SUPPLY CHAIN UNDER “PRESSURE” AS COMPANIES REDUCE COSTS

A recent report by Boston Consulting Group (BCG) shows that 65% of executives are prioritizing reducing production and supply chain costs.

Issues related to the supply chain will receive special attention in 2024. A recent BCG survey found that 65% of executives are paying “attention” to supply chain and manufacturing costs as the two biggest areas where businesses can save money. . This went beyond traditional cost reductions such as labor and non-labor costs (reported by about 52%).

BCG surveyed more than 600 global executives across a variety of industries to produce the report “Cost and Growth Guides for CEOs.”

Unsurprisingly, respondents cited geopolitics as a story that will test the resilience of supply chains in 2024. The results were overwhelmingly that investment was needed to maintain resilience. Anise.

Overall, reducing costs is a top priority. According to the survey, 83% of executives said their companies were able to save on initial costs, but 41% said those costs increased again.

The survey also shows that talent attraction/retention and digital innovation are important issues for cost management. Executives said talent retention (56 percent) and digital disruption (38 percent) top the list of ways companies operate in the face of cuts. expense.

“C-Suite executives share that cost challenges have been exacerbated by the difficulty of finding qualified talent in an increasingly tight labor market. Attracting and retaining people with the right skills is a top concern for leaders in healthcare and technology, media and telecommunications. Cost initiatives are impacted by digital and AI-enabled advancements.”

In terms of where companies are working to reduce production and supply chain costs, procurement, logistics, distribution and warehousing are the areas of focus. In contrast, investing in digital for lean manufacturing and accelerating planning processes are seen as just areas that can help deliver cost savings.

For companies interested in reducing costs, BCG says the results can be achieved faster by “unlocking resources” to reinvest in areas that drive growth, including supply chain modernization, AI and human resource development.

“To support business development, company leaders must build a new culture for the business. By engaging many people, turning plans and strategies into measurable actions, viewing failure as an opportunity to learn and providing the leadership team in the business with the support and resources it needs. they need to balance costs and growth goals,” the report said.

Of course, “Many are taking advantage of the landscape to cut costs. By applying comprehensive measures, organizations and businesses take advantage of mobilizing capital to invest in strategic priorities to build competitive advantages for the future."

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