A business doesn’t just grow by increasing its profits. It also progresses and stands out by reducing its expenses. A supply chain is one big domain where there is a lot of room to cut costs and reduce cash outflow. In this two-part mini-blog series, we will discuss some measures you should consider to drive down your supply chain costs.
Make the Most of Available Space
Most of the time, the supply chain of an enterprise involves heavy costing because it uses rented warehouses. Using a warehouse on rent entails an overhead that can’t be controlled. Also, it doesn’t provide any direct value in terms of better margins or profits. Therefore, avoid getting additional warehouses and do better space management of the existing storage facility. There are many ways to optimize the space of your warehouse.
Leverage JIT Inventory Practices
Just In Time (JIT) inventory entails ordering items on an as-needed basis. In other words, JIT inventory practices can help you keep inventory holding periods in check. In terms of cost-saving, embracing JIT inventory practices play its part in multiple ways.
- It saves you cost in inventory movement
- You don’t have to pay the operating cost of dealing with excess inventory
- You can protect your operations from the inventory write-downs
Top-quality packaging can also cut down your supply chain costs. The outlay of good packaging is significantly lower than what you have to spend on managing product recalls due to damaged pieces, primarily due to shoddy packaging.
SimplyPurchasing is robust procurement management software that works on many fronts to improve organizational performance. Its consolidation and digitization of procurement processes also play a part in making your supply chain cost-efficient.