Supply Chain Cost Reduction

Industrial Engineering of Supply Chains

The cost reduction effort on any system will involve simplification effort. Systems are made complex by functional designers by adding various features. Industrial engineers in their quest for efficiency need to examine the contribution of various complex features to the profit potential of the system and need to simplify where needed.

Simplification Area Tools

The product portfolio Rationalization & Product Portfolio Planning

The product design Design for Manufacturability

Part and raw material variety Standardization

Manufacturing processes Lean, continuous flow mfg.

WIP inventory Just-in-time

Finished goods inventory Build-to-Order

The distribution network BTO & ship direct

Order entry Configurators & data links

The vendor base Vendor/Partnerships

Supply chain logistics Product line rationalization
Product design for lean production


The Supply Chain Cost Management: The Aim & Drive Process for Achieving Extraordinary Results

Hardcover: 256 pages
Publisher: AMACOM (October 31, 2007)
Language: English
ISBN-10: 0814474756
ISBN-13: 978-0814474754

• identify critical costs in the supply chain

• measure secondary and tertiary costs

• develop strategic options

• reduce, change, or eliminate activities that produce costs

• implement an action plan

• verify the plan with cost monitors

• continually improve and modify the process


Excerpts from the Book: Build-to-Order & Mass Customization, David M. Anderson

Original Knol - 460
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