Understanding the impact your supply chain has on the bottom line is critical in today’s ever changing world. Each facet of the supply chain; be it internal or external, will directly or indirectly impact your Bottom Line. Using a “Rapid Cost Reduction” methodology will quickly target the areas of focus for driving down costs and increasing efficiencies. Once opportunities are identified, 3 critical questions must be answered:
- What will be the quick wins?
- What will be the financial impact of the supply chain assessment and how do we track them?, and
- Will the savings be one-time only or ongoing?
Direct cost savings benefits span over revenue growth, operating margin and asset efficiency.
The chart below summarizes some of the typical performance metrics targeted and their impact on the bottom line.
Sample Rapid Cost Reduction Chart
John Hare Toronto is a Supply Chain Executive working in Toronto.