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Is your supply chain providing value or just reducing costs?



Supply chain professionals are already expert problem solvers -- here’s how you leverage those skills: 


Building and maintaining relationships with suppliers who offer the best prices, reevaluating processes to improve efficiency, preparing for every worst-case scenario to minimize disruptions — these cost-saving measures are the staples of supply chain. 

But cutting costs doesn’t necessarily equal growth. A white paper published by Take Supply Chain argues that focusing on cost could actually prevent growth. Cut too much and you risk cutting into performance; focus only on reduction and you could lose sight of opportunities. 


Want to start adding value but don’t know where to begin? Here's how to start (re)thinking the problem.


Reverse logistics 


Whether your customers are returning products to you or you’re returning components to your suppliers, efficiency is key. Having a person or team dedicated to dealing with returns will streamline the process and save money. But reverse logistics can also drive revenue. 


A recent survey of 272 organizations showed liquidation was a popular method for handling returns but while it may be the path of least resistance for some, it won’t necessarily add to the bottom line. U.S. Cellular takes an approach that involves prepping and grading returns for resale and that resulted in a positive cash flow for reverse logistics. 


Improve performance


When electronics manufacturer Harris Corporation acquired a semiconductor company it went from having very little competition to a high demand for on-time deliveries. Poor delivery services nearly cost Harris 60 percent of its customers and millions of dollars, according to a Spinnaker white paper. Then Harris improved its usage of data and automation and increased on-time delivery rates to nearly 95 percent. Harris didn’t just keep customers, it added more. 


Providing better customer service through new technologies, better processes and planning will only grow your clientele. 


Drive innovation 


Listen. Listen to the employees who deal with the daily minutiae. Listen to your customers, listen to your suppliers. Reach out to other departments within the company. Maintain relationships internally and externally and then collaborate. The next great innovation, be it a new product, a new technology or just do a new way of doing things won’t come from keeping to yourself and maintaining business as usual.

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