The Apparel Logistics Group’s Supply Chain Cost Analysis

The late management expert Peter Drucker explained the importance of analytics when he noted that "What gets measured, gets managed." Businesses can and should analyze many facets of their supply chain, including the costs involved. Collecting and making sense of supply chain financial data can be difficult for many apparel businesses, but The Apparel Logistics Group is there to help.

The Advantages of Supply Chain Cost Analysis

Supply chain cost analysis helps businesses improve their bottom line. Supply chain costs typically represent a large part of any business budget. Through supply chain cost analysis, Rob O'Byrne of Supply Chain Quarterly says businesses can easily cut their costs by between $2 million and $10 million every year.

When businesses extract the right information and put it under a microscope, through supply cost chain analysis, they can control their finances better. This financial control is crucial for good cash flow management.

Good supply chain cost analysis isn't about simply maintaining the status quo, though. Supply chain cost analysis helps businesses identify areas where they could make changes to boost their profits.

Supply chain cost analysis also helps companies understand the way their supply chain and financial decisions relating to it impact other elements of their business. This deeper understanding makes sure the financial decisions businesses make don't compromise other professional interests, like the timeliness of deliveries or the quality of shipped goods.

Elements of Supply Chain Cost Analysis

Supply chain cost analysis investigates all aspects of the supply chain concerning financial transactions. These include spending on the supplies themselves, transportation and shipping costs, warehouse storage fees, insurance, and packaging. It may also include often overlooked amounts like administration fees, overheads, and costs incurred through human and system errors. As all companies are different, supply chain costs analyzed will also vary.

How Supply Chain Costs Are Analyzed

Successful supply chain cost analysis involves breaking supply chain costs down into separate, relevant categories. Supply chain costs are collated for a set period, usually a financial quarter or year.

There are several ways supply chain costs can be analyzed. Businesses might calculate their supply chain costs as a percentage of their total business spending. They may also see which parts of the supply chain are costing the most and whether these expenses are justified. Large organizations might compare supply chain costs between different locations and departments. As businesses progress, they may also compare their supply chain costs over time. If the information is available, businesses might also compare their supply chain costs to their competitors.

Why Choose The Apparel Logistics Group?

Supply chain cost analysis can be difficult and stressful for businesses to manage in-house, so outsourcing to The Apparel Logistics Group makes sense. As apparel specialists, we understand clothing businesses like yours. This industry knowledge means we understand your apparel supply chain and its costs better than many other organizations. Our financial software also ensures our supply chain cost analysis is always accurate.

For supply chain cost analysis you can trust, turn to The Apparel Logistics Group. Complete our consultation form to learn more about all our apparel supply chain analysis services and other things we can do for your business.

Posted: 10/25/2017 4:54:37 PM by Global Administrator | with 0 comments

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