Cost To Serve provides visibility of ALL costs in your definition of the supply chain at ship-to level.
It then aggregates costs by sales channel and account to generate a Cost To Serve for your customer.
Features of Cost To Serve
Cost to serve enables you to eliminate waste and cost by highlighting inefficient or costly practices, to simplify your customer offering and ensure it is cost-effective. You can also quickly move from CTS to Customer Account Profitability, enabling you to re-focus your supply chain on driving Gross Margin, not just supporting sales. Our clients have utilised information gained from our Cost To Serve product across 3 core areas:
A Robust Process
Visibility of all in-scope costs by customer ship-to and account every month. A flexible tool using core ERP data, with no systems integration is needed.
Resource Effectiveness
Data collection time typically 2-3 man-hours per month to start, falling to <1 hour after 6 months (subject to number of inputs).
CTS processing time typically <1 hour when data uploaded.
Adaptability
Data outputs formatted to enable charts and reports to be created using Microsoft Office tools for familiarity and flexibility, or configured for access via your existing report-writer (or can be provided).
How Our Customers Use This Information
Distribution & Cash Management
Reviews of channel delivery strategy, pallet sizes, case sizes and packaging style by channel
Infrastructure changes for delivery networks
Order to Cash process improvements identifying hidden costs for each customer such as returns or claims
Improve merchandising and order taking to establish the least efficient customers
Explore alternative ordering/ delivery methods for high cost customers
Supply Chain & Commercial
Provide sales managers with true costs and extend areas of key account negotiation
Evaluate the true cost and impact of promotions
Getting Factory Gate Pricing and Continuous Replenishment right first time
Assess impact ofRetailReadyPackaging (RRP) and merchandising options
Develop fullCustomer Account Profitability (CAP), including all sales support costs
