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Supply Chain Cost Reduction – 5 Key Levers.

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Supply Chain Cost Reduction – 5 Key Levers

There are several ways to reduce costs in the supply chain, some of which include:

  1. Optimizing transportation routes: By analyzing shipping data and identifying the most cost-effective routes, companies can reduce the distance and time required for shipments, which can lower transportation costs.
  2. Implementing a just-in-time (JIT) inventory system: JIT systems help companies maintain lower inventory levels by ensuring that materials and products are delivered to the warehouse just as they are needed, reducing the need for storage space and minimizing the risk of stockouts.
  3. Leveraging technology: Companies can use technology such as automated inventory management systems, barcode scanning, and RFID tracking to improve the efficiency and accuracy of warehouse operations, which can reduce labor costs.
  4. Outsourcing non-core activities: By outsourcing non-core activities such as warehousing and transportation to third-party logistics providers (3PLs), companies can reduce costs associated with maintaining and operating their own facilities.
  5. Collaboration: Companies can work with suppliers to optimize the supply chain, for example, by sharing data and jointly identifying cost-saving opportunities.

Continuous improvement can help companies to reduce costs in the supply chain by:

  1. Identifying areas for improvement: By regularly reviewing and analyzing supply chain data, companies can identify areas where costs can be reduced.
  2. Implementing cost-saving measures: Once areas for improvement have been identified, companies can implement cost-saving measures such as those listed above.
  3. Measuring progress: By regularly monitoring progress, companies can ensure that cost-saving measures are having the desired effect.
  4. Continuously monitoring and improving: By continuously monitoring and analyzing the supply chain, companies can identify new opportunities for cost reduction and make further improvements over time.

In summary, there are several ways to reduce costs in the supply chain, and continuous improvement is a key approach to achieving cost reduction. By regularly reviewing data, implementing cost-saving measures, measuring progress, and continuously monitoring and improving, companies can reduce costs and improve their supply chain operations over time.

This is a discussion on various ways to reduce supply chain cost.  It is a six minute video.

Procurement Training.

Negotiation Quotes

  • “Appraisals are where you get together with your team leader and agree what an outstanding member of the team you are, how much your contribution has been valued, what massive potential you have and, in recognition of all this, would you mind having your salary halved.” ~ Theodore Roosevelt
  • “Negotiation is not a policy. It’s a technique. It’s something you use when it’s to your advantage, and something that you don’t use when it’s not to your advantage.”  ~ John Bolton
  • “Know what you want to achieve prior to starting to negotiate. It’s the golden rule but the one most people fail to heed. Without a plan, you allow the opposing party to define your goals instead of the other way around.” ~ Ivanka Trump
  • “The most critical thing in a negotiation is to get inside your opponent’s head and figure out what he really wants.” ~Jacob Lew
  • “There are people who are in debt that make $500,000 a year.  There are people who have all their bills paid with no debt who make $50,000 a year.  It’s easy to negotiate an “increase in your salary” just change your spending habits.” ~ Dave Waters

supply chain cost reduction