Guides / Reducing Supply Chain Costs

A complete guide to reducing costs in the Supply Chain

This guide provides an introduction to reducing costs across your Supply Chain

1. Introduction

During these challenging times, nearly every business will be looking to reduce their Supply Chain costs. But doing so can put your Customer Experience at risk. This guide presents a structured approach to reducing costs across your Supply Chain while maintaining a fantastic customer experience. It emphasizes getting the right products to the right customers faster through optimization, deeper customer insight, a clear supply planning strategy, and a data driven approach.

There are 8 different areas to focus on when trying to reduce costs across your supply chain and companies that master all 8 of them are well positioned to truly deliver excellent customer experience while running a very efficient supply chain.

These are the 8 key areas to focus on when working to reduce costs across your supply chain. These areas include:

2. How to optimize Logistics and Logistic Costs

Optimizing your Logistics and reducing Logistic Costs is one of the first levers you can pull.

There are several ways to reduce logistics costs. Some potential strategies include:

3. How to improve forecast accuracy?

We all know that forecasting is one of the key drivers of inventory optimization (which leads to cost reduction). Improving your forecast accuracy can massive reduce costs. If you reduce the number of times you over-forecast, you end up with less excess stock; if you reduce your under-forecasting, you reduce the number of stock-outs.

To improve the accuracy of your demand forecast, there are several steps you can take. Here are a few suggestions:

4. How to reduce excess stock?

Excess stock takes up space in your warehouse and requires you to spend money on storage and other holding costs. By reducing excess stock, you can free up space and reduce these costs. This helps improve cash flow: Having excess stock ties up your capital, which could be better used elsewhere in your business. By reducing excess stock, you can free up cash that can be used to invest in other areas of your business or to pay off debts.

There are several ways to manage excess stock, depending on the specific situation and the needs of the business. Some potential options include:

5. How to optimize my inventory controls and planning?

Optimizing inventory is important for several reasons. Here are a few:

There are a number of ways you can Optimize your Inventory:

6. Focus on the Key Products

It’s challenging to view hundreds, or even thousands, of inventory items and make informed decisions that effectively manage volume and purchasing – determining precisely what to buy, what’s running short, and what’s overstocked.

The best way to establish these parameters is to classify items correctly, as this will allow you to focus on the 20% that gives you 80% of your sales.

Classifying your products with ABC classification can help you make more informed decisions about how to manage your inventory. Here are a few reasons why this is important:

Tools such as Remi AI automatically classify your products for you, enabling you to quickly focus on the Products that matter the most.

6. Reduce Warehouse Costs.

There are several ways that you can reduce your warehouse costs. These are the key suggestions:

6. Collaborate with your Key Suppliers.

Suppliers represent a key cost across your supply chain. By collaborating with them more closely, especially by sharing information of your upcoming requirements, it can help them better anticipate your needs, consolidate orders and potentially reduce costs.

There are several ways that you can collaborate with your suppliers to improve your operations and achieve your business goals. Here are a few suggestions:

In summary, reducing costs across your Supply Chain and increasing general efficiency is an important objective. But you need to ensure that you do so while maintaining a fantastic customer experience. If you focus on improving Supply Chain Visibility through a data driven approach, then technological improvements will enable you to reduce costs while maintaining the customer experience.

Closing Remarks

In summary, reducing costs across your Supply Chain and increasing general efficiency is an important objective. But you need to ensure that you do so while maintaining a fantastic customer experience. 

If you focus on improving Supply Chain Visibility through a data driven approach, then technological improvements will enable you to reduce costs while maintaining the customer experience.

Find opportunities in your data