Now, if you’re working in supply chain management, one of the things that you’re constantly striving to do is to save cost. So let me give you three or four pointers that I found over the last 20 years or so that in most businesses will help you save costs in your supply chain. Hi, this is Rob O’Byrne from Logistics Bureau and I thought we’d get out of the studio today and actually get out into Parramatta Park and get a bit of fresh air. I came out here, it’s seven in the morning, I thought it’d be nice and quiet but there’s all kinds of really cool things happening in the park. We got all the cyclists out and lots of runners and we’ve even got a group of people doing Tai Chi, let me just swing around here, so you can see them behind me, so what we’ll do is we’re going to find a quiet spot and I’ll give you those tips on saving costs in your supply chain. Okay, so we’ve found somewhere a little bit quieter. This is a cute little cottage right middle of Parramatta Park, if you live in Sydney, you really ought to get out and have a look at Parramatta Park, it’s a really cool place. Okay, so reducing costs in your supply chain. Let me give you three or four key areas where you can reduce supply chain costs, and this is based on working on about 1,400 projects all around the world helping people reduce costs. So, number one, you need to know your costs in the supply chain. That might sound like a really dumb question, but the first thing you need to do is to establish those costs and really understand them in detail, and the best way to do that is a cost to serve analysis. If you’ve never done a cost to serve analysis, it’s not that hard to do, and in fact if you jump on, I’ll give you a link to some some blog posts later, which tell you exactly how to do it. You basically need to understand what is the cost for your business in delivering each of your different product types to each of your different customer types, now it’s really important. So imagine, what have I got in my pocket? Imagine we’re selling mobile phones, if we’re selling these to individuals all over the country and we’re sending them out, you know, in Korea overnight or whatever, that has certain cost. If we’re selling them to retailers in boxes of ten, that’s going to be a cheaper cost, because we’re still processing just one order. It’s going to be a lot less warehousing cost because we’re just picking up a case of 10 and we’re sending that out. If we’re going to be sending them out, you know, by the hundreds, so our ncost per unit is a lot less. Phones are probably not a great example because people buy them generally individually, but you get the idea. You need to understand the cost to serve all the way through your supply chain. That will throw up all kinds of opportunities, it’s going to peel back the onion for you, so you can see really where you can reduce those costs. And what are some of the things that are going to help you reduce costs? Let me give you a couple of those, because when you when you find those high cost areas, you want to try and reduce them. One is going to be order size and related to that is customer service offer. If you’ve got a blanket customer service offer for all your customers, I’m going to say it’s wrong. If you want to disprove me comment below, but it’s probably wrong I’ve never seen a business where one customer service offer fits every single customer. Having said that, I mean pizza delivery or something, I don’t know, but it’s very, very rare, so you need to understand your service offer and how that drives cost and the key thing there is order size and frequency because that has an immediate impact on your cost to serve, so establish cost to serve, look at customer service policy. Next one, if you’re not doing sales and operations planning, you probably should be. Again, very few businesses don’t benefit from that and if you’re not sure what sales and operations planning is, it’s basically a planning process that goes right across all the key functions in the business to enable you to forecast your demand accurately, look at your supply and kind of load balance all of that and make sure that you’re offering the best service in the most efficient way. So cost to serve, understand order profiles, sales and operations planning, we’re probably then getting down into the nitty-gritty of actually how you’re moving product. Your warehouse can be very inefficient, so have a look at the flow through the warehouse, and maybe you haven’t done slotting in the warehouse, if you don’t know what that is, I’ve got some articles on the blog, and look at the different storage and picking media that you’re using, and then in terms of transport, that’s probably another key one, and what people try to do is they go and beat up their transport companies to try and get a lower unit cost for their transport. That often doesn’t really give you any benefit, because transport isn’t a high margin business anyway and it’s very competitive. Where people are generally paying too much for transport, it’s because they’re buying the wrong service, so just think about that for a minute. Are you sending things overnight when actually you know two day service would do? Are you sending it out you know to be delivered within a couple of hours by courier when next day would do? And so those are the sorts of things to look at in transport, what service are you actually buying. Okay, so there’s some quick tips on how to reduce costs in your supply. I’m just gonna raise my voice a bit because we’ve got the peloton going past, it’s a very popular cycling area here, so there’s some tips on how to reduce costs in your supply chain, understand the costs through cost to serve, and then start getting into things like S&OP, and looking at network, and warehousing, and transport, and so on. Now that was just a very quick summary, if you want more information on this, I’ve got loads of it for you, just go on to our blog, you may be watching this on the blog, but if not, go to logisticsbureau.com, and on the homepage there, there’s a button on the top right which says blog, go in there and it’s all sort of categorised as articles, and videos, and guides, and all sorts of things. Years and years worth of material there and I’m sure you’ll find what you want. If you happen to be watching this and you live and work in Sydney, then there’s an even better way that I can give you more information, because on the 26th of October, I’m actually running a full day coaching program in Sydney 26th of October in Sydney, it’s $87 for the day, it’s a charity event so the $87 dollars will go to charity. It’s fully-catered and what I’ve done is I brought in 20 experts from all areas of industry to help share their knowledge with the people who are coming along for the day. And it’s not kind of sit there and death by powerpoint, not at all, it’s all small-group coaching tables, different topics, different tables, you pick what you want to know more about, if it’s warehousing or sales and operations planning, I’ve got a fantastic guy on sales and operations planning coming along. You just move around through the day and they’ll be little many presentations and discussions, and it’ll been awesome day, so come along to that if you’re in Sydney on the 26th of October. I’m just going to have a quick look at my phone because I’ve got this fantastic little app from Eventbrite that tells me how the booking’s going, and we’ve got 21 tickets left, so I’ll make sure there’s a link if you want to come along to that, and a link to the blog. So, saving costs in your supply chain, a few pointers, lots of information on the blog, come along to a full day coaching if you want to learn more. I hope that was helpful.