Is your supply chain over-served?
March 26, 2014
At the recent Stifel Transportation and Logistics Conference, I moderated a panel discussion that included representatives from Wal-Mart, Dell, Under Armour and Clorox. One topic they covered that I found especially interesting was that some companies were entertaining the idea of slowing down their supply chain. Why would they do that?
First, decisions affecting logistics and supply chain costs are increasingly being made “up the food chain” at the C-Level. Executives looking at the bottom line are always interesting in cutting costs, but only recently have many started to look at new ways to save when it comes to their transportation spend. Additionally, companies are starting to look at whether the customer service they are offering in terms of supply chain speed is actually paying dividends.
For example, the Dell representative highlighted the savings associated with their decision to slow down its Supply Chain from 58 hours to seven days. With Dell’s (some would say) legendary dedication to speed and customization, that was a big change. But as Dell incorporates/combines a “made to stock” with their traditional “made to order” model, they are changing their supply chain.
Given the significance of this change, I asked how long it took Dell to make this decision? The answer: Two weeks. Afterwards, the individual from Dell told me with the slim margins in the PC/Tablet/Electronics industry, the savings associated with slowing down their supply chain are vitally important in Dell’s ability to compete.
It was interesting to note that the other shippers on the panel had their own stories about what their companies were doing to manage their costs. Whether it’s looking at packaging, sourcing from Asia, or working with carrier to address inefficiencies, it was obvious that when it comes to managing and reducing logistics and supply chain costs, everything is on the table.
One of the reason, I find these conference so valuable is because you can get a wealth of valuable information in a couple of days. You can hear from the top executives and learn what they are doing and how it will affect your operations. And that’s why I’d like to challenge you to attend NASSTRAC’s annual meeting in Orlando Florida on April 13-16, 2014. They have put together an outstanding education and networking event and in three short days, you’ll get more useful information than you can imagine. You can learn more by going to NASSTRAC.org.
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