For decades, Australian manufacturing supply chains were designed around a relatively simple premise: global sourcing, predictable lead times, steady demand, and incremental improvement. Cost efficiency was king, inventory was treated as a necessary evil, and supply chain was often viewed as an operational function rather than a strategic one. That world no longer exists.

Over the past five years, Australian manufacturers have experienced a sustained period of disruption that has fundamentally changed how supply chains are designed, governed, and invested in. Global shocks, local labour constraints, inflationary pressure, evolving customer expectations, and rapid advances in digital technology have combined to force a rethink of what “good” supply chain performance actually looks like.

This article explores how manufacturing supply chains in Australia are changing, why those changes are proving so challenging, and what manufacturing leaders need to do to stay competitive in this new environment.

The end of “set and forget” supply chains

One of the most significant shifts in Australian manufacturing is the move away from static, long-range supply chain designs.

Historically, many manufacturers invested heavily in network design, sourcing strategies, and planning systems, then expected those decisions to hold for a decade or more. Supply chains were optimised once, with limited appetite for revisiting assumptions unless something went seriously wrong.

Today, that approach is no longer viable.

Australian manufacturing supply chains are now expected to be:

• Continuously reviewed
• Highly responsive to demand and supply volatility
• Flexible enough to adapt to geopolitical, economic, and regulatory change

Network structures, sourcing strategies, inventory policies, and production footprints are increasingly viewed as living systems, not fixed assets. This shift is driving more frequent strategic reviews and a stronger connection between supply chain decisions and enterprise-level strategy.

Resilience has overtaken pure cost optimisation

Perhaps the most visible change in Australian manufacturing supply chains is the reprioritisation of resilience. While cost remains critical, manufacturers have learned often painfully, that the cheapest supply chain is not necessarily the most competitive. Extended disruptions have exposed the true cost of brittle, overly lean supply chains that lack redundancy, visibility, and flexibility.

As a result, many Australian manufacturers are now actively reassessing:

• Single-source dependencies
• Offshore manufacturing concentration
• Supplier financial health and operational risk
• Safety stock and decoupling strategies
• Lead time exposure and variability

Resilience is no longer treated as insurance; it is increasingly viewed as a source of competitive advantage. Manufacturers that can continue to supply customers during disruption win trust, market share, and pricing power. This does not mean returning to inefficient stockpiling. Instead, it means smarter resilience, underpinned by data, scenario modelling, and segmented service strategies.

Supply chain is now a board-level topic

Another defining change in Australian manufacturing is the elevation of supply chain to the executive and board agenda.

Supply chain performance now directly impacts:

• Revenue continuity
• Working capital
• Customer satisfaction
• ESG commitments
• Corporate risk exposure

As a result, boards and executive teams are asking more sophisticated questions about supply chain capability, maturity, and investment priorities.

This shift has led to:

• Greater scrutiny of supply chain KPIs beyond cost
• Increased demand for transparency and visibility
• Stronger alignment between operations, finance, and strategy
• More structured governance of supply chain decisions

Manufacturing supply chains are no longer something leaders only discuss when there is a problem. They are becoming a core pillar of enterprise performance management.

Demand volatility is forcing planning model redesign

Demand patterns for Australian manufacturers have become more volatile, less predictable, and more fragmented.

Contributing factors include:

• Shorter customer order cycles
• Greater product customisation
• Channel proliferation
• Faster shifts in end-consumer behaviour
• Increased promotional and pricing activity

Traditional forecasting approaches often heavily reliant on historical averages, are struggling to cope with this reality. In response, manufacturers are rethinking how they plan demand and supply.

Key changes include:

• Moving from forecast accuracy to forecast usability
• Greater emphasis on scenario planning
• More frequent re-planning cycles
• Improved collaboration between sales, operations, and finance

Sales and Operations Planning (S&OP), and its evolution into Integrated Business Planning (IBP), is becoming a critical capability rather than a compliance exercise.

Inventory is being reframed as a strategic asset

Inventory management has long been a tension point for Australian manufacturers. Too much inventory ties up capital and increases risk. Too little inventory threatens service, production continuity, and customer relationships. What has changed is how inventory is being discussed and governed.

Rather than applying blanket inventory targets across the business, leading manufacturers are now:

• Segmenting inventory by customer, product, and risk profile
• Explicitly linking inventory levels to service promises
• Balancing working capital objectives with resilience requirements
• Using inventory as a buffer where it delivers the most value

This more nuanced approach requires better data, stronger planning discipline, and closer alignment between finance and operations. Inventory is no longer simply a cost to be minimised, it is a lever to be deliberately deployed.

Manufacturing footprints are being reassessed

Australian manufacturers are also revisiting where and how production occurs.

While reshoring and nearshoring are often discussed, the reality is more complex. For most organisations, the question is not whether to abandon offshore manufacturing, but how to build a balanced, risk-aware manufacturing footprint.

This includes:

• Evaluating dual-sourcing or multi-site production strategies
• Assessing local manufacturing for critical or high-risk products
• Reviewing capacity flexibility and changeover capability
• Understanding the total landed cost rather than unit cost alone

Manufacturing footprint decisions are increasingly being made in conjunction with supply chain, rather than in isolation.

Digital enablement is accelerating, but unevenly

Technology investment in Australian manufacturing supply chains is accelerating, but adoption remains uneven.

Many organisations have invested heavily in ERP platforms, planning systems, and reporting tools, yet still struggle with:

• Poor data quality
• Limited system integration
• Over-complex planning processes
• Low user adoption

At the same time, newer approaches including advanced analytics, automation, and low-code solutions are enabling faster, more targeted improvements without wholesale system replacement.

The key shift is not simply adopting more technology, but:

• Designing processes first
• Selecting fit-for-purpose tools
• Ensuring usability for frontline and planning teams
• Embedding governance and change management

Digital enablement is increasingly viewed as an ongoing capability rather than a one-off project.

Workforce constraints are reshaping operations

Labour availability and skills shortages are having a profound impact on Australian manufacturing supply chains.

Challenges include:

• Difficulty recruiting skilled operators and planners
• Increased reliance on casual or contingent labour
• Rising wage costs
• Greater safety and fatigue management requirements

In response, manufacturers are:

• Redesigning workforce models and shift patterns
• Investing in workforce planning and scheduling capability
• Automating manual and repetitive tasks
• Improving visibility of labour demand and capacity

Workforce considerations are now deeply intertwined with supply chain design, planning, and execution decisions.

Sustainability expectations are becoming operational

Sustainability is no longer confined to reporting or corporate messaging. For Australian manufacturers, it is increasingly shaping day-to-day supply chain decisions.

This includes:

• Reducing transport emissions
• Improving energy efficiency in manufacturing and warehousing
• Minimising waste and obsolescence
• Improving supplier transparency and compliance

Rather than treating sustainability as a standalone initiative, leading organisations are embedding it into supply chain strategy, procurement decisions, and performance metrics.

The challenge lies in balancing sustainability goals with cost, service, and resilience — particularly in an inflationary environment.

How Trace Consultants can help Australian manufacturers

As manufacturing supply chains become more complex and strategically important, many organisations are recognising the value of independent, specialist support. Trace Consultants works with Australian manufacturers to help them navigate this changing landscape with clarity and confidence.

Support typically includes:

Supply chain strategy and operating model design

Helping organisations align their supply chain design with business strategy, customer expectations, and risk appetite, ensuring supply chain decisions support long-term objectives.

Network and Manufacturing Footprint Reviews

Providing objective analysis of warehouse, transport, and manufacturing networks to identify opportunities to improve cost, resilience, and service performance.

Planning capability and S&OP / IBP design

Supporting the design and implementation of pragmatic planning frameworks that improve decision-making without unnecessary complexity.

Inventory and working capital optimisation

Helping organisations strike the right balance between inventory investment, service levels, and resilience, using data-driven segmentation and policy design.

Technology and digital enablement

Assisting manufacturers to select, design, and deploy fit-for-purpose digital solutions that improve visibility, automation, and planning effectiveness.

Workforce planning and operational efficiency

Supporting workforce modelling, rostering, and productivity improvement initiatives to address labour constraints and rising costs.

Trace Consultants brings a practical, implementation-focused approach grounded in real-world manufacturing and supply chain experience, helping organisations move beyond theory to tangible outcomes.

What manufacturing leaders should focus on now

Australian manufacturing supply chains are unlikely to become simpler in the years ahead. Uncertainty, volatility, and competitive pressure will remain defining features of the operating environment.

Leaders should focus on:

• Building adaptable supply chain strategies
• Investing in planning and decision-making capability
• Treating resilience as a strategic asset
• Aligning supply chain, finance, and operations
• Taking a pragmatic, staged approach to digital enablement

The manufacturers that succeed will be those that treat supply chain not as a cost centre, but as a source of competitive advantage.

Final thoughts

The transformation of manufacturing supply chains in Australia is well underway. While the challenges are significant, so too are the opportunities for organisations willing to rethink long-held assumptions and invest in capability where it matters most.

In an environment where disruption is the norm rather than the exception, the ability to sense, respond, and adapt through the supply chain will increasingly define manufacturing success. The question is no longer whether Australian manufacturing supply chains need to change, but how quickly and how deliberately organisations choose to act.

Is your supply chain keeping pace with the reality of Australian manufacturing?

If resilience, planning confidence, or working capital still feel like trade-offs rather than deliberate choices, it may be time to take a step back and reset the foundations. At Trace Consultants, we work with manufacturers to redesign supply chains for today’s conditions. More adaptable networks. Stronger planning capability. Clear decisions that balance cost, service, resilience, and sustainability.

Get in touch with Trace to explore how your supply chain can move from reactive to resilient, and become a genuine source of competitive advantage.

How to Improve Reverse Logistics in Online Retail

Online retail has transformed customer expectations across Australia and New Zealand. Fast delivery, flexible fulfilment options, and frictionless returns are no longer differentiators — they are baseline expectations.

While most retailers have invested heavily in forward logistics capabilities such as fulfilment centres, last-mile delivery, and order management systems, reverse logistics has often lagged behind. Returns are frequently treated as an unavoidable cost of doing business rather than a supply chain capability that can be actively designed, optimised, and improved.

As return volumes grow, particularly in categories such as apparel, consumer electronics, homewares, and health products, reverse logistics has become one of the largest hidden cost drivers in online retail. It impacts warehousing efficiency, inventory accuracy, transport spend, labour productivity, sustainability outcomes, and — critically — customer experience.

This article explores how online retailers can improve reverse logistics performance, reduce cost-to-serve, and design returns processes that support both commercial outcomes and customer loyalty.

Why reverse logistics matters more than ever in online retail

Return rates in online retail are materially higher than in physical stores. Customers buy multiple sizes, colours, or variants with the intention of returning items that do not meet expectations. Generous returns policies are often necessary to compete, but they come at a cost.

Poorly designed reverse logistics leads to:

• High manual handling and rework
• Congestion in warehouses not designed for returns
• Inventory sitting in limbo and unavailable for sale
• Increased transport and handling costs
• Write-offs due to slow processing or damage
• Poor visibility of return reasons and root causes

At the same time, returns play a major role in shaping customer perception. A slow, confusing, or inflexible returns experience can undermine an otherwise strong brand and fulfilment proposition.

Improving reverse logistics is therefore not just a supply chain issue — it is a commercial, operational, and customer experience priority.

Understanding reverse logistics beyond “returns”

Reverse logistics is often used interchangeably with “returns,” but in practice it is broader and more complex.

Reverse logistics can include:

• Customer returns
• Exchanges
• Repairs and refurbishments
• Warranty claims
• Recalls
• End-of-life or recycling flows
• Unsold inventory moving back through the network

Each of these flows has different handling requirements, cost profiles, and decision points. Treating all returned products the same way is one of the most common and costly mistakes retailers make.

The true cost of poor reverse logistics

Many retailers underestimate the total cost of reverse logistics because it is spread across multiple functions.

Costs typically sit in:

• Transport (returns freight, consolidation, cross-dock movements)
• Warehousing (handling, storage, congestion, space utilisation)
• Labour (manual inspection, sorting, repacking)
• Inventory (markdowns, write-offs, obsolescence)
• Customer service (queries, disputes, refunds)
• Technology (workarounds, manual processing)

When these costs are not visible end-to-end, decision-making becomes reactive and fragmented.

Retailers that take a structured approach to reverse logistics often find that returns erode margin far more than initially assumed, particularly when return volumes spike during peak trading periods.

Common challenges in online retail reverse logistics

Across Australia and New Zealand, several challenges appear consistently in online retail environments.

Returns designed around policy, not operations

Returns policies are often created by commercial or marketing teams without fully considering operational implications. This can result in:

• Unpredictable return volumes
• Inconsistent handling rules
• Manual decision-making on the warehouse floor

Warehouses not designed for returns

Many fulfilment centres are optimised for outbound flow, not inbound inspection and sorting. This leads to:

• Congestion at receiving docks
• Inefficient layouts
• Disruption to forward picking operations

Poor inventory visibility

Returned stock often sits in quarantine or limbo locations with limited system visibility, delaying resale and increasing markdown risk.

One-size-fits-all handling

High-value, low-value, resellable, damaged, and unsellable items are frequently processed through the same workflow, driving unnecessary cost.

Limited insight into return drivers

Without structured data on why items are returned, retailers struggle to address root causes such as product quality issues, inaccurate descriptions, or sizing problems.

Designing a better reverse logistics strategy

Improving reverse logistics starts with treating it as a designed capability, not an afterthought.

Segment reverse flows by value and outcome

Not all returns deserve the same treatment. Retailers should segment returns based on factors such as:

• Product value
• Condition on return
• Speed-to-resale requirement
• Likelihood of refurbishment or repair
• Sustainability considerations

This enables differentiated handling paths rather than a single, inefficient process.

Decide where returns should flow

Returns do not always need to return to the original fulfilment centre.

Options may include:

• Dedicated returns processing facilities
• Store-based consolidation
• Third-party returns hubs
• Direct-to-supplier or refurbisher flows

Network design plays a major role in reverse logistics cost and responsiveness.

Warehouse and fulfilment considerations for returns

Reverse logistics places very different demands on warehouse operations compared to outbound fulfilment.

Key considerations include:

• Dedicated space for returns receiving and inspection
• Clear segregation between sellable and non-sellable stock
• Fast-track paths for items suitable for immediate resale
• Ergonomic workstations for inspection and repacking
• Labour models that can flex with return volume variability

Retailers that explicitly design returns into warehouse layouts typically achieve faster cycle times and lower handling costs.

Inventory management and speed to resale

One of the biggest opportunities in reverse logistics is reducing the time between return and resale.

Delays lead to:

• Missed sales opportunities
• Increased markdowns
• Higher obsolescence risk

Improvement levers include:

• Clear decision rules for resale vs write-off
• Immediate system updates when condition is confirmed
• Priority processing for fast-moving SKUs
• Alignment between returns teams and inventory planners

When returns are processed quickly and accurately, they become a source of recovered value rather than margin erosion.

Using data to reduce returns at the source

Improving reverse logistics is not only about processing returns better — it is also about preventing avoidable returns.

Data from returns can be used to:

• Identify product quality issues
• Improve product descriptions and imagery
• Address sizing or specification inaccuracies
• Highlight packaging weaknesses
• Inform supplier performance discussions

Retailers that actively analyse return reasons often see improvements not just in logistics costs, but in customer satisfaction and conversion rates.

Sustainability and reverse logistics

Returns have a material environmental impact due to additional transport, packaging, and waste.

Improving reverse logistics can support sustainability objectives by:

• Reducing unnecessary transport movements
• Increasing resale and refurbishment rates
• Improving recycling and end-of-life pathways
• Minimising landfill through better sorting and recovery

For many organisations, reverse logistics is an increasingly important part of their broader sustainability narrative.

Technology and systems enablement

Technology plays a critical role in enabling efficient reverse logistics, but only when aligned to process and operating model design.

Key system considerations include:

• Clear visibility of returned inventory status
• Integration between customer service, warehouse, and finance systems
• Simple workflows for inspection and disposition decisions
• Data capture on return reasons and condition
• Reporting that supports continuous improvement

Technology should support faster decisions and clearer accountability, not add complexity.

Governance and ownership

One of the reasons reverse logistics underperforms is unclear ownership. Responsibilities are often split across:

• Ecommerce
• Customer service
• Warehousing
• Transport
• Finance

Improvement requires:

• Clear accountability for reverse logistics performance
• Defined KPIs covering cost, speed, recovery, and customer experience
• Regular review of return drivers and trends

Without governance, reverse logistics remains reactive and fragmented.

How Trace Consultants can help

Trace Consultants works with online retailers to design and improve reverse logistics capabilities that balance customer experience, cost-to-serve, and operational efficiency.

Our support commonly includes:

• Reviewing current reverse logistics processes and cost drivers
• Mapping end-to-end returns flows across transport, warehousing, and systems
• Designing segmented reverse logistics strategies
• Supporting warehouse layout and operating model changes
• Improving inventory visibility and speed to resale
• Developing performance metrics and governance frameworks
• Supporting technology and system alignment

Our approach is practical and grounded in how supply chains actually operate, helping retailers move beyond reactive returns handling to deliberate, data-driven reverse logistics design.

Turning reverse logistics into a competitive advantage

As online retail continues to grow across Australia and New Zealand, reverse logistics will only increase in scale and importance.

Retailers that treat returns as a necessary evil will continue to see margin leakage, operational disruption, and frustrated customers. Those that invest in structured reverse logistics design will be better positioned to:

• Control cost-to-serve
• Improve inventory recovery
• Support sustainability objectives
• Enhance customer trust and loyalty

Reverse logistics is no longer just about managing returns — it is about unlocking value from what comes back.

The question is not whether reverse logistics deserves attention, but whether it is being designed with the same rigour as the forward supply chain.

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Reducing COGS % and Improving Margin Through Range & Inventory Optimisation

Waste and SLOBs Reduction

Cost of Goods Sold (COGS) is often treated as something largely fixed—set by suppliers, market conditions and scale. Yet for many organisations across Australia and New Zealand, COGS % creeps up over time not because unit costs increase dramatically, but because inefficiencies accumulate quietly across the range and inventory portfolio.

New products are added. Old ones linger. Forecasts become less accurate. Inventory ages. Waste increases. Slow-moving and obsolete stock (SLOBs) grows. Markdowns become routine. Expediting costs rise. Eventually, margin erosion is accepted as inevitable.

In reality, a significant proportion of COGS pressure is self-inflicted.

Organisations that systematically optimise their product range and inventory policies can materially reduce COGS %, improve gross margin and release working capital—often without renegotiating a single supplier contract.

This article explores how range and inventory optimisation directly impacts COGS, why waste and SLOBs are persistent challenges, and how organisations can tackle them in a practical, sustainable way. It also outlines how Trace Consultants helps organisations drive measurable margin improvement through structured, data-led approaches.

Why COGS % Creeps Up Over Time

COGS rarely deteriorates overnight. It erodes gradually through a combination of small decisions that, individually, seem reasonable.

Range Expansion Without Discipline

New products are often introduced to:

• Respond to customer requests
• Match competitors
• Support promotions or growth initiatives

However, older products are rarely removed with the same rigour. Over time, ranges expand well beyond what demand can support efficiently.

The result:

• Lower volume per SKU
• Reduced forecast accuracy
• Smaller production or purchase runs
• Higher unit costs and logistics inefficiencies

Inventory Policies That Don’t Reflect Reality

Inventory parameters are often set once and rarely revisited. Safety stock, minimum order quantities and reorder points may no longer reflect:

• Actual demand variability
• True lead times
• Service priorities

This misalignment drives both excess stock and stock-outs—each of which increases COGS in different ways.

Poor Visibility of Waste and SLOBs

Waste and SLOBs are frequently treated as:

• “One-off write-offs”
• “The cost of doing business”

Without clear ownership and ongoing monitoring, these losses repeat year after year.

Forecast Bias and Optimism

Forecasts often reflect what the business hopes to sell, rather than what demand signals support. This optimism flows directly into excess inventory, markdowns and obsolescence.

How Range Complexity Drives COGS Up

Range complexity is one of the most powerful—and underestimated—drivers of COGS %.

The Hidden Cost of Too Much Choice

Each additional SKU introduces:

• Forecasting effort
• Inventory holding cost
• Planning variability
• Procurement and logistics overhead
• Risk of obsolescence

Even if a SKU is profitable on paper, it may still dilute overall margin by consuming capacity and attention.

Long-Tail SKUs and Margin Dilution

In many organisations, a small proportion of SKUs drive the majority of volume and margin. The long tail often:

• Sells infrequently
• Requires higher safety stock relative to demand
• Contributes disproportionately to waste and SLOBs

Without active range management, these SKUs quietly erode performance.

Range Decisions Are Often Decoupled from Supply Chain Reality

Product decisions are sometimes made without full consideration of:

• Minimum order quantities
• Shelf life or expiry risk
• Storage and handling complexity
• Transport and packaging inefficiencies

When these costs are not visible at decision time, they show up later in COGS.

Inventory Optimisation as a Margin Lever

Inventory is not just a balance sheet item. It is a direct driver of COGS through waste, write-downs, handling cost and inefficiency.

Excess Inventory Increases More Than Holding Cost

Holding cost is only part of the story. Excess inventory also increases:

• Damage risk
• Expiry and obsolescence
• Picking inefficiency
• Space constraints and overflow handling
• Discounting and markdown activity

All of these inflate COGS or reduce realised margin.

Stock-Outs Also Increase COGS

While counterintuitive, stock-outs can increase COGS by:

• Driving expediting and premium freight
• Forcing suboptimal substitution
• Increasing small-batch purchases
• Reducing production efficiency

Optimisation is about balance, not just reduction.

Waste: The Most Visible Symptom of Poor Alignment

Waste is one of the clearest indicators that demand, supply and inventory decisions are misaligned.

Common Drivers of Waste

Across industries, waste often stems from:

• Over-forecasting
• Poor promotion planning
• Inflexible minimum order quantities
• Long lead times combined with volatile demand
• Range changes not reflected in inventory run-down plans

Waste is rarely caused by one bad decision. It is the cumulative effect of many small misalignments.

Why Waste Is So Hard to Eliminate

Waste persists because:

• Accountability is diffuse
• It is often discovered too late
• Root causes are not systematically addressed

Without structural changes, waste reductions achieved one year often reappear the next.

SLOBs: The Silent Margin Killer

Slow-moving and obsolete stock is one of the most stubborn problems in supply chains.

What Creates SLOBs

SLOBs typically arise from:

• Range rationalisation delays
• Product lifecycle mismanagement
• Forecast bias
• Supplier constraints
• Lack of clear exit strategies for underperforming items

Once inventory becomes slow-moving, options narrow quickly.

The True Cost of SLOBs

Beyond write-offs, SLOBs:

• Occupy valuable warehouse space
• Complicate picking and replenishment
• Mask true demand signals
• Consume management attention

Left unchecked, they distort planning decisions and perpetuate poor outcomes.

Connecting Range, Inventory and COGS %

COGS improvement requires seeing the system as a whole.

Range decisions affect:

• Demand predictability
• Purchase economics
• Inventory requirements

Inventory policies affect:

• Waste and obsolescence
• Service levels
• Expediting and handling cost

Together, they determine:

• Gross margin
• Cash tied up in stock
• Operational efficiency

Treating these levers separately limits results. The biggest gains come from addressing them together.

Practical Approaches to Range Optimisation

Effective range optimisation is not about cutting aggressively. It is about making deliberate, evidence-based choices.

Segmenting the Range

Segmenting SKUs by:

• Volume contribution
• Margin contribution
• Demand variability
• Strategic importance

allows organisations to apply differentiated strategies rather than blanket rules.

Identifying Candidates for Rationalisation

Common indicators include:

• Persistent low volume
• High forecast error
• Disproportionate waste or markdowns
• Duplication or close substitutes

Importantly, decisions should consider total cost-to-serve, not just sales.

Managing Range Change Properly

Rationalisation without inventory exit planning simply creates SLOBs faster.

Effective programs include:

• Clear sell-down strategies
• Adjusted replenishment rules
• Supplier engagement
• Defined end-of-life processes

Inventory Optimisation Levers That Reduce COGS

Recalibrating Safety Stock

Safety stock should reflect:

• Actual demand variability
• True lead time performance
• Service priorities by SKU or segment

Many organisations carry excess safety stock because parameters were never revisited.

Improving Forecast Quality Where It Matters

Not all SKUs require the same forecast effort.

Focusing improvement on:

• High-value items
• High-risk items
• Items with high waste exposure

delivers far greater returns than chasing marginal gains everywhere.

Aligning Inventory Targets to Service Strategy

Different products justify different service levels.

Explicitly linking service targets to inventory investment:

• Improves margin transparency
• Prevents over-investment in low-impact areas

Governance: Where Most Initiatives Succeed or Fail

Many range and inventory initiatives start strongly and then fade.

Clear Ownership Is Critical

Successful programs clearly define:

• Who owns range decisions
• Who owns inventory targets
• Who is accountable for waste and SLOBs

Shared ownership often results in no ownership.

Embedding Ongoing Review Cadence

Range and inventory optimisation is not a one-off project.

Effective organisations embed:

• Regular range reviews
• Ongoing SLOB monitoring
• Periodic inventory parameter recalibration

This prevents issues from re-accumulating.

The Role of Data and Technology (Without Over-Engineering)

Advanced tools can help, but they are not a prerequisite for success.

What Matters Most

The biggest gains usually come from:

• Better use of existing data
• Clear metrics and definitions
• Consistent decision-making

Technology should support decisions, not complicate them.

Avoiding the “Tool First” Trap

Investing in sophisticated optimisation software without fixing:

• Data quality
• Governance
• Decision rights

often leads to underwhelming results.

How Trace Consultants Can Help

Trace Consultants works with organisations across Australia and New Zealand to reduce COGS %, improve margin and release cash through practical range and inventory optimisation.

Our approach focuses on sustainable improvement, not short-term fixes.

Diagnosing the True Drivers of Margin Leakage

We help organisations understand:

• Where COGS is really being lost
• How range complexity, waste and SLOBs interact
• Which levers will deliver the greatest impact

This creates a clear, prioritised improvement roadmap.

Range Optimisation and Rationalisation

Trace Consultants supports:

• SKU segmentation and performance analysis
• Identification of rationalisation opportunities
• Development of structured exit and transition plans
• Governance frameworks to prevent re-expansion

All decisions are grounded in data and operational reality.

Inventory Policy and Parameter Optimisation

We help recalibrate:

• Safety stock and reorder policies
• Service level targets by segment
• Inventory deployment across networks

The focus is on reducing excess without increasing risk.

Waste and SLOB Reduction Programs

Trace Consultants helps design and implement:

• Waste tracking and root cause analysis
• SLOB identification and disposition strategies
• Preventative controls to stop recurrence

This turns waste reduction into an ongoing discipline.

Embedding Capability and Governance

Sustainable results require capability uplift. We support:

• Role clarity and decision rights
• KPI design and performance management
• Review cadences and operating rhythms

This ensures improvements hold beyond the initial program.

Final Thoughts

Reducing COGS % and improving margin is rarely about one big initiative. It is about addressing the cumulative impact of range complexity, excess inventory, waste and SLOBs.

For organisations across Australia and New Zealand, the opportunity is significant:

• Margin improvement without supplier renegotiation
• Cash release without service degradation
• Simpler, more resilient operations

The key is treating range and inventory optimisation as core commercial disciplines—not just supply chain housekeeping.

When organisations align product decisions, inventory policies and governance around a shared understanding of value and risk, COGS % comes down, margin improves and performance becomes far more predictable.

If COGS pressure feels persistent despite strong sales or procurement efforts, the answer may lie not in buying cheaper—but in carrying, managing and ranging smarter.

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