How to Reduce Cost in Your Supply Chain?

Summary

In this video, Rob O'Byrne from Logistics Bureau shares expert tips for reducing supply chain costs, drawing from his experience with over 1,400 projects globally. Key strategies include conducting a cost-to-serve analysis to understand and optimize costs, tailoring customer service offers, implementing sales and operations planning for accurate demand forecasting, and critically evaluating warehouse efficiency and transportation services. For further insights, viewers are directed to the Logistics Bureau blog and a full-day coaching event in Sydney.

Takeaways

• 📈 Understand Your Supply Chain Costs: The first step in reducing costs is to know and understand them in detail through a cost to serve analysis.
• 🔍 Cost to Serve Analysis: This involves understanding the cost associated with delivering different product types to various customer types.
• 📦 Order Size and Customer Service Offer: Adjusting these can have a direct impact on cost to serve, and a one-size-fits-all approach is usually not effective.
• 🛒 Sales and Operations Planning (S&OP): Implementing S&OP can help forecast demand accurately and balance supply to ensure efficient service.
• 🏭 Warehouse Efficiency: Assess the flow through the warehouse and consider implementing slotting to improve efficiency.
• 🚚 Transport Cost Analysis: Evaluate the services being purchased for transport to ensure they are the most cost-effective for the business's needs.
• 🚛 Avoid Unnecessary Premium Services: Sometimes, cheaper transport options may suffice, such as next-day delivery instead of same-day or expedited services.
• 🌐 Global Experience: The advice is based on extensive experience with approximately 1,400 projects worldwide.
• 📚 Access More Information: Additional resources and guidance can be found on the Logistics Bureau blog.
• 🗓️ Upcoming Coaching Program: On October 26th, there's a full-day coaching program in Sydney featuring industry experts, which is a charity event.
• 🎟️ Limited Seats Available: As of the recording, there were only 21 tickets left for the coaching program, indicating its popularity and the need for quick action.

Q & A

What is the main focus of the video script provided?

The main focus of the video script is to provide tips and insights on how to save costs in supply chain management.

Who is the speaker in the video script?

The speaker in the video script is Rob O'Byrne from Logistics Bureau.

What is the significance of knowing your supply chain costs?

Knowing your supply chain costs is crucial as it helps identify areas where costs can be reduced and provides a foundation for a cost-to-serve analysis.

What is a cost-to-serve analysis and why is it important?

A cost-to-serve analysis is a process to understand the cost of delivering different product types to different customer types. It is important because it reveals opportunities to reduce costs and improve efficiency in the supply chain.

What are some factors that affect the cost to serve in the supply chain?

Factors that affect the cost to serve include order size, frequency, warehousing costs, and the method of delivery such as individual orders versus bulk orders.

Why is it suggested that a blanket customer service offer may not be suitable for all customers?

A blanket customer service offer may not be suitable for all customers because different customers have different needs and expectations. Tailoring the service offer to the customer's specific requirements can help reduce costs and improve satisfaction.

What is the role of sales and operations planning in supply chain cost reduction?

Sales and operations planning is a process that helps forecast demand accurately, balance supply, and ensure efficient service delivery, which can lead to cost reduction in the supply chain.

How can warehouse efficiency impact supply chain costs?

Warehouse efficiency impacts supply chain costs by affecting storage and picking methods, as well as the flow of products through the warehouse. Inefficient processes can lead to higher costs.

What is the common mistake people make when trying to reduce transport costs?

A common mistake is trying to negotiate lower unit costs with transport companies. Instead, the focus should be on assessing whether the service level purchased is appropriate for the needs, as sometimes cheaper services may be sufficient.

What is the event mentioned by Rob O'Byrne for further learning on supply chain cost reduction?

The event mentioned is a full-day coaching program in Sydney on the 26th of October, which includes small-group coaching sessions with industry experts on various topics related to supply chain management.

How can viewers access more information on the topics discussed in the video script?

Viewers can access more information by visiting the Logistics Bureau blog at logisticsbureau.com, where they can find articles, videos, and guides on various aspects of supply chain management.