Supply chain cost reduction is a pretty basic concept, right?

Not so fast.

At the recent virtual Gartner Supply Chain Executive Symposium, analyst Farrah Salim said in a presentation on the topic that there are critical distinctions between supply chain cost reduction and what she called cost "optimization.

Those differences are nicely summarized in the graphic below from her presentation:

The contrasts are fairly self-explanatory, and can in a sense be summarized as a more long term orientation for cost optimization, and more short-term, quick "fix" cost tactics for companies pursuing just cost reduction. 

Does the distinction make sense to you?

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