In supply chain management most of the manufacturing organizations outsource materials from the overseas and proper control of cost is a crucial factor. Logistics Management which usually covers procuring transporting and storing of goods is affected by variation in cost. For example variation in fuel price affects transportation and international trading laws affect the delay in getting materials. The following things can be done to reduce the cost in Supply Chain and Logistics Management.
1. Understanding about the actual cost of outsourcing raw materials which include the freight charges, duties to be paid and cost involving the transportation of inventory.
2. Focusing the variations in the timings between the transits which causes the freight forwarding charges and also storing of inventory in bulk is another factor affecting cost.
3. Considering the cost that is involving in the duty and tariff rates of the region.
4. Consolidating shipments from a single country into one and clubbing them together will reduce the cost involved in the Supply Chain.
5. Informing to the concerned people about the actual cost involved in freight and the various services that are come to affect the decision making factors.