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How to Effectively Reduce Supply Chain Costs

One of the main goals of manufacturers is to reduce supply chain costs. There are numerous ways to meet this challenge by avoiding common mistakes that often start with inventory. Want to learn how to reduce costs with your supply chain? Check out these helpful tips.

Less is more….and the less inventory you’re holding, the better. A safe and effective way to gradually reduce costs is to actually spend more on transportation. According to Inbound Logistics,  manufacturers today don’t consider equating transportation cost reductions with total available supply chain savings. This is a mistake that can cost you, because transportation for most manufactured goods is only about two to five percent of the total cost and it can make a big difference on savings in the long run.

Don’t let processes crash….and cost you money that can easily be saved. The supply chain is made up of smaller processes, from ordering supplies to producing goods, stocking, packing, labeling and more. When one process ends and another is set to begin, this in-between is where delays can occur and costs and be incurred due to insufficient communication, planning and inaccurate data. An effective way to combat inefficiency is to implement collaborative planning, forecasting and replenishment (CPFR), an idea that integrating joint practices can greatly enhance the supply chain.

Don’t rely on one supplier….instead, use multiple suppliers. Having competition on your orders reduces costs on your supply chain and helps you avoid delays when receiving goods, which is not possible with a single supplier. Use several at a time to keep products consistently moving, and moving fast. If one supplier falls through, you’ll have others ready to supplement your inventory immediately.

Don’t let supply chain efficiency get you down. America 1 Logistics can help you cut costs and save time because we are a team of drayage professionals with vast experience and networking capabilities to ensure success without the added stress. Contact us today and let’s discuss your logistics goals and get a free quote.

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