3 Points of Profitability the C-Suite Wants to Hear

Published : September 23, 2015

Supply Chain Profitability

Gathering, analyzing and manipulating data is the lifeblood of the modern business, and in recent years it has virtually revolutionized shipping, logistics and warehousing. No longer relegated to merely shipping and receiving, the supply chain is the backbone of corporate planning as much as day-to-day operations. The shipping solutions and methods selected on the warehouse floor translate to direct value for the rest of the company, automatically optimizing dozens of different profit aspects as they work. This value chain power manifests in three main areas:

1. Value in Planning

Information on orders—incoming, outgoing, trends and lulls—is directly generated and verified within your logistics operations. While the customer service department may have a line into incoming order streams, they generally are not privy to components, materials and supplies ordering, the other half of stock movement within a company. The supply chain can offer up this valuable data to use as guides in planning and forecasting necessary orders. Supply Chain Quarterly's Michael Watson notes that analytics does not simply entail looking at this data for patterns, it's actively working with the data you have gathered, plugging it into equations and scenarios to test potential business moves without risking resources. Trial and error can carry frighteningly weighty costs for large companies; data derived from the supply chain can all but eliminate it for testing purposes. 

2. Value in Sustainability

Eco-friendly measures and green marketing are here to stay, and that means that the supply chain needs to follow suit. Supply chain managers are in the trenches and can offer the best advice on which packing materials and processes are sustainable—both in terms of the planet and logistics operations. Brandon Taylor of DirectGreen explains that logistics professionals can also advise their respective companies to partner with various eco-friendly firms. These partnerships can be built either as a complement to in-house green initiatives or to outsource ethical efforts to allow the company to focus on internal matters. As the individual in your company closest to logistics shipping solutions and material providers, a supply chain manager may know of eco-friendly alternatives to current products that your company may not even be aware of. 

3. Value in Earning and Reduction

Shipping costs typically comprise a good majority of your regular logistics budget, which means that supply chain managers are uniquely poised to recognize savings opportunities and extract more profit from the sales a company makes. Simple efforts like reducing package volume to save on DIM pricing or suggesting a swap to polybag mailers over boxes can save a company staggering amounts of revenue in the long run. A well-honed supply chain also delivers products to a customer quickly and accurately, ultimately elevating company perception and, ideally, encouraging repeat business. And when it comes to sourcing materials and finding partners, the supply chain manager can be the first line of defense against unnecessary spending. He or she is a likely candidate to find the best "fit" for sourcing, Prableen Bajpai of Supply Chain 247 notes in an article on Starbucks' supply chain. 

Each of these three areas of opportunity can increase profits or perceptions or decrease both financial and ethical costs, ensuring that shipping solutions solve much more than the immediate need at hand. Properly balanced, the knowledge and advice of a supply chain professional can help safeguard a company's coffers against the variable tides of business, keeping both the end customer and C-suite pleased. Are you hitting these points in your daily operations, or do you still have room for improvement? If the answer isn't a resounding "yes," it may be time to take your logistics professional out to lunch. 

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Topics: Supply Chain Logistics

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