Reducing Supply Chain Costs

January 8, 2018 Lori Allen

 

Visibility and Collaboration with Supply Chain Partners Is the Magic Bullet to Supply Chain Cost Savings

Browsing recent articles on supply chain management in the manufacturing world, players in the Heavy Building Materials ecosystem will find a long list of similarities in the hurdles, common pitfalls, and buzzwords surrounding supply chain management in both industries. A recent blog post by manufacturing solutions provider Ultriva, Reducing Supply Chain Costs starts with Supply Chain Visibility, hits on some of the key issues encountered by the manufacturing world that also resonate strongly with ready mix producers, raw materials suppliers, haulers, and building contractors in our ecosystem –

Providing a single version of truth: Trading partners have a complete view of their piece of the supply chain puzzle, allowing suppliers to proactively respond to fluctuations in demand and trading partners to work collaboratively towards decisions that benefit both all partners.

End Stock outs: Poor visibility results in materials shortages. The result is expensive, using faster delivery methods to get materials onsite at a premium.  Escalating costs for all involved parties.

Reduce Inventory:  Most supply chain professionals would say inventory reduction is a “no-brainer” to save money.  They would also say reduce at your own peril. For heavy building materials providers, to run out of material is a cardinal sin.   This fear-based reaction to the possibility of running out of materials causes many companies to operate with the sole philosophy of “just keep the bins, hoppers, inventory allotments full”. Most companies have no idea how much of a inventory buffer they are really maintaining or the operational impact of these carrying costs. Having a truly  accurate picture of inventory combined with true visibility into demand means these dollars can be freed up and used in other operational, revenue generating areas of the business.

Reduce unnecessary labor:  When supply chain planners rely on forecasts to perform their daily decision making, the forecast is more often that not out of alignment, requiring augmented spreadsheets.  The updated information must be communicated and verified with supply chain partners.  All these unnecessary work processes are eliminated with a supply chain visibility solutions that allow all partners to view in real time what materials are needed, when the need to be ordered/delivered, and when they will arrive.

So as a supply chain planner in the heavy building materials world, how do you gain the level of visibility needed to address these issues?  How do you move to a proactive supply chain methodology, instead of living day to day in reactionary mode?  Is is really possible to collaborate with trading partners in a way that really benefits all involved parties?  Click here to review a case study on how supplyCONNECT, Command Alkon’s industry specific solution, helped one producer and his trading partners gain true supply chain visibility and collaboration.

 

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