The quest to improve supply chain costs is the kind of goal that should be at the top of any company’s list, and the bigger the supply chain, the more pressing the need. Fortunately, tasks like this are not nearly as complicated and daunting as they once were, thanks to SCM software’s advent. Supply chain management software can automate mundane tasks, improve transparency and communication, make it easier to identify flaws, and much more. To that end, here are five ways to improve supply chain costs in your business.
1. Reduce Product Packaging Costs
The packaging does a lot for your product, from giving your customers a first impression to protecting the product from damage during transit. It is also a bulk item that can easily be overlooked when considering costs.
Reducing the cost of your packaging is not just a matter of using different materials—though that affects the price—it can also mean reducing the size or configuration of the packaging, which allows for shipping more products in less space and reduces loading and unloading times. There are a dozen ways to cut even a simple box, and some layouts use more materials than others. Now might be a good time to revisit your packaging process and discuss whether new technology and assembly methods can improve your supply chain costs.
2. Forecast Demand
A failure to accurately predict your products’ demand can be expensive, whether your order too many units or too little. If you overproduce, you will have a lot of excess stock, paid for from your perspective, but not selling. If you underproduce, you will either miss out on potential sales or be left having to pay over the odds to meet the demand with whatever alternative deals you can find.
With SCM software, you can more accurately predict demand thanks to the wealth of data at your disposal. With every part of your supply chain linked in, no metric will be beyond your reach. Learn more about our built-in data tools for SCM.
3. Identify Inefficiencies
This is possibly the most significant step in reducing supply chain costs, identifying inefficiencies, and eliminating them. It doesn’t take a mastermind in business to understand that if you are producing items that create a lot of waste or shipping products in half-full trucks, you are paying more than you need to.
Identifying and improving areas where your supply chain can be more efficient will help you reduce your expenses significantly, whether that comes in changing logistics partners, changing manufacturing methods, or any number of other optimizations. This process may have started with mapping your supply chain in days past to get a full picture of every partner you rely on. But that’s no longer the case. Read more about alternatives to supply chain mapping in our previous article!
4. Improve Communication and Transparency
The damage that can be done to a business’s bottom line from a lack of adequate communication cannot be understated. Whether it comes in the form of delays going unreported, changes in demand not being passed down the line, or any number of issues can arise from a lack of communication. With SCM software, everyone in the supply chain can be kept in the loop.
5. Customer Service Improvements
With an SCM system, far more information is available to you at considerably less effort. This presents a golden opportunity to pass some information on to your customers and improve their overall buying experience. This improvement could come in the form of full delivery tracking, so they know exactly where their purchase is, or even just being able to reassure your customers about any compliance certificates met in the course manufacturing their product.