How Can I Reduce Supply Chain Costs?

Do you want to reduce supply chain costs? It’s at the top of the priority list for most manufacturers, and it’s easy to understand why. One weak link in the supply chain and BOOM- bring on the stress, delays and worst of all, loss of money. Never fear; here are 3 easy tips to consider when re-evaluating your supply chain and the areas where money can be saved.

Lighten the load

According to Inbound Logistics, it’s common for manufacturers not to equate transportation cost reductions with total available supply chain savings, but it should definitely be considered! A smart and efficient way to gradually reduce costs is to actually spend more on intermodal drayage while holding less inventory. This keeps your goods moving in and out quickly, and you don’t have to pay for anything to sit overnight in a warehouse. It also reduces risk of theft since cargo isn’t stuck in one place for too long. Got obsolete inventory? Keep on top of the customer demand for your products and get rid of whatever has been sitting and collecting dust.

Pay attention to time between processes

The supply chain is an intricate system, from ordering supplies to producing goods, stocking, packing, labeling and more. Each process much flow from one to the other smoothly to maximize efficiency, but the in-between from one process to another is also where delays can unexpectedly pop up due to miscommunication, inadequate planning or inaccurate data. An effective way to combat inefficiency is to implement collaborative planning, forecasting and replenishment (CPFR), an idea that integrating joint practices can greatly enhance the supply chain.

Use multiple suppliers

A little bit of healthy competition never hurt anyone, right? Incorporating not one, but multiple suppliers on your orders can help reduce costs on your supply chain by canceling out issues that crop up when depending on one sole supplier, such as receiving products late. By relying on multiple suppliers, not only are products moved quickly, but you have peace of mind knowing that if a problem arises and a supplier falls through, another will be at hand as a backup to supplement your inventory immediately.

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