7 Cost Effective Supply Chain Management Strategies

If you own a business, or are in a senior managerial role at an enterprise, you are probably aware of supply chain management. The flow of goods and services that are relevant to a company will always require maintenance in regular intervals. When done effectively, this can significantly reduce overall costs, while driving profits upwards.

Fortunately, there are several ways to implement cost-effective supply chain management strategies into your business. All it really takes is looking at specific areas of your business, and going from there. Keep in mind of these seven cost-effective supply chain management strategies as you prepare for your next audit:

1. Perform an audit

In order to determine the best cost-effective supply chain management strategies, it’s best to perform a comprehensive freight audit. There may be specific areas that affect the flow of goods and services, causing your costs to be higher than anticipated. It doesn’t hurt to double check your bases. This audit allows you to get a better grasp of what still needs to be fine-tuned.

What parts of your company can be outright eliminated or improved? Are there any areas that can be entirely changed, to enhance efficiency? It is important to get as many opinions here as possible. Cutting supply chain costs will require input from all sides, and you can use a freight audit company to determine where to begin your cost-effective measures.

Supply chain costs can make or break the effectiveness of any business. They don’t, however, have to be a detrimental part of the company. By taking a deep dive into what works and what doesn’t, the audit will reveal what are the best cost-effective measures for your enterprise. Objectively analyze your operations, and tweak accordingly.

2. Employees

Don’t be alarmed – this cost effective chain management strategy does not involve cutting your staff! The individuals who staff your company are the most vital component of your business. As it pertains to supply chain management, this doesn’t necessarily mean you have to cut your workforce. In actuality, improving areas such as training, can send relative supply chain costs downwards.

Making your supply chain more cost-effective is possible by reaffirming your trust in your staffers. Invest in their professional growth, and you will build a more reliable team. This, eventually leads to a certain company cohesiveness, which will inevitably reduce supply chain costs as well.

3. Supply chain automation

Business is always changing. Modern-day companies, as a result, have had to eliminate outdated practices, in favor of automation. This is a significant boost to overall business, and helps with driving supply chain costs down.

If you are interested in getting some part of your company automated, contact a professional. They will be able to assess which components can be retrofitted accordingly. Once this is done, menial tasks won’t have to be worried about any longer. As a bonus, you will undoubtedly see relative costs in supply chain being reduced!

4. Analyzing demand

Inventory is another critical part of certain companies, and is never as black-and-white as one would believe. If you are looking for cost effective supply chain management, take a look at your current customer demand. This will be a great indicator as to whether or not you need specific inventories. Once you determine what your business requires, you are well on your way.

Customer and client demands will fluctuate, which affects inventory patterns on a monthly basis. Once you have determined the pertinent trends, you can accurately pinpoint the areas that can be removed. This leads to supply chain costs being significantly reduced overall.

5. Working with your supplier

Sometimes, you may come across an unexpected cost in your business. There may be many factors as to why this is the case, but the first thing to do is to check with your supplier. On some occasions, there will be an issue on their end, which translates to some hefty cost increases on your end.

The best way to handle this issue is to get familiar with your supplier’s system of management. Unexpected costs usually arise out of product drop-outs. Once you are able to detect these drop-outs before they manifest, you’ll be in a better position to administer your lead times. Supply chain costs, as a result, will be positively impacted.

6. Outsourcing

In some instances, a properly-functioning supply chain can be directly attributed to outsourcing. Relevant costs can be cut down, if you grant service providers the ability to manage some components of your business. However, it is important to do your research beforehand.

You’ll have to become very comfortable with how these providers conduct their services. Choosing the wrong one can be counterproductive, and can actually raise costs pertaining to your company’s supply chain. When the right provider is chosen, you will save a substantial amount of money.

7. Packaging

This may seem obvious, but a package needs to arrive to its destination in pristine condition. Poorly-packaged products have a greater potential to be damaged. This, undoubtedly, will have an impact on your supply chain costs. So, ensure that whoever oversees this part of the process mitigates the chances for packaging to be unstable.


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