I’ve had several blogs dedicated to the Supply Chain and ways to help reduce or help alleviate disruptions. I came across a very interesting article from Garner, a technology research and consulting firm, discussing the different methods and or levers as described to help optimize your supply chain costs.
I’m totally in agreement with this point from the Gartner article, “It’s important to align your internal business value (profitable growth, customer experience, supplier compliance and sustainability) with efficient supply chain operating outcomes (demand fulfillment, product supply and new products/business).”
As a result, retailers and manufacturers must reimagine their logistics operations and adjust inventory and transportation strategies to successfully navigate a new shipping landscape and provide a satisfactory customer experience.
As a visual example –
Additionally, here are the five levers that would make sense for most businesses to achieve cost improvements:
- Minimize pricing & waste
- Adjust your procurement tactics for optimal supply-demand balance
- Design and enable processes and roles for efficient network operation
- Align supply and distribution network to product and service demand – another means of JIC, Just In Case – as a inventory control practice I spoke about in the previous May 2022 blog. (The Current Supply Chain Climate)
- Align product and service offerings with customer value and aligned market competition
These five actions would help during disruptions within an organization faced with having to make tough strategy decisions, such a as layoffs, cuts in capital investments or discretionary spending. Your organization’s Logistical and Supply Chain executives must establish ongoing cost management disciplines that are continually focused on cost optimization from the level of procurement to the final delivery of goods. With this and continued process improvement, and coupled with driving innovation, you’re in a much better position for success at lower risk.
At AMS we are continually engaged in executing on these practices. It not only helps keep costs in line but also provides more reliable services with much better customer satisfaction ratings.
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About the Freight Freak: John Bevacqua is the former VP of Logistics at AMS Fulfillment. He currently serves, in semi-retirement, as Logistics Advisor. His area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.