What does supply chain optimization mean?
Supply chain optimisation (SCO) is the application of tools and processes to streamline an end to end manufacturing or production operation so as to reduce cost and increase profit.
Working as a Supply Chain Manager tasked with seeking optimization, you are trying to balance the need to deliver what the customer wants at the lowest overall cost and highest overall profit to your business.
What is the goal of supply chain Optimisation?
The goal of SCO is to seek out excess cost wherever it may sit in your Supply Chain process and reduce or remove it without increasing your risk or reducing your efficiency or the product availability to the customer.
How do you optimize a supply chain?
The classic first step in a supply chain optimization approach has been to tackle inventory which is such a large contributor to cost.
Other process approaches to optimization begin by understanding what your supply chain looks like now, its successes, its weaknesses, its gaps.
To find out more about the stages of SCO view the full Knowledge paper.
What does end to end supply chain mean?
Every link in the supply chain costs money and takes time and if you can improve the time it takes to move products to your customers then you can reduce the amount of money that process costs. Raising orders, holding and moving stock, maintaining vehicles, paying invoices and managing cash flow, warehouse overheads are all candidates for optimization.
To find out more on Supply Chain Optimisation and how to conduct this for your organisation, then view the full Knowledge paper (Insert canva)
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For addition reading on this topic visit Supply Chain Management