Logistics Management System: Do You Really Need One and How Much Does It Cost?

We get it. Your entire operations will be going to run on that single software. Any wrong decision will not only cost you millions but also impact your customers’ trust. Therefore, making the right decision is important. We can help.

What is a Logistics Management Software?

The success of your entire supply chain operations depends on two things- how smooth the deliveries are, and how you maintain the inventories. A logistics management system helps you in both.

It lets you control multiple aspects of logistics management, from warehouse management to last-mile delivery. The software not only brings these operations together but also people handling each such as your suppliers, sales team, and inventory supervisors.

But the Question is- Do You Really Need It?

Think about the everyday challenges you face in managing logistics such as:

• Tracking products in your inventory
• Monitoring orders, shipments, and deliveries
• Communicating with your supplier and vendor network
• Tracking the fleet location and fuel usage
• Dealing with manual errors in order processing 
• Struggling with timely deliveries

You might not be facing all of these challenges. But even a single one can increase your logistics and transportation costs. It can also deeply hurt your bottom line and customer satisfaction.  

A logistics management system is the way to overcome these challenges. It digitalizes the manual process and reduces the need to invest in multiple software like order management solutions and so on. Having logistics software also cuts the hidden costs that come with manual processes and errors.

Also Read: The Cost of Developing Transportation Management Software

What Makes a Logistics Management Software All-in-One Solution?

The software comes with key features to manage your logistics and supply chain operations. It lets you

1. Manage Orders

Whether your orders are coming from online channels or offline, tracking and managing them is easy with a logistics software. Its order management feature helps you receive orders faster, schedule their delivery, and quickly process the payments.

2. Track Inventories

Keeping the right number of parts in stock is tricky. Too few, and customers wait. Too many, and money gets wasted on storage. Logistics software lets you track parts in real-time, across all your locations. This lets you know exactly what you have, so you can order just what's needed and avoid both stockouts and wasted space.

3. Manage Warehouses

If your warehouses are located at multiple locations, managing all of them will be like a headache. How would you know whether products are stored at optimal temperature or are in safe condition?

Investing in a separate warehouse management software would ease your job but it's costly. Get logistics management software that lets you keep an eye on all your warehouses at once and in real-time. It helps you in effectively storing the goods and making them readily available for distribution.

4. Reduce Order Delays

Usually, an order is delayed or missed due to the long or inefficient routes that drivers follow. This not only means frequent delays but also increases expenses on fuel and gas. Logistics software helps in finding the fastest route for your drivers to deliver parts, saving on gas and time.

5. Forecast Future Demands

Neither your sales would be same nor your customers’ demand. With changes in the market and price inflation, the demand will change too.

Investing in a custom logistics management software equipped with AI technology helps you look into future demands. This saves your money on product procurement as you will be aware of products your customers actually need.

6. See a Clear View of Operations

Getting real-time insights into the orders, deliveries, and inventories has been a real challenge for a long time. Imagine if you could see the current status of all the inventories, even those far distant, from your system.

Logistics software lets you see everything clearly on a single dashboard. It provides detailed reports and analytics on your key operations helping you find ways to save money.

7. Select the Right Carrier and Freight

Logistics software helps you compare prices from different shipping companies, so you can choose the cheapest and fastest option for each delivery.

Also Read: 2024 Inventory Management App: Guide, Benefits and Cost

The Cost of Logistics Management Software

The cost of a Logistics Management Software (LMS) depends on several factors. A few of them are:

• Features: Ready-made software will undoubtedly be cheap, but it may not have features specific to your operations. More comprehensive and custom software with advanced functionalities will cost more but it saves money in the long run.
• Deployment Model: Cost also depends on where your solution is deployed. If it is cloud-based, you may have to pay lower upfront costs with subscription fees. Whereas on-premises logistics management software is expensive due to additional setup and maintenance expenses.
• Company Size: A logistics software development company often offers tiered pricing plans based on your business needs and type of operations.
• Number of Users: Another factor that affects the cost of the logistics management system is the number of users using it. Some offer a per-user option while others offer limited user choice.

Conclusion

In the era of fast orders and delivery, not having a logistics management system is the biggest disadvantage for businesses. It’s not just another tool to manage your supply chain operations but a critical asset for your overall success.

Although there is an initial cost, the potential for significant cost savings is very high. With improved efficiency, businesses can expect a strong return on investment (ROI) in the long run.