Despite disruptive events and setbacks, delivery volumes keep getting higher due to ever increasing demand and widespread ecommerce availability. In this environment, it becomes a business imperative to realize operational and cost optimization of supply chains in order to ensure profitability and efficiency. Here are a few key ways to optimize supply chain costs.
1. Developing Market Awareness
Organizations need to ensure they have a robust understanding of the market and consumers in a rapidly shifting landscape to identify opportunities for improvement. A qualitative and quantitative aspect-based rapid assessment, coupled with a segmentation exercise to adapt supply chains, can help businesses gather valuable insights. The ability to maintain the right balance between costs and service levels comes only with a thorough understanding of market and consumers.
2. Encouraging Partner Transparency
One of the key aspects of effective customer base management is ensuring reliable supply chain transparency across partners. Gaining insights on where costs fit into the industry, especially with respect to competitors, can enable businesses to understand two things –where costs need to be controlled and optimizations that need to be applied. This also creates supply chain-wide visibility in terms of costs and enables businesses to target and apply specific control measures.
3. Realigning supply chain network and footprint
A better understanding of disparate service level requirements can allow businesses to drive end-to-end optimization across the network, including manufacturing, distribution, and global trade. Organizations can realign their logistics and manufacturing operating model, implement smart-factory elements, and even review global trade footprint to optimize custom duties, total landed costs, and leverage any available free-trade agreements.
4. Vetting Supply Chain Partners
Businesses should take extra care to identify and select partners they can associate with for the long term. Bringing in trusted supply chain partners enables businesses to add value to their customer base and enhance profitability. It is critical that the first few engagements are carefully examined to understand where a prospective partner stands in terms of attaining common ground for a long-term and fruitful partnership.
5. Embracing Digital Transformation
Modern, cutting-edge technological offerings can serve as key drivers of efficiencies as well as cost optimization. Cost-effective controls and solutions can be applied across the supply chain with real-time visibility and data obtained with the right digital tools. Deploying end-to-end SC technology can also improve outcome planning. It is of little surprise that areas like automation, IoT, blockchain, robotics, and more are seeing a surge in investment from leading adopters.
