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New consultancy gets to grips with supply chain costs

[ July 29, 2011   //   ]

Lack of communication between different departments of the same company are driving up supply chain costs unnecessarily, according to the director of a new consultancy. Tony Leach, solutions director at Virtualized Logistics, a new consultancy set up by logistics specialists SBS Worldwide, cites examples such as a purchasing department bulk-buying to achieve lower unit costs but causing chaos for a warehouse manager tasked with reducing inventory or changing packaging – for cost, point of sale or environmental reasons – and forcing wholesale alterations in container utilisation.

Leach says: “Each department is so focused on its own activity and targets that it does not consider the impact of their actions or policies on the rest of the company can have further up or down the supply chain,”

In another example, the purchasing team had described a product in a certain way which the import department then used when selecting a commodity for Customs classification purposes, which resulted in the company paying higher than needed excise duties.

Virtualized Logistics aims to help its clients build effective supply chains to achieve high performance from strategy development through to implementation, re-engineering the supply chain around the business case, making staff more productive, increasing efficiencies across the business and enabling organisations to seize opportunities as they arise, says Mr Leach.

Mr Leach and technical director Tyrone Omidi have also designed an enterprise supply chain software solution for their associate company SBS Worldwide which has recently been launched in the book publishing industry.

Initially, Virtualized Logistics will be targeting medium-sized companies, especially those sourcing from India or China. “

Leach adds: “We have been amazed by how many companies do not really know how much their logistics, or other processes, cost them. So, of course, they do not know where to start to create efficiencies. And, needless to say, we want to improve customer service at the same time.”