5 Ways To Reduce Your Supply Chain Costs

5 Effective Ways to Reduce Your Supply Chain Costs

Posted on:
Jan 24, 2018

Have you recently noticed your supply chain costs are eating up your budget? The reason can lie in your supply chain strategy. Still, there are reliable practices to review your logistics budgeting and reduce supply chain costs effectively.

Challenges of logistics budgeting

Calculating and managing supply chain costs can be overwhelming. Business owners often focus on a single supply chain level, missing other essential aspects. The task gets even harder knowing you must stick to your logistics budget without exceeding it.

When planning your shipping expenses, count the most critical areas first. They include salary distribution, inventory management, warehousing, and performance supervision. Pay attention to cooperating with a reliable and affordable shipping service as one of your primary concerns.

How to reduce supply chain costs?

Proper financial management is crucial for your business to be successful. If you’re spending too much and seeing too little return, it could be time to make improvements and reduce supply chain costs. You could see your profits rocket upward by achieving sufficient savings in your supply chain costs. If you are focused on earning these savings, you need to know where to look.


You don’t have to start cutting your labor force to save money and want to keep them. Leaving your staff number low will only leave the remainder in an environment where they are pushed to work twice as hard to reach their goals. Hiring in terms of seasonal demands is wise to meet coverage in case of time-off requests or call-offs due to sick leave. It’s also wise to incorporate a robust employee training program to increase productivity.

Partnering with additional staff can significantly facilitate your peak season shipping. It’s sometimes difficult to process and ship numerous orders under tight deadlines. Therefore, the extra labor can be a solution. Although you’ll have to allocate some supply chain costs for hiring employees, in the end, your company benefits will cover these expenses.


Consider changing the warehouse space if it’s excessive or too small. Analyzing your sales can help determine if keeping many supplies in storage space is reasonable. At least, you can regulate your supply chain costs for warehousing by using less space during the quiet shipping season.

Knowing traditional warehousing practices is beneficial, but automating your warehouse processes is smarter. It is worth inquiring how you can automate some of your operations to increase efficiency and cut your supply chain costs. Modern warehouses offer a wide range of automated services that successfully replace physical labor and manual operations. Besides, a digitalized storage space is easier to monitor, reducing the number of personal interactions and cutting unnecessary paperwork.

Inventory management

You’d be pretty upset if you lost your wallet, right? Wouldn’t you feel the same if some of your inventory was missing? A sound inventory management strategy can prevent common stock issues and tracking errors. Without a clear plan, you will be unprepared for targeting these mistakes that could cost your savings.

It’s vital to keep track of your inventory state and know if your company’s meeting customer demand. In addition, proper inventory management can help prevent freight losses and stock shortages. Ensure to launch regular inventory checkups to see what items aren’t popular among your buyers. Thus you can consider rebranding some products or replacing them with other supplies.

Performance monitoring

If you haven’t already, setting future goals and seeing how your performance stack up to them is a great habit. Choose key performance indicators (KPIs) that you can use to measure your performance regularly. This can assist in determining how much money you are saving and how much you’re spending.

This practice can help you detect problematic areas and optimize working processes on multiple levels. Besides, you’ll clearly understand how to distribute responsibilities inside your company to reach performance goals better.

Supply chain costs outsourcing

Many businesses outsource some of their supply chain operations, so don’t feel left out. Sometimes the cost of doing something in-house is higher than using someone else’s services. Create a healthy relationship with a company whose services you choose to use. Both parties will enjoy profit rewards by helping each other to achieve their goals. Take shipping, for example, most businesses lack a team dedicated to moving their shipments between two points, so they look towards a partnering business that can do it for them.

Optimizing supply chain costs with GoShip

At GoShip, we are happy to assist other businesses in reducing their supply chain expenditures. Our experience can bridge the gap in your supply chain operation. With over a thousand carriers across the US, we can ensure your shipment travels the distance. Each carrier will provide you with a personalized rate to compare side by side, so you choose the best price. We are easy to use, so you can ensure your operation maintains its efficiency. Get a free quote today and save money effectively!

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