10 Supply Chain Initiatives to Survive and Thrive in this Downturn

Compete on service; fend off price concessions

"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.

  1. Redesign your distribution network.
  2. Compete on service; fend off price concessions.
  3. Re-bid your freight spend, and deepen your routing guides.
  4. Invest in nontransportation resources (inventory, labor, technology, time) that offset transportation costs.
  5. Fill orders flexibly. Don't ship one order from multiple locations, and don't make
    multiple shipments of the same order.
  6. 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.
  7. Accelerate your forecasts to catch-up with decreased demand.
  8. Re-engineer packaging.
  9. 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.
  10. Design supply chains and position products around green sustainability.

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