Why efficiency leaks are growing — and how smart supply chains close them

Indian supply chains have evolved rapidly in the last decade.
Faster deliveries, better warehousing, organised transport networks, and improved technology adoption have reshaped the landscape.

Yet, even today, most companies lose money not because of big failures — but because of small, silent inefficiencies embedded in daily operations.

These aren’t always visible.
They often don’t appear in dashboards.
But they quietly increase logistics cost, reduce productivity, and slow down service levels.

These are the hidden cost traps in Indian supply chains.

Let’s explore the biggest ones and how businesses can start fixing them.

1. Poor Packaging Design That Reduces Transport Utilisation

One-size-fits-all packaging is still common, especially in industrial and automotive supply chains.

The impact is bigger than it appears:

• unused space inside boxes
• low pallet or FLC utilisation
• fewer units per truck
• higher per-trip cost
• increased damage rates

When packaging is not engineered, transportation becomes expensive and unpredictable.

Fix:
Move to dimension-optimised, engineering-led packaging that improves stacking, handling, and container utilisation.

2. Manual and Fragmented Order Flow

Many companies still rely on WhatsApp messages, emails, calls, and spreadsheets to manage:

• order requests
• dispatch planning
• routing
• warehouse instructions
• approvals

When teams work in silos, mistakes multiply and decisions slow down.

Fix:
Adopt simple workflow systems or structured processes that consolidate information and improve visibility across teams.

3. Inefficient Warehouse Layouts and Storage Patterns

Warehouses often operate with:

• mismatched pallet or packaging sizes
• poor aisle planning
• inconsistent racking usage
• manual put-away logic
• under-utilised vertical height

Even with large warehouses, space becomes a bottleneck.

Fix:
Reorganise with standardised packaging, racking alignment, defined zones, and MHE-friendly layouts.

4. High Dependence on Single-Use Packaging

Cartons, wooden crates, bubble wrap, and tapes increase:

• recurring packaging cost
• space usage
• product damage
• waste disposal
• inconsistent stacking behavior

This especially hurts high-volume supply chains.

Fix:
Shift to returnable packaging that reduces waste, improves stacking strength, and lowers long-term cost.

5. Poor Reverse Logistics & Empty Return Loads

Return trucks without planned reverse loads increase transportation cost significantly.
This is common when companies do not map:

• customer return cycles
• vendor pickup timing
• multi-drop or milk-run opportunities

Every empty km traveled is pure cost.

Fix:
Plan reverse logistics flows during route creation, not after dispatch.

6. No Standardisation of Handling Practices

Lifting heavy cargo manually, ad-hoc palletisation, unclear stacking rules — all of these increase:

• damage
• labour cost
• cycle time
• safety risks

Across warehouses and plants, lack of standard handling practice is a major efficiency drain.

Fix:
Create standard operating procedures for stacking, palletisation, loading, and movement for every SKU or category.

7. Excess Inventory as a Safety Blanket

Many Indian supply chains over-stock because they lack real forecasting visibility.
This leads to:

• higher warehouse cost
• working capital blockage
• material expiry
• loss of shelf life
• reduced responsiveness

Inventory hides inefficiency instead of solving it.

Fix:
Build forecasting discipline, improve demand planning accuracy, and integrate suppliers into planning cycles.

8. Delayed Communication and Slow Decision Cycles

Simple approvals like:

• dispatch instruction
• transporter allocation
• packing change requests
• stock release
• QC clearance

often take hours or days because teams operate reactively.

Fix:
Set up decision thresholds, automated notifications, and aligned communication formats.

9. Underutilised Material Handling Equipment

Forklifts, stackers, trolleys, and conveyors remain idle in several warehouses because packaging, layout, or processes do not support them.

The result:

• more manual work
• slower put-away
• higher labour dependency
• increased errors

Fix:
Design packaging, racking, and warehouse processes that work with MHE, not against it.

10. Lack of Continuous Improvement Culture

Many supply chains improve only when there is a crisis.

Without structured improvement practices, companies struggle with:

• recurring issues
• inconsistent service quality
• high variability
• firefighting mode operations

Fix:
Introduce basic improvement practices like daily reviews, root cause analysis, and monthly process audits.

How Paragon Helps Companies Fix These Cost Traps

Paragon focuses on the three pillars that drive supply chain performance:

People

Defined roles, training, SOPs, and clear communication.

Process

Documented workflows, lean practices, and data-driven planning.

Technology

Right-sized tools for tracking, monitoring, and reporting.

Combining these with packaging engineering, warehousing expertise, and transportation capability allows Paragon to deliver measurable improvements across the supply chain.

Final Thought: Small Fixes Create Big Impact

The biggest cost reductions rarely come from massive restructuring.
They come from fixing everyday inefficiencies:

• packaging that wastes space
• warehouses that slow down movement
• processes that rely on individual judgement
• transport that runs without optimisation

These are the hidden cost traps that quietly drain profitability.

When supply chains identify and improve these areas, they become faster, more reliable, and significantly more cost-efficient.

Want to uncover hidden inefficiencies in your supply chain?

Paragon’s consulting team can audit your operations and help build a roadmap for improvement.

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