Reduce Supply Chain Costs

By reviewing all aspects of your business, it is possible you can reduce supply chain costs.

With all industries focused on the bottom line, cost saving is a hot topic for most organisations. In the past five years, businesses have increasingly looked at their supply chain to see how they can reduce supply chain costs. Large players like Amazon are also putting pressure on the rest of the market to lower costs while still delivering higher, quicker service levels. There are many areas where costs can be reduced in the supply chain process – some less obvious than others.

Key areas to focus on are:

Property & Warehouses

Warehouses is a hefty investment but can also save money if properly managed and handled. One way that property can reduce costs is by having more multi-client facilities. In the past, many have stayed away from multi-client facilities to avoid commingling with competitors. However, sharing space with other businesses means that costs are spread out among all customers in the facility, which can result in significant savings.

Make Better Use of Space

Making the most of the space you have will save you money at the end of the day. As you no doubt already know, storing inventory and supplies in your warehouse comes at a cost. Assess whether or not you’re making the most of the space you have. You just might discover that you could save some money by finding a space that’s more in line with your actual needs.

Labour Costs

Cutting labour costs doesn’t necessarily mean physically decreasing the number of workers on staff. Through smart management, labour costs can be reduced greatly without sacrificing any workers. Better management of a workforce can lead to less turnover and a more diligent team that in turn can decrease missed shipping deadlines and other occurrences that affect costs.

Automation

Automating processes in your warehouse isn’t part of some fad or shady trend. It can actually help you to accomplish your goal of reducing supply chain costs. Have a professional come in to do an assessment of your operations so that you can get suggestions as to how you can automate your operations to make things more efficient. A WMS can help you achieve your end goals.

Improve Visibility

The supply chain is no longer linear – it’s comprised of multiple touchpoints that increase the need for unshakable visibility. Strong forecasting software, along with a thorough understanding of your business to foresee seasonal peaks and changes in shipping demands, can aid in the avoidance of inventory and transportation cost issues.

By regularly looking at client demand patterns to see whether or not something needs to be tweaked. You may find that patterns change from month to month or from season to season, and you can use this information to make more accurate supply ordering decisions.

Streamline Ordering Process

You need to make your ordering process as efficient as possible. This means at least a couple of things. Use a single software package for completing requisitions or else you might encounter situations where employees using different applications end up ordering too much of specific products or inventory supplies. Another thing to keep in mind is that you need to implement an approval process so that nothing gets ordered without the consent of designated officials. These simple steps will help you to reduce supply chain costs.

Secure Packaging

The better you package your products, the less likely your products will be damaged when shipped. Ensure that whoever is responsible for this function properly packages and stacks your product so as to avoid, or at least minimize the chances of, damage.

State-of-the-art Technology

Another way that organisations can cut costs is by implementing new technologies such as the latest cloud WMS solutions. New technologies may cost more in the upfront but typically the return on investment is high and can save companies thousands of pounds.

From using RFID technology for inventory tracking to using software designed specifically for warehouses with multi-level decision makers, your IT expenditures (or the lack thereof) can influence your ability to build a profitable warehouse business.

Some other new technologies that have recently surfaced that are saving 3PLs money include the lithium ion battery, manned AGV forklifts and automation tools.

Outsourcing

Outsourcing is one option you can consider if you want to reduce supply chain costs. Of course, you’ll need to conduct proper due diligence to ascertain whether or not service providers under consideration have the ability to provide enough of a productivity and efficiency benefit to justify your out-of-pocket expenses for such services. Under the right set of circumstances, an outsourcing arrangement can lead to substantial savings and a property functioning supply chain.

Utilising business data

Make sure to tap into the wealth of insights your internal information provides. Pulling data from several sources like parcel, transportation, warehouse, labour, and payroll departments creates a big data scenario, empowering you to get better information and make smarter decisions. Notably, integrating data from several sources provides a comprehensive view so you can more accurately plan inventory in your network. With business intelligence integrated into your planning, you can have more confidence that your network is not creating bottlenecks that slow down delivery and increase costs. Your WMS will supply you with a wealth of information resulting in reduce supply chain costs.

In Summary

Cost saving is an important aspect of any business, but it is important to not cut corners when trying to cut costs. Every aspect of the supply chain should be open to investigations, as uncovered revenue opportunities could be substantial. It is in an organisation’s best interest to examine everything from your logistics providers and shipping methods to the placement of inventory in your warehouse. Chances are you’ll be surprised at just how efficiently you can run your business and enabling you to reduce supply chain costs at the same time.

About us:

Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.

Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.

ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.

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