Analysing Strategies to Reduce Supply Chain Costs in Response to Currency Devaluation

Aleke Jude Uchechukwu¹ and Echegu Darlington Arinze²

¹Faculty of Economics Kampala International University Uganda.

²The School of Mathematics and Computing, Kampala International University Uganda

Corresponding Author: jude.aleke@kiu.ac.ug

https://orcid.org/0009-0009-6807-9484

ABSTRACT

In the current era of globalisation, firms were confronted with the complex challenge of effectively overseeing supply chains in the face of the volatile nature of currency markets. Currency depreciation, a common obstacle in global commerce, had a substantial effect on procurement expenses, pricing tactics, and total profitability. Efficiently reducing supply chain expenses in reaction to currency depreciation was essential for preserving competitiveness and guaranteeing long-term viability. This study provided a thorough examination of techniques specifically designed to tackle this problem. Currency devaluation was the decline in the value of a country’s currency compared to others, caused by reasons such as economic instability or geopolitical conflicts. The recent occurrences, such as the devaluation of the Chinese yuan and the changes in the British pound after Brexit, highlight the widespread influence on supply chain expenses. To address these difficulties, organisations needed to implement comprehensive strategies to reduce costs in their supply chains. This study explored several ways to reduce supply chain costs in reaction to currency depreciation, drawing on ideas from industry professionals, academic research, and real-world case studies. The tactics include supplier diversity, contract renegotiation, hedging, value engineering, inventory management, logistics optimisation, technology adoption, cooperation, and constant monitoring. The importance of this subject goes beyond just saving money in the short term; it had wider ramifications for the ability of a corporation to withstand challenges, compete in the market, and make strategic decisions. Organisations may improve their ability to adapt, reduce potential dangers, and take advantage of favourable circumstances in the global market by comprehending currency dynamics and taking proactive actions.

Keywords: Currency devaluation, Supply chain costs, Procurement, Pricing strategies, Risk Management.

CITE AS: Aleke Jude Uchechukwu and Echegu Darlington Arinze (2024). Analysing Strategies to Reduce Supply Chain Costs in Response to Currency Devaluation. RESEARCH INVENTION JOURNAL OF CURRENT ISSUES IN ARTS AND MANAGEMENT 3(3):10-13