6 Easy Ways to Cut Supply Chain Costs

‘Does your supply chain give you the pleasure of reduced cost and increased efficiency?’

Not Yet? Then you’ve come the right place. 

Most businesses know, avoiding unnecessary expenditures through careful management of its supply chain will allow them to reinvest in other areas of their business.

However, that you are an owner or leader of a manufacturing business and not an expert in logistics or supply chain.

As supply chain management and logistics consultants, Orchid Global Sourcing is a leader in providing custom-made design, manufacturing, sourcing, and last mile delivery solutions to a variety of industries. 

Our aim is to understand and enhance your supply chain requirements in detail.With many years of experience, we have uncovered a number of ways to streamline supply chain quickly without sacrificing performance or customer service.

Here are the top 6 easy ways to reduce your supply chain costs while hindering your operational efficiency. 


In order to reduce supply chain costs, you should regularly monitor client demand trends to see if something needs to be changed. As seasons or patterns change, you can alter your supply ordering decisions based on that information.

You should also re-examine your delivery strategy and determine whether you are in fact adding value to your customers business as much as you think.

The likelihood that a customer will be willing to spend money on a value-added service depends on whether they see the added value and understand how it will help them run their business more effectively.


At the end of the day, utilizing your space effectively will save you money. Stocking your warehouse with inventory and supplies has its cost. Choosing a space that matches your needs more closely could help you save money. 

An inefficient storage and retrieval system ruins time and money in searching for lost or misplaced inventory, which takes additional personnel.

Manufacturers often overestimate inventory during growth periods, and hence, invest in more space than is necessary. 

Establish a method and process for easy location and identification of the warehouse inventory, as well as determine whether your existing inventory management system is underutilizing the space available.


The automation of warehouse processes will help you reduce your supply chain costs.

While you must consider the particulars of your supply chain and your industry when automating, with the developments in technology over the last thirty years, a large number of business procedures have witnessed automation with computer systems and associated hardware.

The use of automated processes also eliminates the possibility of human error, freeing up valuable time and resources for your business while improving quality. Forecasting demand, planning inventory, managing warehouses, transport loading, route planning systems, etc., are just a few examples to think about.

Experts estimate that the combined cost of human errors for UK and US businesses is approximately $37 billion.


Transportation is a significant component of the supply chain and can be costly.

Road, rail, and sea freight are certainly less expensive than air freight but, they lead to repercussions like increased lead time, lower inventory levels, unavailability of parts, inadequate customer service, and penalties.

To discover which is the best mode of transportation for your business, it is essential to get quotes from multiple modes of transportation. Diverse providers employ different routes, different hubs, different size motorways, and different border crossing points.


Get more productivity out of fewer assets.

Underutilisation of assets, such as vehicle fleet, facilities, or inventory, results in inefficiency and unprofitable investment. Such problems have been resolved by leasing assets and not just owning them. 

Your business can save money simply by adjusting the utilisation of its assets.

A major retailer, for instance, outsourced its delivery fleet, which delivered merchandise from its distribution centers to its stores. For each vehicle performing deliveries, they paid a flat fee regardless of how full it was. Thus, the company was unlikely to utilize its fleet effectively. Changing to a pallet-rate, helped improve the fleet’s efficiency while decreasing the retailer cost.

Don’t forget! Never overpay for a dedicated facility by simply adding profit to the top because of an overpriced sharing facility.

And for the last one. Don’t forget to… 


Manage and improve what is strategic so you can measure what is important.

Your business’s end game objective should be the core of your supply chain strategy. In order to set realistic targets for improvement, you must manage that regularly and consistently. 

Afterward, you decide what key performance indicators (KPIs) will allow you to track how well you’re doing compared to your targets. Furthermore, it is pivotal to embed them in the organization with the explicit understanding that they are there to support your objectives, not the other way round.

KPIs are different for different organizations. You should resist the temptation to copy other companies’ systems just because they work well for them. 

Establish your objectives and targets, and then define indicators which will be the best way to assess your performance.

Companies can often uncover significant cost savings by focusing on these six areas of supply chain management, according to our experience. The areas listed above may not all need attention in your own business. 

But how to deconstruct these areas? 

That’s where we come in…

At Orchid Global Sourcing, we work as an extended arm for you and provide services that will help you streamline operations, save cost, and increase your business efficiency by tenfold.

Get in touch with us today!

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