The Link between Supply Chain Performance and Profitability
The performance of supply-chain stakeholders has a direct impact on supply chain efficiency and profitability, with tangible benefits ranging from 11%-33% annually.
We recognise the business environment is more complex, interconnected and fast-moving than ever before. Customer supply chains are characterised by shorter lead-times and increased service expectations. Against this backdrop, Companies often underestimate the importance of supply chain performance to their overall success and profitability.
The performance of supply chains is driven by the collaborative efforts of multiple stakeholders, including manufacturers, suppliers, logistics service providers and distribution channels. The interaction between these key players is influenced by a number of enabling stakeholders, including carriers (air, maritime freight, trucking companies), infrastructure providers (port operators, terminals, telecommunications), customs agencies (origin, transhipment and destination points), technology suppliers (ERP, Supply Chain, CRM) and financial intermediaries.
The performance of supply-chain stakeholders has a direct impact on supply chain efficiency and tangible benefits to the bottom line. In our experience, the direct financial impacts (savings) from improved coordination and management of the supply chain can range from 11%-33% annually (see graphic below for breakdown) primarily from:
Freight Optimisation – improved capacity planning and carrier transport management through more effective information flow, agile operational processes and freight volume optimisation.
Admin Savings – rationalising the supply chain through single-source logistics management, consolidated invoicing and volume procurement savings.
Network Management – vendor consolidation solutions requiring the effective co-ordination of multiple-suppliers and carriers across multiple-geographies, fulfilling JIT (Just-in-Time) logistics while meeting the challenge to reduce lead-times, reduce inventory and associated carrying cost and optimise supply chain economies.
Leveraging our global network capabilities, strong carrier relationships and supply chain expertise, we deliver tangible benefits for our customers, driving costs out of supply chains to enhance their competitive edge. We work with our customers to categorise and identify their high-risk suppliers (e.g. those with spend over a defined threshold value, where there is a unique dependency and represent a high risk) to develop optimal supply chain fulfilment strategies.
Here are a just few cases in point:
A global Automotive Manufacturer achieved:
- Up to 12% freight optimisation savings through upstream and downstream vendor management programmes.
- Over €10 million reduction in working capital, warehousing and freight costs.
- Over €3 million saving from network optimization and improved planning.
An International Healthcare Distributor achieved:
- Up to 15% freight optimisation savings through rationalising the carrier base and improvement in demand planning and fulfilment strategy.
- Reduction in inbound logistics costs by 29% and increased network performance by 25% by moving to a vendor-managed inventory model.
- Cut inventory levels by 20%.
A US Retail Distributor achieved:
- Up to 18% freight optimisation savings on internationally sourced products primarily through a reduction is air freight incidents and improved vendor management.
- Up to 5% reduction in network management costs through better planning and order visibility.
- Realised over $500,000 of inventory savings within first year by removing inefficiencies in their supply chain.
These case examples highlight how supply chain management can move beyond operational improvements to delivering significant competitive advantage to an organisation.
We collaborate with our customers to unlock value across their supply chains, leveraging our expertise, supplier relationships and global network to deliver bespoke end-to-end logistics solutions.
Our offering includes:
- Supply chain design & optimisation planning
- Vendor hub operations and multi-vendor, multi-country consolidation management
- Multi-modal freight forwarding (sea, air, overland)
- Just-in-time (JIT) and just-in-sequence (JIS) services
- Real-time monitoring and control
- Control tower solutions with single point of contact and 24/7 customer support
- Track and Trace ™ shipment tracking
TradeLink has long-standing success in delivering logistics solutions to companies in diverse industries, with particular emphasis on automotive, pharmaceutical & healthcare, mining, industrial & manufacturing sectors. Contact us to learn more.