"There are ways supply chain executives at manufacturers, distributors and retailers can survive and a few ways to thrive in this downturn," says Terry Harris with Chicago Consulting. He offers the following 10 steps to help you tough it out.
- Redesign your distribution network.
- Compete on service; fend off price concessions.
- Re-bid your freight spend, and deepen your routing guides.
- Invest in nontransportation resources (inventory, labor, technology, time) that offset transportation costs.
- Fill orders flexibly. Don't ship one order from multiple locations, and don't make
multiple shipments of the same order.
- Change inventory management logic: set safety stocks and order quantities differently.
- Make stocking/no-stock decisions and set safety stocks based on the cost of the item.
- Change push deployment to pull.
- Smaller order quantities.
- Accelerate your forecasts to catch-up with decreased demand.
- Re-engineer packaging.
- Shift to more productive transportation modes -- expedited to normal, parcel to less-than-truckload (LTL), LTL to truckload, truckload to rail, and air to ground.
- Design supply chains and position products around green sustainability.