A shared priority across all stages of the supply chain and all aspects of supply chain management is to reduce operational costs. When you reduce operational costs, you have more money to put back into the company for further improvements and more money to offer workers, allowing you to expand your workforce or better compensate and incentivize current employees. That doesn’t mean that reducing operational costs is easy, or that it doesn’t sometimes involve an upfront investment. While spending money to save money might not seem intuitive, by investing in a quality, affordable supply chain management system once, you can see financial returns for years to come. If you make the right decision on a system and use that system to its fullest potential, you’ll soon find that you’ve not only made your investment back, but far surpassed it in saved operational costs and increased revenue. Let’s dive into some of the ways that a supply chain management system can help you reduce your operating costs and see greater financial returns.


Increase Your ROI by Investing in AirFinder Everywhere

  • Loss Prevention. Reduce the amount of loss that occurs during the supply chain process
  • Location Coverage. AirFinder Everywhere uses a combination of GPS, Cellular, and WiFi to determine location everywhere
  • Security Alerts. Know when a delay in shipment has occurred so the problem
    can be addressed immediately.


1) Know Where Your Assets Are Located At All Times

One way supply chain management systems can reduce operational costs is by ensuring that you know where your assets are at all times. Much of the unnecessary costs associated with the supply chain and logistics as a whole consists of replacing critical equipment or cargo that’s been either misplaced or stolen. If you don’t know where an asset is located, you can’t use it, and you may assume that you simply don’t have enough. This leads to the decision to buy more of a given asset, when the reality is that you’ll probably stumble across the original, lost asset somewhere down the line, rendering the money spent to replace it wasted. For obvious reasons, this increases your operational costs unnecessarily, spending money where it isn’t needed and potentially detracting from other initiatives.

Many businesses attempt to address this challenge through manual inventory or barcode scanning strategies. However, this makes it impossible to truly account for lost or stolen assets. The point of lost or stolen assets is that they are not where you expect them to be; if they aren’t in the last known location as per the inventory or scan, those strategies cannot help you locate them. You’ll know that they exist, but you won’t know where they are, and they’ll become ghost assets – in the system, known to exist, but untraceable and unusable. By using an asset tracking system for supply chain management, however, you can achieve visibility of your assets no matter where they’re located. Simply affix your critical assets with the proper tags, and if they’re ever misplaced, you’ll be able to look up their current location through the system and retrieve them, helping you prevent overspending on unnecessary replacements.

2) Ensure Timely Preventative Maintenance and Inspections

Using IoT in supply chains can also reduce operational costs by allowing you to perform preventive maintenance and inspections in a timely manner. Companies don’t just have to replace assets because they’ve been lost or stolen – they also have to replace assets because they’ve been worn down or damaged beyond affordable repair. Even when they are not damaged to this extent, certain parts might be. For trailers especially, even just replacing these parts regularly can quickly add up to create hefty purchasing fees. While these costs can’t always be fully avoided, at times, issues can escalate and become more expensive to remedy through too much use or too much time between inspections. If a problem with a trailer or other piece of equipment is caught quickly, the repairs will often cost less and the need for a complete replacement of the asset will be greatly reduced.

In order to ensure effective preventative maintenance and inspection schedules, operators require complete understanding of when, where, and how equipment is being used. How many miles has a trailer been on the road? What type of terrain has it been used on? How long has it been since it last sat idle or had a full inspection? Are there any pre-existing issues that have been observed for this specific unit? All of this information is absolutely critical for effective preventative maintenance and inspection scheduling. However, especially for companies that are busy or have a larger number of trailers or other assets in active use, it can be difficult to keep track of when each individual asset is due for maintenance or inspection. With an asset tracking system for supply chain management, you’ll be able to maintain detailed and accurate data on the use of trailers, equipment, and other assets that you can then use to inform preventative maintenance and inspection scheduling, allowing you to identify and address any problems before they escalate and become more expensive.

3) Optimize Your Operational Process and Reduce Bottlenecks

A supply chain management system can also help you save operational costs related to labor and overtime expenses by providing the data you need to optimize your daily processes and reduce bottlenecks. It’s one thing to pay your employees their usual wages and planned overtime – for these expenses, you know exactly how much you’re spending and when you’re spending it. It’s one of the most basic areas to look at while you’re planning your business’s budget. However, you can’t budget for unexpected overtime as effectively, although it will inevitably occur throughout the year. Unexpected overtime and unexpected labor expenses are largely the result of process inefficiencies, bottlenecks, and disruptions. This overtime occurs when a given task is expected to be completed at a certain time but instead takes longer. On top of costing the company money, it can be frustrating for workers who are expecting to be able to go home at a certain time and are instead repeatedly asked to stay behind due to setbacks that are rarely their fault. Some of these reasons might include bottlenecks or disruptions further up the line. While it’s difficult to entirely prevent these from happening due to their unexpected nature, a dedicated supply chain management system allows operators to better prepare their processes for these eventualities and mitigate challenges far more quickly when they do arrive, lessening the need for overtime expenses.

A good way to prepare for and better address the challenges presented by bottlenecks and other disruptions is to gain full visibility over every aspect of your process so you can embrace supply chain success. When you gain this visibility, you better understand how your process works, where it’s both the strongest and weakest, and how those processes visibly stall in a way that indicates the presence of a disruption. The reason most bottlenecks or disruptions result in overtime expenses is, after all, that they are not identified until they’ve already escalated. One or two minor setbacks are easily overlooked or brushed off; it’s only when the issue has escalated that it becomes noticeable. With full process visibility, however, those small setbacks become a lot more noticeable and can be addressed before the problem escalates and begins affecting others too much. By employing an asset tracking system for supply chain management, you can keep track of how long assets linger in a designated location in order to assess how long that stage of the operational process is taking. If it lasts too long or shifts in a way that is out of the ordinary, you can take immediate action to address the problem before it escalates to the point that workers must stay behind and drive up labor expenses. This also has the added benefit of helping you complete more work in less time, not only saving you money, but making you more money.

4) Maintain Compliance to Avoid Legal Fees

Other operational costs don’t originate from within the process and its functions, they originate from outside of it. This is the case with legal fees, which can be accrued due to non-compliance with government regulations and industry standards. These regulations are in place to ensure the safety of the end user and the ethical conduct of your business; failure to comply results in legal action. In this situation, you’ll have to pay legal fees to go to court, and if you are found non-compliant, you can accrue fines that can vary based on the nature and extent of your violation. And these losses are before taking into account any revenue that’s lost if you are required to shut down operations until the issue is resolved. Even beyond that, lost reputation might translate to lost customers and needing to lower your costs in order to appease current customers and attract new ones all over again. You don’t even need to be in direct violation for these consequences to occur. Due to the nature of many of these laws and regulations, documentation and proof is a priority. If you cannot reliably prove your compliance when it’s demanded, your company is considered to be functionally non-compliant and legal action is taken. Throughout the legal process, you might be able to acquire what you need to prove compliance, but this still means paying to go to court and losing revenue from company inactivity. Luckily, a technology solution for supply chain management can help you both ensure and prove your compliance with standards and regulations whenever it’s needed without taking up too much of your time.

The best kind of supply chain visibility solution for ensuring and proving compliance is a system that can both monitor the aspects being assessed by the regulations and provide automated documentation to prove adherence to those guidelines. Naturally, then, what’s best for your company will depend on what you’re responsible for shipping and what regulations correspond with those products. For monitoring conditions such as temperature or humidity, asset tracking technology provides the best option. Cold chain monitoring is especially critical because of the strict regulations surrounding the baseline temperature of food products and pharmaceuticals during the transportation stage. This is because these products are going to be consumed, and if they fall out of a given range, they can make the user ill or be rendered ineffective. With this in mind, it makes sense that regulations are going to be extremely specific and strictly enforced. With an asset tracking system, operators can affix an asset tag to individual pallets, units, containers, or products to monitor their temperature throughout the journey. This can help detect when a singular product is falling out of range even when the trailer’s holding temperature, allowing issues like blocked vents or improper loading to be addressed when operators observe the fluctuating temperature. The data records that are produced by the system can then be used to prove compliance if it’s ever questioned, allowing operators to avoid the costs that come from not meeting or being able to prove compliance.

Invest in an Affordable Supply Chain Management Solution

Reduce your operational costs quicker and more efficiently with our AirFinder Everywhere asset tracking solution for supply chain management. With a wide array of use cases and comprehensive data reports, you have access to the tools you need to pursue your company’s future. To learn more about what using our solution could mean for you and your company, book a demo with our experts to get started today.

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Written by Makenna Dudley

Makenna Dudley is a Marketing Associate for Link Labs, with practical experience in written communications, media writing, and additional forms of content creation. She has a bachelor's degree in Mass Communication.

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