Eliminating waste and reducing costs are essential steps toward optimizing the supply chain. But fixating on these steps alone is not enough to drive exponential profit growth.
Today’s increasingly complex global supply chains demand deeper strategic solutions and leading-edge management tools. The goal is to go beyond simple cost-saving measures and tighter controls—creating a smarter supply chain that fuels aggressive growth for years to come.
The supply chain isn’t a sunken cost—it’s a revenue driver
Too many C-suite executives see operations as a necessary cost. This view is something of a self-fulfilling prophecy, encouraging companies to just swallow the costs and not look for avenues of improvement.
Part of the problem is a disconnect between a company’s leadership and the supply chain itself. A 2018 report from Accenture found that only 53% of supply chain executives view their function as a growth enabler for their organization. The supply chain is viewed more as a support function than a powerhouse of growth potential.
But a well-oiled supply chain is primarily a driver of revenue, not expenses. Deloitte found that 79% of companies with “superior supply chain capabilities” achieved above-average revenue growth within their industries. Investment in the supply chain not only lowered overall operational costs—it stimulated higher profitability and stronger growth.
Innovations like real-time shipment tracking, automated invoice auditing, and intelligent compliance procedures aren’t just opportunities to streamline and squeeze marginal efficiency gains. First and foremost, these modern supply chain tools are growth enablers, allowing managers to garner insights from big data, rapidly vet vendors and carriers for better pricing, identify competitive advantages, and more.
Investing in these tools and strategies will first require supply chain managers to educate other leaders about the value of true supply chain optimization. This is not about shaving a few dollars off here and a few minutes off there. It’s about implementing long-term fixes that allow the supply chain—and the company—to do so much more.
Synchronicity matters, but is rarely achieved
Another major disconnect that often holds the supply chain back is the implementation gaps that tend to exist between various links on the chain.
Effective supply chain management requires implementing an array of best practices across the board. This includes sourcing, procurement, supplier relations, inventory management, shipping, and distribution management, among other areas. While each step can individually help bring costs down and increase efficiency, it’s the alignment and synchronization of these goals and initiatives that actually stimulates growth.
A cohesive supply chain is the backbone of a company’s success. Making improvements in one area just won’t cut it. That’s like patching up one hole in the fence while ignoring a dozen others, then wondering why it’s not keeping people out of the garden.
Companies should focus on rolling out best practices consistently, being mindful of oft-overlooked areas. For example, if the message isn’t trickling down to every regional facility, opportunities for savings, efficiency, and more can never be fully realized.
Smarter, more profitable supply chains start here
Our tools can help companies of all sizes mine every inch of their shipping, storage, and carrier data. The result is competitive insights that inspire agile strategies which generate systemic revenue growth. And with a single, fully integrated TMS solution rolled out across the organization, companies can ensure that every link in the supply chain is singing to the same tune—the tune of greater profitability.
Ready to transform the supply chain from support function to revenue driver? Contact us today.