Some ways with which one can cut the supply chain costs
What alternatives will you look for If you’re looking to cut the supply chain costs? Would you cut a deal with your current supply chain partner or find a cheaper supply chain partner? Supply chain network design can deliver a significant reduction in supply chain costs and improvements in service levels by better aligning supply chain strategies.What if you can follow such cost reduction strategies to benefit yourself. Have a look at some of these strategies:
1. Improve Space Utilization: It costs you money to keep supplies and inventory in a warehouse. What you should do is try to conduct an analysis of how well you are using your storage space, you may find that you are paying for too much space or not utilizing the space you are having aptly.You will find that you are wasting money paying personnel to search for stored items. However, A more efficient storage strategy could reduce the amount of space you use. This could result in reduced rent and payroll costs.
2. Use Multiple Suppliers:
If you are using one supplier, you are eliminating competition for your orders. You should find several suppliers who can compete on price, and try to use several of them at all times so that you can avoid costly delays in receiving products. Suppose one supplier is out, the another one can have the items, though you must have a reliable one like Holisol Logistics
. Use of multiple suppliers will protect you from spending money for less-than-satisfactory service.
3. Asset utilization: One of the smartest thing one can do is work on getting more productivity out of fewer assets. It’s a general rule, the more assets you can use, the better. Underutilized assets mean inefficiency and poor return on investment. Hence, Changing the way assets are used or whether they are owned or leased can resolve all these issues.
4. Move Supplies Faster:
If you can find ways to accelerate shipments from suppliers, you can order closer to the time you need the supplies. Ordering far in advance will incur warehouse costs because you need to store them so that they’ll be available, and products are more likely to get damaged. In order to be more customer-centric e-commerce company
, You can examine whether you can shorten the time it takes you to transport supplies. Transportation from the supplier can add days or weeks to your supply chain which will ultimately increase costs.
5. Performance Measurement: You should measure what is strategically important for your business so that you can manage and improve it. What really matters to your business is your supply chain objectives. That’s what you need to manage, regularly and consistently, in order to set realistic targets for improvement. You can choose the corresponding key performance indicators that let you measure your performance against your targets. You can also embed them in the culture of your organization and make sure that they are there to serve your objectives and not the reverse. Not to forget that different organizations will have different KPIs. What works well for one may not be relevant for the another, so resist the temptation to copy what another company uses.
Supply chain costs don’t have to drag you down. Just think strategically and put up a plan to cut down the expenses and you will dramatically benefit the bottom line of your organization.
is a blogger by profession and a web analyst. Her writeups are generally based on the SCM and its respective applications. You can connect with her through Twitter