Reducing Wastage in the Supply Chain: Mantra for Success

30 Aug, 2021 12:15:43 PM / by Transport Corporation of India Ltd



Blog banner - Mr. Jasjit Sethi

Waste is now significant. It is not just the literal meaning that it stands for, but rather the massive significance that it holds in predicting the pulse of the organisation.

At a time when organisations are in for cutthroat competition with regards to attaining supply chain perfection, reducing wastage in the supply chain through efficient processes can go an extra mile in lifting the company to newer heights through better organisation at hand.

Developing lean methods for supply chain management continues to be one of the most
effective methods for reducing waste.

Here's a feature story by Logistics Insider (April 2021), in conversation with Mr. Jasjit Sethi, CEO, TCI Supply Chain Solutions wherein he underscores the importance of forecasting for the overall efficiency of the supply chain.


“Foremost in a supply chain is forecasting be it demand or production followed by the bottlenecks of material, production and logistics”, said Mr. Sethi.

He added, “The tools we use first is digitalisation of almost every supply chain, done in-house even of most scattered supply chain, providing a glass pipeline from source to consumption. This forms the basis of decision making for inventory, logistics, and alternative sources.

Along with the digital, the physical network also has to be in sync and as agile –“Logistics at the speed of data” is the world we are trying to build. Having said that, logistics is not a race but a rally: predictable, safe with incremental and sustainable improvements over time.”


There are four areas in the entire supply chain that form the core of the supply chain that can lead to more savings through better management.

These four primary categories where cost-savings can occur are:

a) Order Processing

b) Inventory & Raw Materials

c) Material Acquisition

d) Compensation & Reimbursement Processes

Order Processing Typical internal procedures for handling order processes that involve manual work includes order processing via fax or mail, manual entry of data and information of inventory management, which is a tedious and unnecessarily wasteful stream of work. To streamline the process for the use of paper, toner and man-hours, an Enterprise Resource System (ERP) or accounting system can help streamline the process.

In addition to that, Warehouse Management Systems can help in the ordering and monitoring of inventory and raw materials, as well as decreasing the man-hours required to physically check inventory levels.

These two systems can be used simultaneously to create a seamless process from ordering to inventory management. As these systems can be expensive, it is recommended to complete an ROI analysis of the cost savings and the expected timeframe to reach those results.

Inventory and Raw Materials Implementation of just-in-time (JIT) inventory practices will lead to significant increase in cost savings by cutting down on the cost of inventory, increase inventory turn and assist on gaining a perfect-order measure of close to 100%.

The cost of warehousing inventory will be obsolete once electronic communications simplify the process of ordering raw materials, leading to reduction in communication errors and overhead costs.

With JIT practices, the supply fulfillment process will reflect exactly what is needed for order fulfillment, without incurring additional costs including warehousing, rental and utility costs, as well as insurance and taxes.




Topics: Supply Chain, Logistics