Lean Supply Chains Remain a Priority - GENCO Program Drives Savings

by Gayatri Varma, Director of Supply Chain Engineering

This article comes from the June 2009 Supply Chain Link e-newsletter.

Admit it. As gasoline prices continued their free fall in the first quarter of 2009, you let your guard down.

Networking your supply chain didn’t seem nearly so important once prices started dropping in 2008, did it? The pressure, presumably, was off.

But this is no time to be complacent.

It’s Not Just Gas

The boiling point occurred when gas prices eclipsed $4 a gallon. Companies, already struggling to balance cost and performance against a myriad of regulation changes, scrambled to redesign their supply chains, looking for ways to cut costs.

The urgency to make their supply chains leaner waned, however, when prices reversed course, and companies’ priorities shifted.

But there are other significant reasons to improve your supply chain. These include:

LTL/TL shipments optimization
Mergers and acquisitions
Outsourced manufacturing/change in supplier base
Decentralized operations/Leveraging current technology
Rising distribution costs
Changes in demand

So even minus the scourge of skyrocketing gas prices, it’s just as important now to examine ways to streamline your supply chain.

Studying the Network

GENCO Supply Chain Solutions helps companies analyze their supply chains and put together strategies for optimizing performance. A GENCO network study features an integrated team that continuously drives supply chain improvements.

GENCO employs an interactive approach to understand the capabilities and expectations of each supply chain by reviewing facility layout and design, activity-based performance measures and simulations, network design, and routing. GENCO develops a strategy that fits each customer’s unique business needs and is also geared toward the long term through data mining and continuous-improvement projects.

Bike Firm’s Supply Chain Born to Be Optimized

Since 2002 GENCO has been responsible for the transportation and inventory management of returned goods for a major U.S. motorcycle manufacturer. The customer has more than 700 dealer locations and 11 pool point hubs shipping returns back to a central U.S. location. GENCO was asked to minimize the total cost within the company’s supply chain.

GENCO conducted a detailed network study that integrated the company’s inbound and outbound supply chain activity into the existing reverse logistics network established for returns. GENCO identified an optimal supply chain network that used 5 of the 11 available reverse hubs for consolidation, established three weekly continuous moves, and reduced total transportation costs.

GENCO reviewed the findings with the customer, which implemented the recommended network and realized the cost savings.

Prioritize Now, Save Today

Redesigning your supply chain doesn’t have to—nor should it—wait for extreme circumstances such as 4-buck-a-gallon gas. In an era of constant change and ultra competition, all companies need to be unrelenting in their pursuit of driving costs out of their supply chains.

Finding savings in your network should be a full-time priority. Let GENCO Supply Chain Solutions find out how and where your company can save—today.