Build A Cost-Conscious Culture In Your Supply Chain Organization

Supply Chain Organization


Build A Cost-Conscious Culture In Your Supply Chain Organization

Supply Chain Organization

by Doug Hudgeon

The Cost Management Tip

Global Supply Chain Group - ddc

Building Cost-Conscious Culture management in your organization is the most important tip I’ll deliver in this series of posts.

If you can create a cost-conscious culture in your organization then you’re pretty much done and dusted. Nothing else you do will cut costs more.

Recently, I spent the better part of a year looking at cost savings opportunities in 120 companies across four continents. I found that the most efficient companies had one thing in common:

Their staff – from the CEO down to the receptionist – were incredibly cost-conscious.

Companies with staff who continuously questioned whether they were achieving their goals in the least expensive way were consistently more efficient than their more profligate competitors; regardless of the systems and processes, they had in place.

The cost-conscious culture in companies achieved and maintained their low-cost base by reducing demand and ensuring they identified the simplest solution.

If they didn’t need to buy a particular product or service, they wouldn’t buy it.

If they did need to buy something, they would buy the lowest cost product or service that met their minimum requirements.

The outstanding question, of course, is how do I create a cost-conscious culture in my organisation?

In the remaining tips in this series, I will give my views on achieving this and improving the operating efficiency of your organisation. Related web sources In the tips, I will link to an article that supports the tip.

Some Articles Supply Chain Organization

The below article is an exception in that it provides a cautionary tale for those companies embarking on a cost reduction journey. The article compares a company with a culture based on customer service to a company with a culture based on cost savings had this warning for both companies: “there are countless efficiency ideas inside his company [Customer service oriented company] which never see the light of day because the happiness culture shuts them down.

Similarly, there are customer satisfaction breakthroughs which never surface at the low-cost manufacturer I mentioned earlier where everyone is implicitly taught to only support cost-saving ideas” Related books The End of Growth: Adapting to our new economic reality I haven’t bought into the thesis of this book.

Whilst I believe that we are in a sideways market and that, for the next few years, most companies will only improve their operating efficiency through cost reduction;

I don’t believe that the global economy has peaked. Over the past 200 years, too many people smarter than me have predicted this and been proven wrong.

Nevertheless, the book is well written and well researched and worth reading. “Economists insist that recovery is at hand, yet unemployment remains high, real estate values continue to sink, and governments stagger under record deficits.

The End of Growth proposes a startling diagnosis: humanity has reached a fundamental turning point in its economic history.

The expansionary trajectory of industrial civilization is colliding with non-negotiable natural limits.

Richard Heinberg’s latest landmark work goes to the heart of the ongoing financial crisis, explaining how and why it occurred, and what we must do to avert the worst potential outcomes.

Written in an engaging, highly readable style, it shows why growth is being blocked by three factors:

3 Factory of Supply Chain Organization

  • Resource depletion
  • Environmental impacts
  • Crushing levels of debt

These converging limits will force us to re-evaluate cherished economic theories and to reinvent money and commerce.

The End of Growth describes what policy makers, communities, and families can do to build a new economy that operates within Earth’s budget of energy and resources.

We can thrive during the transition if we set goals that promote human and environmental well-being, rather than continuing to pursue the now-unattainable prize of ever-expanding GDP.”

Doug Hudgeon who is lawyer and vendor management professional who has branched into finance and accounting shared services management.


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Today, Vivek and his partners are among 20-30 people on the planet earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek's journey:

  • Started in 1983 as a merchant navy cadet at 18 years age, worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.
  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
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The trend of outsourcing continues to grow unabated with the whole gamut of services, from simple to mission-critical tasks. There is not a single company on earth that does not outsource anything. It is not just about cost arbitrage, it is also a finer expression of division of labour at the organisational level. Like all leverage, outsourcing is a double-edged sword too. On one hand, it allows you to do more, faster. On the other hand, if it goes bad, it can easily kill your business. If you do not believe that is possible – you can google the Fox Meyer saga from the 90s and see for yourself.



Businesses Are Chained By Unseen Chains. If You Are Looking For Ways To “Unchain Your Corporation” A Successful Business Transformation Is Required.

Successful Business Transformations Are Difficult, Yet Rewarding.

Business Transformation Is Fast Becoming A Question Of Survival In The Modern Globalised Era.

Modern Supply Chains Integrate Businesses And Economies Faster By Systematic Information Sharing From Internal And External Sources.

Companies Can Multiply Profits By Progressively Ramping Up Cohesion And Collaboration Of All Moving Parts In B2B Network To Achieve Tighter Integration.



It is generally accepted that environmental consciousness is now changing to environmental proactiveness as organizations are discovering that it makes good commercial sense.

Boards are asking the management to review their policies related to environmental norms, not only to bolster their corporate social responsibility aims, but also because consumers are asking for greener supply chains

It is also widely agreed that consumers will increasingly prefer to buy more and even pay more for products or services provided in an environmentally sound manner.