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How to Reduce Costs in your Supply Chain without Affecting your Customer Satisfaction

The lack of data necessary to fully understand what is actually going on across the Supply Chain ope...

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Posted by Dave Food on Jan 10, 2018 6:47:54 PM
Dave Food

The lack of data necessary to fully understand what is actually going on across the Supply Chain operations is the reason why CFO cannot make the right decision to cut the high cost of their supply chains. Inventory, physical distribution centres, equipment, transportation, and labour, are the main areas where Supply Chain cot is highly impacted. Therefore, the first place most CFOs look to reduce costs is to lower inventory levels resulting in the worsening of customer satisfaction.


How to Reduce Costs in your Supply Chain without Affecting your Customer Satisfaction

 Many companies turn to Supply Chain planning solutions to facilitate management in their daily planning, organising, staffing, directing, and controlling the utilisation of available resources, to move and store materials into, within, and out of a warehouse, while supporting staff in the performance of material movement and storage in and around a warehouse, to better understand where costs can be saved and revenue increased through improved Supply Chain management practices and technology. Supply Chain Visibility is a very useful tool, as it provides:


  • Supply Chain Visibility provides a high-resolution look at Supply Chain activity, from sourcing to customer delivery; the use of it, to quickly adapt their logistics plans to current demand.
  • Reduce business and Supply Chain risk due to disruptions and Supply Chain complexity.
  • Reliable Supply Chain Visibility for all in-transit and on-hand inventory.
  • Production visibility.
  • Improve lead times and performance.
  • Real-time information about production status, whether or not manufacturing is outsourced.
  • On-hand visibility - real-time visibility across all stages in the Supply Chain can significantly increase speed to market, reduce capital expenditures and manage risk,
  • Identify shortage and quality problems along the Supply Chain.
  • Visibility into landed costs of globally source goods.
  • Determine true costs of products by the time they arrive at destination.

Moving toward a Demand-driven Supply Chain is probably the single most important step a global manufacturer can take today. In the ideal world of a Demand-driven Supply Chain, flow of product to the end customer and from the furthest upstream supplier, is synchronised to provide a smooth and efficient flow of material. In this ideal, the Supply Chain is also responsive to variations of demand.

The rise in Supply Chain disruption - originated from technical, human factors, or natural catastrophes - have caused enormous losses to a lot of businesses. It is not surprising that most organisations are expending significant efforts to develop effective Disruption Management strategies. Low cost (and lean) supply chains to control costs, has also resulted in magnifying the impact of even a small disruption at any stage of the chain.

Once the disruption is discovered, how does a firm effectively recover from a disruption? The foundation for a solid Supply Chain Risk Management Program includes: improved knowledge of where the disruptions may occur, and training to know when and how to respond. The level of awareness of the potential for disruptions, and the capability to respond, is the single greatest preventive action that organisations can take to prevent the effects of a major disruption from disrupting global operations. This can significantly reduce the uncertainty, and thus, the need for large buffers of safety stock.

Good Labour Management through engineered practices, accurate monitoring and personalised coaching leads to greater job satisfaction, improved moral, and reduce turnover. Retail store workers get little more than rudimentary training on how to perform their jobs. Supervisors and store managers can teach workers the best way to perform their tasks in order to achieve the goals set by your organisation.

A robust TMS can handle all aspects of transportation for you, providing extensive logistics order management that forms the core of a Supply Chain Visibility system, enabling optimisation of inbound and outbound moves and ensuring efficient consolidation and routing, and executing the transportation plan with low cost portal-based carrier integration, reducing transportation cost; a more predictable, reliable service is achieved.

When CFOs consider ways to reduce Supply Chain costs, there is an assumption that any savings cannot come at the expense of reducing customer service levels. The combination of greater efficiency, labour productivity, and better Customer Service from improved transportation management, will create better satisfied customers who will continue buying from you, recommend your business to others, and may buy a larger assortment of your products, therefore, leading to higher revenue.

In today’s consumer-driven economy, customers expect the same low prices and great service regardless of how they choose to interact with your brand. To fulfil customers’ needs retailers should count on advanced Supply Chain management practices and technology. Inventory optimisation and supply chain network analysis are important tools to address and optimise Omni-channel retail practices.

Outsourcing (the strategy, implementation, hosting and even the daily operation of your Supply Chain applications) to vendors who specialise in these areas, can augment your IT and operations while bringing expertise not available in-house. Experience can be deceiving, so, hire the specific Supply Chain expertise you need to get the best results from your implementation. They can help you reduce costs, increase revenue and improve service levels.




Dave Food

Prophetic Technology

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