ByBox

The desire to save money in business is often relentless and this is especially true of the supply chain. Often the supply chain is seen as a cost on a balance sheet and therefore, always under tight scrutiny for cost savings and cuts. But is a price reduction always the best course of action? Or are there situations where cost isn’t the bottom line?

Getting a better quality service is one area most businesses agree is worth the cost. In today’s fast paced supply chain, a stripped down and inexpensive service is often shown to be unreliable. Failed deliveries slow everything down and consistently disappointing your customers can be damaging for business in the long term, so supply chains need to find a balance between cost and quality. The goal should be to understand what a customer needs and then work to meet or exceed their expectations. Is it critical that a customer has a delivery within 24 hours? It might be worth paying extra to make sure that happens.

Businesses may also choose to pay more in their supply chains in order to reduce their environmental impact. Environmental issues have never been more important and being environmentally friendly is no longer a question of just ethics. Customers now care more than ever about environmental issues and some of the world’s biggest organisations are starting to take note; Unilever recently responded to increased consumer pressure by committing to using only recyclable packing by 2025 (source).

Recycling waste is one important example where it may be better to spend more to look after the planet, especially in supply chains where a lot of basic packaging is recyclable. This is not only beneficial to the environment, but could also increase your long term revenue as you improve your reputation amongst your customers.

Finally, businesses may look to spend more investing in technologies that make their supply chain more efficient. In the field service industry, companies can be hesitant around changing existing processes, especially as technology is initially expensive and not something that has previously been widely embraced by the sector. However, supply chain technology is now able to provide companies with huge long term cost benefits. For example, a fully integrated warehouse management system that can track stock at all points in the supply chain is able to reduce costs greatly through decreasing the amount of stock loss, allowing for more efficient processes and eventually lowering the amount of stock you need to hold. In the long term this cost reduction will far outweigh the initial cost of implementation.

In summary, as we enter an era where expectations on supply chains are higher than ever, and where there is increased pressure on companies to embrace new technologies now that the benefits are clear, cost is not always the bottom line. Supply chains should be striving to save money, but finding out what is right for your business and putting plans in place for longer term cost savings, is more important than just trying to cut costs.

ByBox is constantly striving to offer a service that is both high quality and low cost. To find out more, please contact us.

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