Supply Chain Cost Reduction

The pressure is on

Constantly.

To reduce costs.

Competition seems greater, companies are swallowed up in acquisitions, and ‘cheaper imports’ seem to threaten your very business survival.  So where can we look to cut costs even more?

This is the ‘race to the bottom’

A race that ends in ever decreasing circles, with the ‘winner’ left gasping with fragile margins and the rest in some kind of train wreck strewn out behind them.

The smart players don’t even join the race of course.  Because it’s the wrong race to be in. 

You see, once you’ve cut all the costs that you can cut, through productivity improvements, through the use of technology and through merely doing things ‘smarter’ there is nowhere left to go.  Where to then?  The only way now, is to start cutting back on quality and service.  And that can lead to a slow and painful death for any business.

Supply Chain CompetitionNo; the right race, is the one that continually ‘raises the bar’ in terms of quality and service.

Once you’ve tackled the productivity, technology and smarter ways of working, it’s this race that puts you ahead of the pack.

Because it’s a ‘double whammy’.  (I’ll explain that in a moment)  But it’s a harder race to run and that’s why many don’t even get across the start line.

It requires you to really understand your customers.  What they want, what they desire, what they hunger for.  And then aiming to give it to them.

Most customers don’t want cheap

They want quality, they want value and they want great service.  For a shining example go and have a look at your local Kmart store!  Particularly one of the newer stores.  It’s simple and effective. Quality, value, service.  And to deliver that combination requires a highly efficient and effective Supply Chain that doesn’t just happen by accident.

Whatever business you’re in, think about how you can start to ‘raise the bar’.

And why is this race a double whammy?  Well, it goes like this:

As you build better quality, value and service than your competitors, your customers start to buy more.  This leads to even better efficiencies in your Supply Chain and higher sales.  Lower unit costs and improved top and bottom lines.  The ‘double whammy’ that keeps putting you even more ahead of the pack….

Let them run the race to the bottom. 

You should set your sights on the race to the top.

 

 

Rob O'ByrneBest Regards
Rob O’Byrne
Email or +61 417 417 307

 

 

 

P.S. If you still haven’t grabbed a place for our free June Seminars in Brisbane, Sydney and Melbourne, there are just a few seats left:

Details here: Supply Chain Education

Lots of tips on Boosting Supply Chain Performance.