Optimization Still Saves Double Digits — Why Aren’t You Using It?

Sourcing Innovation has been publishing for eighteen (18) years (over which it has published over 6,000 articles — inspired by the GruntMaster), with the first article published on June 15, 2006 with regular coverage since, including a push for all events to use sourcing optimization in Supercalifragilisticexpialidocious.

The reason is simple. It’s one of only two technologies that has been proven to identify savings in excess of 10% for almost 20 years (the other being spend analysis). The International Business Times recently reminded us of the power of this solution when it published an article on how Procurement Expert Sylvia Zhou Reduces Operational Costs by 13% Through Strategic Supply Chain Optimisation.

When we read how Zhou’s shift in sourcing strategies and supplier relations management allowed for a drastic reduction in operational costs by 13%, it reminded us of how decision optimization is not restricted just to sourcing and logistics, where it has traditionally been used, but saves across the supply chain, as discussed in our recent post on comprehensive optimization.

According to Zhou, with her team, she assessed their entire supply network, identifying bottlenecks and inefficiencies. By partnering with suppliers aligned with their operational goals and technological capabilities, they could streamline processes and cut costs. This approach worked so well that post-optimisation, her company reported a 33% increase in profits, attributed mainly to the reduced cost of goods sold and improved operational efficiencies.

And the best way to identify logistics efficiencies, product-based savings, and opportunities for operational efficiency is optimization. Sometimes there’s no better way to identify significant savings. So, go forth and optimize!