Friday, February 10, 2012

Moving Point B:

Smart supply chain strategies help offset volatile fuel costs.

With fuel prices rising, and expected to climb further, corporate supply chains are coming under pressure from fuel surcharges and increased operating costs. By planning ahead and streamlining your logistics, though, you can reduce the hit to your bottom line.

A network optimization analysis may result in opening or closing distribution centers, or even moving facilities to more optimal locations. The combination of higher logistics costs and added inventory requirements has prompted many companies to move supply chain operations closer to key markets. By sending unfinished or unpackaged goods into regions that are closer to the end consumer for final assembly, you can maintain inventory at a flexible level and reduce fuel costs.

Changing your shipping practices can dramatically affect profitability. This can be as simple as establishing specific delivery dates with key customers, which will enable you to consolidate shipments. Partnering with a company that is not a competitor but ships product to the same locations and consolidating shipments can reduce costs and increase shipment density.

Adopting sustainable supply chain practices can help reduce costs and support corporate environmental initiatives. Redesigning packaging to be more compact and incorporate recyclable materials with little or no plastic can increase pallet density, which reduces shipping costs and carbon footprint.

The goal of your supply chain operations is more than just to move product from Point A to Point B. Maybe you need to move Point B.

Kirk Shearer
800-989-0054 x103

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