Cut Supply Chain Costs Without Jeopardizing Long-Term Growth

Cost reduction remains the top strategic priority for the current year, BCG says. So, why do operations keep missing the mark, and by such big margins?

One significant component of most balance sheets, are property and infrastructure costs. As experts in site sourcing and lease negotiation, Tenant Leasing Group (TLG) prides itself on minimising such fixed supply-side costs for corporates and retailers alike.

Laura Juliano, author of the survey and North American operations lead at BCG, details five major “levers” for reducing dynamic, supply chain cost across organizations:

1. Procurement, both for direct and indirect spend – aim for economies of scale, and encourage more competitive bidding from multiple suppliers.
2. Lean manufacturing with a “digital spin” – reducing waste, rework and process bottlenecks, through automation.
3. Integrated planning to better match supply with demand – this mission is even more pressing with the rise in the cost of working capital due to higher interest rates.
4. Optimization of tasks within the warehouse
5. The “right-sizing” of logistics networks

The last of these – logistics and warehousing networks – is something that TLG work with our clients and partners on as our bread and butter, and find that for many businesses, these are ripe targets for optimization and cost savings.

Property and logistics constitute “one of the costliest line items on the P&L” according to Juliano. Manufacturing and logistics need to be integrated so that the placement of distribution centers results in the most efficient handling of products, both inbound to production and outbound to the end customer.

We also partner with specialist project managers with delivery expertise in warehousing and fit-outs. This way our clients can focus on their day-to-day management and new business development. Reach out to learn more.