Are you giving what your customers want when they need it? If yes, then you’re on the right track. However, if the answer is no, your end-to-end supply chain needs optimization.
An optimized supply chain is vital to achieving optimum efficiency in your business. To ensure you can provide the highest quality and timeliest products possible to your customers, you must run an efficient supply chain that offers accuracy and visibility. Some business owners might focus more on growing their revenues that they tend to overlook their expenses. Nevertheless, there are effective ways to make sure that your supply chain is cost-effective. And that is by optimizing your operations without pumping up costs.
What is Supply Chain Cost Optimization
Supply chain cost optimization is the effort to manage and control supply chain costs properly to get the best possible return while securing a steady supply. This can be achieved by identifying the total cost of ownership rather than the lowest supply chain costs. With this, suppliers can estimate the costs and evaluate service tradeoffs to the complexity of supplying goods to customers. In fact, SellerPlex can help optimize your supply chain by getting our end-to-end Operation and Supply Chain Services. Our team of experts aids you in finding opportunities to cut costs, improve cash flow, and grow your business.
An ideal supply chain would source the right amount of raw materials shipped directly to a business’ facility. And when processed, the goods would be sent to distribution centers to deliver timely to customers.
But this is not what happens in reality.
Most of the time, things don’t go as planned and unexpected instances occur, such as manufacturing holdups, late deliveries, inbound and outbound stocks exceeding expectations, as well as inaccurate sales forecasts. Since supply chains are extremely complex, it’s difficult to determine what’s going on unless everything’s already done. Thus, you need to know how to master and improve supply chain cost optimization.
How to Pull Off a Successful Supply Chain Cost Optimization
To effectively optimize supply chain cost, it’s crucial to align business value with efficient supply chain operating outcomes. Additionally, supply chain leaders must learn how to engage with their stakeholders and suggest initiatives that acquire cost improvements.
Here are a few smart tips to master supply chain cost optimization:
Manage supplier inventory
Share demand information with your suppliers, so they can do their own demand planning and guarantee you that they are optimizing their inventory management as well. The information needed are forecasts with defined timeframes that convert into order or blanket orders. Not doing this means your suppliers take the risk of not carrying enough or having too much inventory to meet your needs.
Moreover, understanding your suppliers’ lead times is also significant in managing their inventory. You must be able to understand the exact time they need to supply you their products in case you increase your demand abruptly. And to make things easier for you, SellerPlex can assist you in handling your inventory, so you stay in stock, save money, and have stress-free transactions.
Maximize the use of your space
Storing your inventory and supplies in a warehouse comes at a price. Hence, better make the most of this space. You can take an assessment of your warehouse and determine if you’re doing it right. If you find ways to reorganize your inventory, then this can save you money and help you be more efficient in maximizing the use of your space.
Track your performance
Optimize your supply chain cost by tracking or measuring your performance. Analyzing your key performance indicators (KPIs) helps you set trackable ways to reach your goals and identify realistic targets. Also, performance tracking gives you precise forecasts for stock renewals, logistics, and base supply.
Implement inventory control
One of the main goals of each business is to have a 100% inventory accuracy. In order to accomplish this, you need to conduct physical inventories and at the same time regular, systematic cycle counts. It’s necessary to utilize a tool to create balance as well as implement a cycle count program to test its accuracy.
Without 100% inventory accuracy, you won’t be able to deliver items to your customers on time. The lack of it means that you’re either buying products you don’t need or buying items you already have on hand.
Create robust customer demand planning
Minimize expedited charges and other logistics expenses that drive up your end-to-end supply chain cost by creating a robust customer demand planning. Use your customer’s demand information as a starting point to know what they want and when they want it. Even more, you can do a lot in this kind of demand planning environment, like using market analysis, history, seasonality, and other factors that help you understand your customer needs more than they do.
Focus on the customer
Considering your supply chain structure and strategy, the needs of your customers must be a top priority. If you focus on them by offering various options, such as unlimited free shipping with paid monthly membership or next-day delivery, then you give them the choices they want and they’ll be satisfied with it. This way, you avoid customer complaints and issues that could lead to unnecessary additional expenses.
Help your business optimize your supply chain cost with these tips specified above. Supply chain cost optimization can keep your business running smoothly and achieve growing profits. Are you ready to take on the challenge? Reach out to us today to schedule a free discovery call via https://sellerplex.com/schedule-supply-chain/!