HIGH FIVE

"A supply chain must be adaptable to change"

Oliver Bohm, CEO, DB Schenker India on five ways to cut logistics costs

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Published 5 years ago on Feb 22, 2016 Read
Vishal Koul

Define supply chain strategy: Objectives should drive strategy and strategy should drive tactics – not the other way round. A supply chain strategy is a living thing. It must be adaptable to change so as to meet evolving business and customer needs, and it needs to be flexible enough to drive optimal tactical and operational decisions, in turn saving costs.

Understand customer dynamics: To understand the dynamics of your customer base, it is important to design your service offerings to meet their needs at a sensible cost. If you fail to identify customer needs correctly, you will supply the wrong service at the wrong cost. It is of crucial importance for business to implement a logistics strategy that will help keep service levels at their highest at all times, no matter what changes might be happening in other areas of the business organisation.

Reduce inventory by automated processes: Companies often stock excess inventory because they lack supply chain visibility. To effectively reduce excess inventory, you have to gain reliable information on future orders. Besides, automation of the trade compliance process helps speed up the cycle times associated with tasks being performed manually, such as document preparation, and eliminate the associated errors.

Ensure asset utilisation: Get more productivity out of fewer assets. As a general rule, the more assets you can use within any 24-hour period, the better. Underutilised assets, such as vehicle fleets, facilities or inventory, mean inefficiency and poor return on investment. Changing the way assets are used or whether they are owned or leased can resolve these issues.

Control your procurement process: By implementing a process-based workflow that includes tracking and managing order acceptance, consolidating invoices, creating shipments and generating documents, the procurement process can be streamlined effectively. Also, you need to extend that process to trading partners, reduce cycle times, cut supply chain execution costs and better support compliance initiatives.

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