Supply chain management companies exist to control the chaos - to create specific procedural events based on a meticulous timeline all within a synchronized network of transportation units. Add to this a cumulative reduction of operating costs with inclusive financial improvement and the nee
Reduced purchasing costs: Retail companies rely heavily on their supply chains to efficiently and quickly deliver products to customers to evade expensive holding fees in respective warehouses.
Overall production costs decreased: Production shutdown can accumulate upwards of $20,000 per minutes and millions of dollars each day in lost profits. To combat this, manufacturers trust the authority of supply chains to deliver parts to affiliated plants for assembly in a timely manner.
Decreased supply chain costs: Supply chain management companies are employed to ascertain the most streamlined and cost-effective logistical map possible.
“For example, Dell’s revolutionary computer supply chain approach involved making each computer based on a specific customer order, then shipping the computer directly to the customer. As a result, Dell was able to avoid having large computer inventories sitting in warehouses and retail stores which saved millions of dollars. Also, Dell avoided carrying computer inventories that could become technologically obsolete. [CSCMP, Council of Supply Chain Management Professionals via The Importance of Supply Chain Management]
Cash Flow: Products delivered to customers in an expedited manner yields an immediate increase in cash flow. If the product delivers sooner than expected, the invoice can be issued sooner.
Profit leverage wiggle room: Companies that work with supply chain management sectors have the ability to negotiate terms and contract rates. Agreements based on a year’s worth of business data often times allows for decreased rates across the board, thus increasing budget elsewhere and gross profit.
Top supply chain management companies have the immediate ability to alter the logistical overview of your entire supply chain. Streamlining efficiency in day-to-day transactions and avoiding unwarranted fees and non-compliant penalties with strategic planning.
If you have any questions regarding supply chain management or how to efficiently increase the productivity of your current supply chain, reach out to us today for more information. We would be happy to have a conversation with you.