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Surname 1 Student’s Name: Professor’s Name: Course: Date: Cost Reduction in SCM Process The returns of a business can skyrocket if sufficient savings are met in the supply chain costs. To realize this degree of saving, then the need to know where to look at is essential (Mpwanya and Van Heerden). There are 7 critical areas which consistently will offer chances for reducing supply chain costs for all enterprises regardless of their size or industry. Since these seven gaps are applicable to nearly every supply chain management aspect, then it is easy to be systematic in the improvement approach. This is significant owing to the wide scope of the supply chain management that stretches beyond a company to include both consumers and suppliers. In addition, the systematic approach is critical due to the variable needs supply chain managers ought to manage- small volume and big volume; frequent and infrequent deliveries, small orders and large orders, temperature control, special handling requirements and so on. The seven areas which can offer consistent cost reduction gaps in the supply chain for any company are as follows. 1. Customer service The requirements of the consumers should tailor the supply chain structure and strategy. It is an application of principles of marketing, offer customers with what they require besides avoiding cost addition for things which they perceive no value (Vingkam). It is noteworthy to
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Surname 2 recall that when consumers perceive value in a given level of service, they will anticipate for it. As such, it is important to ensure that the entire company comprehends this in order for the benefits of aligning customer service and customer needs. 2. Improve the utilization of space Keeping up inventories and supplies in a warehouse costs money. This means that if an evaluation is done regarding how well the storage space of a company is being used, it may turn out that the firm is paying for a space that is too much. In addition, money is as well wasted
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