Supply Chain Blocking and Tackling
In the realm of cost reduction, value can be defined as short-term realization coupled with sustainable results. Five areas that represent key components in reducing supply chain costs in any organization include:
' Inventory reduction
0 Product rationalization
' Customer segmentation
0 Supplier base management 0 Network optimization
These key components are basic supply chain blocking and tackling maneuvers but are rarely given the attention deserved. In fact, in recent years, they have often been overlooked as companies struggled to meet the demands of a growing economy. Efficiencies in these functions can drive an organization’s market positioning and be leveraged to achieve strategic objectives. Even without the strategic perspective, these efficiencies can ensure the viability of an organization during tough times as well as during growth years, as experienced in the 19905. The following sections highlight the concept, describe the value proposition and provide a case example for each of the above five recommendations.