For those budding entrepreneurs and CEOs who are looking out for ways to save on supply chain costs are lucky to read this post. In this post, we’d like to detect sixth essential areas to keep an eye on to reduce supply chain costs.Profits for your business can skyrocket if you gain adequate savings in supply chain costs. It’s wrong to say that you can yield substantialannual savings, but it depends on the size of your business.
Let’s briefly explore here a guide to supply chain management.
No matter the industry you’re looking out for cutting supply chain costs, be it consulting, travel, airline, hotel & tourism or automobile industry, supply chain plays a pivotal role.
Don’t say that you need to be a corporate giant for saving big on the supply chain. Let’s discover these areas that offer significant saving opportunities irrespective of your business size.
1. Customer Service
Don’t give your customers what you imagine. Instead, let them have from you what they really need.
Remember, the needs and requirements of your customer should cultivate your supply chain structure and strategy. So, avoid costs for things that your customers don’t want or for which they see no value.
For instance, why do you provide next-day delivery to every customer – even though not every customer needs it? You’re wasting money on express transport.
2. Supply Chain Strategy
Have a clear understanding of your customers’ needs. Setyourobjective to fulfill them. Develop your strategy based on goals. Then, let the objectives drive tactics.
It means your supply chain strategy shouldn’t be fixed. I should be flexible enough instead. It should cater to evolving business and customer needs so that you can drive optimal tactical and operational decisions.
3. Supply Chain Market Research
Supply chain market research is a raw material to observe industry trends and conduct industry analysis. The report consists of data and analysis of the most influential current and future trends that will shape the industry.
Find reputable supply chain market research companies like SI-Insights is to have in-depth industry market research in a logical, user-friendly format. It will let you have growth and profit forecasts for years to come.
4. Sales and operations planning (S&OP)
S&OP is a process. It helps share information and brings people together in a structured, single plan that is defined across the functional departments.
With the S&OP process, you can easily set frequent changes to your demand plan and master production schedule and make poor forecast accuracy. Bear in mind that when you learn to improve the situation within your business, you will speed up your growth.
5. Supply chain network design
Let the ditch of costs and trust widen. You need to keep reliability up and costs down. And, you can do this by designing your network and thereby, minimizing product handling.
Have You Read About: A Beginner’s Guide to Supply Chain Management
Think about the shape of your physical supply chain network. Make sure if it is based on your customers and your suppliers.
Understand your customer base and the service you provide them on one end and the location of your suppliers on the other. Doing so enables you to dictate where you hold stock to service your customers.
If your suppliers are farther away, they may encounter problems in serving customers on right time. And on the other hand, you’ll need to have the additional manpower to deliver your service in every particular area. Thus you’ll be paying extra. So, customers and suppliers shouldn’t be much far.
To sum up, driving success and reducing supply chain costs isn’t that easy. But, buy following the tips above, you’ll be able to minimize huge amount usually spend on the supply chain.