June 16, 2018

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 Tools and Areas to Which They are Applicable

The product portfolio rationalization  -  Product Portfolio Planning

The product design - Design for Manufacturability

Part and raw material variety reduction - Standardization

Manufacturing processes - Implement  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 reduction -                     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

The Page http://www.halfcostproducts.com/index.htm is also very useful page to read

Supply Chain Industrial Engineering - Video Presentation



Supply Chain Engineering - One Year Masters Course - Georgia Institute of Technology - IE School.

They should have titled the course

Supply Chain Industrial Engineering



Interesting Web Pages and Blog Posts

7 ways everyone can cut supply chain costs

How to Reduce Costs through Supply Chain Network Optimization

Original Knol - 460

Updated 2018 - 17 June 2018

  17 June 2016,  4 July 2014, 24 Nov 2011, Earlier published on Knol

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

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