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How to generate more cost savings in 2018

Posted by IFCO Systems
January 25, 2018

The beginning of each year presents an opportunity for businesses to evaluate current practices and operations and reenergize efforts for improvement and profitability. At the top of the list for many companies is a desire to reduce costs and waste where applicable. The trick to long term cost savings is knowing how and where to cut back in a way that doesn’t cut corners or result in adverse outcomes elsewhere.

Here are our top cost savings tips for perishable supply chain professionals:

  • Find out what your customers want - Evaluate your supply chain from the perspective of your customers first and eliminate aspects of your supply chain that are not truly valued. It’s possible that you’ve created offerings that you may have assumed are important, but your customers could be indifferent. Keep in mind not all customers are looking for the same thing - making faulty assumptions like increasing deliveries for all stores for a customer when they really only need frequent deliveries to a few select stores leads to increased costs. Talk to your customers to remove ineffective components to realize cost savings.
  • Take a “Lean Approach” – “Lean thinking” will allow you to maximize customer value while eliminating waste rather than a black and white “cut costs” approach. Find ways to deliver more value to your customers with fewer resources through optimizing the flow of products and services through entire value streams.
  • Minimize supply chain touch points - Work to eliminate supply chain touch points by optimizing your inventory management and delivery schedule to remove moments of “avoidable handling.” Examples of touchpoints to eliminate include restacking shifting pallets, repositioning containers to achieve load stability, and store clerks emptying corrugated containers and stock displays. Practicing a one-touch approach will help eliminate these factors and save costs.
  • Create a culture of “innovation” – While many companies identify innovation as a value, most are unsure of how to truly instill this into their company culture. Begin by listening to front line employees and asking for their ideas on how to improve efficiencies and eliminate waste. Celebrate and elevate employees who are able to work smarter within their roles. When value-added behaviors are highly celebrated, culture is transformed!
  • Use RPCs to reduce product loss – The USDA reports that the average shrink for supermarkets for fresh fruit and vegetables is 12%. For produce, the two leading causes of product loss, poor temperature control and physical damage from unstable containers, occur during transit. One of the most positive steps retailers and growers alike can take to reduce costs associated with product loss is the switch to RPCs. Thanks to their design, RPCs reduce packaging damage from 4 percent to 0.5 percent while their superior ventilation results in faster cooler and longer shelf life. Plus, RPCs offer“one-touch” efficiency for order selectors and store clerks alike with their standard footprint, helping you to minimize touchpoints even further.

Would you like 5 more cost savings tips just like these? We’ve created a guide that outlines 10 ways you can modify your supply chain to achieve long-term cost savings. To get all 10 of our tips, download the full PDF here!

Topics: Retail