Sometimes it is not essential to increase the sales to generate more profits. This can be achieved by the reduction of cost that is spent on supply chain management. This generally includes the shipping cost and storage cost along with other factors. at every phase in the supply chain cost can be reduced.
It is essential to keep the inventory at the warehouses at the company. By doing a proper analysis extra space can be found out and effective utilization of existing space for storage can be done. By a systematic arrangement of goods, it is also possible to reduce the time wasted for moving goods from one location to another location. The reduction in time for finding materials decreases the downtime also. effective storage space utilization can also reduce the cost of storing in external warehouses.
If only one supplier is being depended on making the supplies the advantage of utilizing competition can be eliminated. Finding different suppliers and comparing the cost of them can reduce the cost of a supply chain. It is also helpful in getting the supplies of the material frequently which reduce the delays in getting material. The quality of the product also gets improved due to a competitive supplier choosing a strategy.
Another way to reduce the cost is by moving the supplies faster through the supply chain. If materials can be ordered quickly the space that is utilized for storage can be used for other purposes. The probability of them getting damaged in storing also can be reduced by quick and faster moving of products. Transportation of the materials and products inside the supply chain cost the company and this can be reduced by properly managing the time in shipment.