Many companies think of a supply chain as an expense. However, in reality, the supply chain is the heart of the business and is essentially what is responsible for all profits. A company could not survive without the supply chain to bring the goods or materials to the warehouse, no more than they could survive without the supply chain to distribute them to the stores. In this sense, your supply chain is directly responsible for making you money, but you need to handle it in a cost effective manner. Without prudent planning a supply chain can rack up many expenses that are unforeseen. Or worse, they can slow down to a crawl and make the distribution of your products much more complicated.

There are many places to cut costs in the supply chain without compromising on speed. For example, you may be able to save money by switching international freight carriers or by shipping your products in a more sensible manner. Although it may sound like a small move, international freight can add up quickly, especially if you’re moving large quantities of goods across many borders. Another place to look is local transport. If you can ship your products in a more sensible manner locally, you can save many transport costs there as well. In all likelihood, you’ll have to work with a local shipping company to ensure that this goes smoothly.

Of course, there are also the actual warehousing costs to look at. Remember that holding onto stock costs money. You must keep the warehouse operating and any stock that sits there is taking up space that could be used by other stock. As such, one place to cut costs is to design your warehouse efficiently. Another way to cut costs is to reduce the products that sit in the warehouse for extended periods of time. You definitely don’t want to be stuck paying for warehouse space to store products that won’t be shipped out years into the future. Keeping inventory that moves is a far better option. While this might not always be something that you have full control over, it definitely is worth trying for.

All in all, there are some good ways to save money on the supply chain. Companies, however, are often unwilling to take the plunge because they feel like cutting on the supply chain also sacrifices quality of service. However, as can be seen by the suggestions above, this certainly need not be the case. There are many ways to cut on the supply chain without sacrificing service. The more tips like the ones above you can apply to your business, the less money it will cost in the long run. Please remember that the tips offered above are just a starting point. You must analyze your whole supply chain from start to finish to get a comprehensive picture of where you can start cutting costs. Saving on your supply chain should be a crucial goal, and we hope that the above tips will allow your business to prosper in ways that it never has before!

by Joseph Marando - Impulse Products