Reduce COGS with Complexity: Issue 14

When I talk to brands, they often have a suboptimal supply-chain setup.

The reason is simple: they don’t want complexity. More spreadsheets, more things to worry about.

But allowing for complexity also means reducing COGS.

A few examples:

Multi-echelon inventory + transfer orders
Cut expedites and write-offs; rebalance aging lots to faster channels → effective COGS down via waste reduction.

Cross-SKU pooled RM purchases
MOQ relief + price tiers → immediate unit price down.

Regionalize co-mans
Add a West Coast filler for West demand (or rotate quarterly runs).
Shorter lanes, higher truck-cube utilization, fewer expedites → lower landed cost per unit.

Have you ever simulated your optimal supply chain?
→ Where should I put my warehouses, and which co-mans and suppliers should I use for the lowest COGS?

Imagine you could handle all the complexity in the world and have all the data and recommendations available in one go.

You would probably:

… use different satellite warehouses across the US and Europe, not only one handling everything just because it’s easier.
… put warehouses closer to your customers.
… make sure expedited freight is minimized.
… not source your packaging from a wholesaler; instead, take MOQs into account, place bulk orders with a manufacturer, and transfer them to your satellites accordingly.

The opportunity is way bigger than you think.

Which parts of your supply chain could be optimized?

-Leon