There are 6 core areas to drive sustainable supply chain cost reduction
A smart rationalization of the product portfolio reduces complexity and cost across the end-to-end supply chain. This results in a streamlined and cost-efficient product portfolio that avoids erosion of the bottom line.
An in-depth procurement spend analysis can bring about significant savings. Collaborative spend management optimizes value for money while delivering business goals.
Operations Network Footprint
Enables finding the right footprint to produce and deliver products to the customer, by leveraging economies of scale and reducing unneeded space, labor and routing to optimize cost while ensuring service level requirements.
Stabilizes and optimizes the value chain across the end-to-end flow of the supply chain. Improves the working capital.
A focus on improving asset utilization and throughput or reducing maintenance costs and downtime leads to an improved bottom line.
Supply Chain Target Operating Model
Defines the optimal organizational structure for every aspect of the supply chain.
Once identified, key levers can be split into NOW, NEXT and BEYOND. This enables the immediate benefits of quick wins while also setting the course for a cost reduction roadmap that will generate ongoing and lasting improvements.
The implementation of cost reduction strategies also reveals potential improvements in the company’s operating model. Supply chain leaders should opt for a more cross-functional approach, moving away from one-off cost reductions towards recurring savings.