Doug Hudgeon – The Cost Reduction Tip: Simplify Your Supply Chain

Doug Hudgeon – The Cost Reduction Tip: Simplify Your Supply Chain






January 8, 2019

hudgeon12By Doug Hudgeon

The Cost Reduction Tip

Over the past 12 years I’ve looked at the sourcing, procurement and payments processes in 150+ companies spanning every continent except Antarctica. At a detail level, the best of these companies took very different approaches to managing their suppliers – approaches tailored to the subtleties of their industry, geography and economic climate.

But the best shared one common trait: Their supply chains were as simple as possible given the constraints of their operating environment.

That’s not to say they weren’t sophisticated – often they were (in a surprising number of cases they were not) – but they were all simple.

Commonly, but not universally, the best companies regularly tendered categories that didn’t matter much. Commonly, but not universally, they would set up longer term relationships (with both parties incentivised to meet a common goal) in the categories that were critical to their ability to deliver value.

In all categories, their sourcing, ordering and payment processes were as invisible as possible. Many of the best companies did not even view their supply chains as strategic. I

n their drive to reduce costs, keep their operations as simple as possible and eliminate bureaucracy they just ended up with an efficient supply chain.

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

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Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

  • What are the five flows of SCM?
  • Why are they important TO YOU?
  • How can you map, track, and optimise these flows to serve YOU?
  • What is the importance of difference between "Supply Chain" and "Value Chain"?
  • What are the stellar case studies of each of the five flows?


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  • Will simplifying the supply chain process overall performance will usually be enhanced?

    will be waiting for your response

  • Thanks for sharing such a useful tip to reduce cost. I’m in the process to analyze my business process and I’ll keep this tip in mind while working on it.

  • I actually really appreciated the information in this post. I liked your point about the simplicity of Supply chain as you said in this line of the blog “keep their operations as simple as possible and eliminate bureaucracy they just ended up with an efficient supply chain”. I think that it would be important to have proper procedures put in place right from the get-go in order to avoid problems down the road. Thanks for sharing this.

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