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Supply Chain Optimisation represents a holistic approach towards reducing the cost of procuring goods and/or services, and can achieve dramatic results, typically savings of between 20% and 40%. The essence of the technique is to analyse every step in the complex chain of events involved in manufacturing, delivering and using the good or service, and then seeking opportunities to remove unnecessary cost, to the benefit of both buyer and supplier. For instance, are there multiple inspections when one will suffice ? Could the specifications be relaxed to make manufacturing cheaper ? Would it be more economic to provide a service (eg "compression") rather than a good (eg a compressor) ? What scope is there for economies of scale ?
For example, a supply chain optimisation project recently removed $10m/year (over 25%) from the cost of procuring steel pipework. This was done by detailed analysis of the entire supply process, starting with delivery of iron ore at the mill to deployment of the pipes at the worksite many thousands of kilometres away.
Supply chain optimisation requires great openness and therefore trust on the part of both the buyer and supplier. The true cost savings opportunities will be discovered only if they agree to work together as a team of equals so as to understand each other's systems, constraints and priorities, while not using the privileged information so gained to the detriment of the other.
The idea is not for the buyer to squeeze the profit margins of the supplier. Rather, it is to find out how BOTH parties can make more money, in a true win-win confluence.
Tallrite's Capabilities & Contribution
Tallrite can help you achieve your cost-saving objectives through facilitating the supply chain optimisation approach. There are typically two major steps involved.
Our staff have considerable experience and expertise in the Supply Chain Optimisation process and have made big additions to the bottom lines of the companies that have used them.
The downside is minimal, the upside spectacular. Can you afford not to explore Supply Chain Optimisation ?
Alternatively, send an e-mail to info-at-tallrite-dot-com
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