Gartner research analysts found that supply chain cost management models remain short term and functionally focused.
To optimize supply chain costs, it’s important to align business value with efficient supply chain operating outcomes.
Analysts identified 5 key levers to manage in pursuit of end-to-end supply chain cost optimization. Are you fully optimizing supply chain costs? Download the guide to find out.
Gartner research analysts found that supply chain cost management models remain short term and functionally focused. Short-term cost goals are prioritized over long-term business value, and a narrow, function-specific focus limits the ability to pursue big change and meet full performance potential.
Reducing supply chain costs is further complicated by supplier substitution, outsourcing, supplier refinancing and inventory changes.
Not only do the best supply chain leaders control supply chain costs in the face of disruptions like pandemics, recessions and geopolitical shifts, but they also consider the relationship between diverse resources and networks. Instead of reduction targets, these supply chain leaders and their key stakeholders focus on aligning and collaborating around key operating outcomes to optimize supply chain costs.
Partner with Gartner to create a supply chain cost management vision that drives tangible performance improvements while also increasing your leadership effectiveness, scope of business influence and strategic relevance.
Discover the supply chain leader’s new imperatives and get specific recommendations to reset supply chain strategy and operations.
Optimize supply chain costs through Total Cost of Ownership: Understand its benefits and get practical tips for moving beyond simple/unit price.
In this complimentary webinar, we will look at how shifting labor costs, changes in geopolitics and trade policies, and the need to be closer to customers are making companies question supply chains that have been designed specifically for cost efficiency.
Take the 5 actions on this checklist to manage supply chain costs efficiently while also driving innovation.
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To respond to increasing network costs and expensive corrective actions, a leading medical device manufacturer needed to create an effective network design strategy. Gartner helped the client to carry out their network design strategy in-house versus investing in software helping to save $1 million in expense and up to 15X in membership cost.
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Supply chain leaders embark on cost optimization to improve operating efficiency. Improved operating efficiency stems from better planning decisions within and across functions. This is a short-term cost optimization effort that takes weeks to months, and involves simple planning models, reporting and analytics. Supply chain leaders are challenged to increase awareness, provide visibility and reduce waste. Gartner research analysts recommend:
Supply chain leaders embark on cost optimization to reduce structural cost. They do this by (re)designing networks, organizations and products. This is a medium-term cost optimization effort that takes quarters, and involves using models to evaluate design tradeoffs. Supply chain leaders are challenged by sunk cost constraints and change sensitivities. Gartner research analysts recommend:
Supply chain leaders embark on cost optimization to improve cost competitiveness. By transforming processes and operating capabilities, an organization can improve its cost competitiveness. This is a long-term cost optimization effort that takes quarters to years, and involves the operating technologies that improve decision and execution speed and precision. Supply chain leaders struggle with investing resources and driving adoption of new processes. Gartner research analysts recommend:
Create a supply chain cost management vision
Gartner experts are trusted advisors for 2,500+ supply chain leaders. Use our trusted insights and objective advice to optimize supply chain costs.
