When fast growth led to unacceptably high logistics and inventory costs, the Austrian spice maker Kotányi implemented a supply chain management program to get things under control. That investment helped the company to expand its business and market share while cutting inventory and logistics costs.
Companies need to work with their suppliers, restrain cost cutting, and stick to fundamental supply chain strategies to ensure that their supply chains are ready to move forward when the economy recovers.
In this excerpt from the book Vested Outsourcing: Five Rules That Will Transform Outsourcing, the authors explain how to write contracts that allow an outsourcing partner to profit in exchange for achieving the desired performance outcome.
Swapping commodities with other manufacturers instead of shipping internationally can greatly reduce transportation costs and boost profits. Finding the right swap partner will help you avoid the risks that are inherent in these arrangements.
When products don't sell very much, conventional wisdom calls for reducing assortments and tailoring them to local conditions. But the opposite approach—stocking small quantities of each product at every store and centralizing replenishment decisions—has been shown to increase sales and reduce inventories without raising costs.