamics 365 ERP/CRM, Power Platform and other Solutions with full of its capabilities which ultimately cut businesses costs and improve efficiency.


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