It's time to circle the supply chain wagons: Should you start by cutting costs or cutting revenue?
12-15-2008
"To make smart cuts to your supply chain, you should first understand which elements represent the core of your business," said Burkitt. "Which customers are the most profitable and which are expendable? Which products do customers truly care about and which are just window dressing? What level of service quality do key customers need and expect?
"Ironically, the best way to start cutting costs may be to start cutting revenue -- specifically the 'bad' revenue that undermines profitability. Decide which revenue streams are not worth preserving and then target cost reductions," said Burkitt.
The idea of cutting revenue in a downturn might seem crazy, but simply put, some customers are not worth serving and some products are not worth selling. The shrinking margins that accompany an economic slowdown often only make the problem worse. Executives need to use top-down revenue cutting and bottom-up cost cutting approaches.
Project Announcements
Little Leaf Farms Plans Coffee County, Tennessee, Production Operations
07/02/2025
White Rock Truss & Components Expands Lee County, Virginia, Operations
07/02/2025
Fox Tank Company Plans Coshocton, Ohio, Operations
07/02/2025
Ascentek Expands Shreveport, Louisiana, Operations
07/02/2025
ProBio Establishes Hopewell, New Jersey, Gene Therapy Operations
07/02/2025
22nd Century Technologies Expands Fairfax County, Virginia, Headquarters Operations
07/02/2025
Most Read
-
20th Annual Area Development Gold and Silver Shovel Awards
Q2 2025
-
First Person: Joe Capes, CEO, LiquidStack
Q2 2025
-
The Legal Limits of DEI in Incentives Agreements, Hiring, and Contracting
Q2 2025
-
From Silicon to Server: Mapping the Data Center Supply Chain
Q2 2025
-
39th Annual Corporate & 21st Annual Consultants Surveys: What Business Leaders and Consultants Are Saying About Site Selection
Q1 2025
-
Rethinking Life Sciences Site Selection in a Resilient and Dynamic Market
Q2 2025
-
First Person: David Robey, Co-CEO of QTS Data Centers
Q2 2025