Global LEAD Consultancy (Logistics Excellence Academics & Development): Learn Logistics : REDUCING COSTS AND IMPROVING EFFICIENCIES IN THE SUPPLY CHAIN

No matter what industry you are in. No matter what size of business you are. No matter where in the world you are based, you will have one overriding task. To meet customers’ requirements by getting the right products to the right place, at the right time, and in the right condition. However, limited space and demands to maximize inventory turnover, along with increasing pressures to gain better efficiency from resources conflict with this requirement.

First of all get your inventory counted and updated. Then set realistic min/max levels where needed and use demand/supply forecast where possible.
In order to make the process more efficient it is absolutely crucial to have mobile devices that a worker can leverage to both receive materials, and then pick to ship out of the company. Streamlining the movement of materials is critical to minimizing waste.
Use an ERP solution that enables you to optimize your Bill of Materials calculation.
Install KPI around critical areas. Understand and react on unsatisfied results. Create a culture that understands that corrective and preventive actions are needed to create sustainable results.
Inventory analysis is not limited to the ABC analysis, it must be complemented by XYZ analysis. Evaluating the final product mix leads to optimal inventory levels at the warehouse. Always consider the seasonal indices. It increases the efficiency of inventory facility management, determines highly profitable products without violating the principles of assortment policy. You can also identify key products and factors that affect the quantity of goods in stock and divide tasks among employees depending on their qualifications and experience.
Make use of mobile solutions as much as possible to avoid human errors.
Bar code data-collection systems provide enormous benefits for just about any business. With a bar code data-collection solution, capturing data is faster and more accurate, costs are lower, mistakes are minimized, and managing inventory is much easier. A bar code scanner typically can record data five to seven times as fast as a skilled typist. Keyboard data entry creates an average of one error in 300 keystrokes. Bar code data entry has an error rate of about 1 in 3 million. This benefit goes hand in hand with better decision making. With better information, you can gain opportunities and get the jump on competition.
Implement a workflow and budget control system. This will allow control of what is being spent and by whom. Following on from that, procurement catalogues could be used to control what products are purchased and from which suppliers, allowing you to better manage purchase pricing.
Ability to link transport cost from external transporter direct to the price calculation.
Real-time insight in operations using ERP solutions provides deep and detailed insight into supply chain transactions, movement of goods and enables fast reaction to management ‘exceptions’, when supply chain operations do not perform as expected. The ability to better manage demand with supply and implementation of pull based supply chain strategies enable manufacturing companies to greatly reduce costs and improve efficiencies. Deep real time supply chain integration further enhances these operational advantages.
Set clear goals for the supply chain and make sure all stakeholders understand their role in achieving these goals.
Look to find the right supply chain partners with the right tools to allow you to focus on what makes your company unique. Actively manage and hold your supply chain partners accountable to deliver on best-in-class metrics around price, delivery and quality. If your supply partners and your company have the right tools in place to communicate and objectively manage the entire supply/demand chain, you should see an improvement in efficiency and a strong bottom line impact.
If there is a hole in the floor where you shovel money, your process owners know where it is. Don’t just talk to them, establish an ongoing dialogue with them.
Define efficient cost control procedures and ensure they are followed.
Costs can be reduced and processes optimized only by having statistical information: where and what kind of costs emerge, that is, where they arise and accumulate. The analysis of this information can help to find out the reasons of their uprise and make the right decisions. In order to know where and what kind of the costs are generated, it is necessary to consider the best way of collecting information in systems and the level of detailed information. Systems must be able to have configurable algorithms, which can be used to calculate the required product demand.
Managing costs is all about understanding where costs are occurring. Activity based costing and actual costing methods can provide a more granular look into costs. With good information, better decisions can be made on where to focus to attain cost-reducing efficiency in operations.
Automation + Training. Training is very important for a successful implementation of new technologies/systems.
Import serial and batch numbers of purchased items from a spread sheet and load them into the registration form of your purchase order line. It is a fantastic time-saver!
More efficient picking routes, improving scanning devices to be more reliable and more intuitive views in the ERP-systems to monitor the whole process.
I once heard an executive from a tier one auto supplier say the most important aspect of his supply chain was transparency. If you have a problem, don’t try and hide it until you have it fixed, instead work with your customer immediately to inform them of the challenge and how you are working to fix it. In fact, he cited a number of times in which they were able to very quickly fix the problem for their supplier.
VMI - Vendor Managed Inventory to be implemented wherever possible. Efficient use of internet to link the stock levels for online access to the vendor through secured login.
Create relationships with suppliers that align incentives and smooth inventory flow across the entire network.
Introduce processes that can structure the purchase and items tied to a project and let the project manager have full control of the logistics status in a project logistics dashboard.
Connect with trading partners through web based portals.
Try to ship everything in full truckloads or container loads. Pay quicker terms for shipping if they forego a fuel surcharge. Keep checking rates and do not get comfortable with a constant/large supplier of product, trucking or material.

Reducing costs and increasing efficiency at the same time is definitely “a match made in heaven” for any profit oriented organization. Business organizations or employers will always welcome adapt any ideas linked to driving down costs. Especially, when it is related to supply chain. But whenever any efforts are made to save costs, it will intimidate the employees as they may feel that it might affect the state of their employment. However, all supply chain employees, with open minds should grasp the ideas and implement at their respective work area. Trust me, a successful implementation is a pride to oneself and will appear as a ‘hero’ in the organization.