Cost to Deliver
Outbound + Reverse Logistics Costs
The cost of logistics or the last mile of your supply chain are often managed as a total percent of sales with a goal of maintaining a predetermined average percentage. Managing it this way leads companies to implement generic cost cutting measures when the goal is exceeded – leading to reduced service levels, generic recovery fees, and, ultimately, unhappy customers. Avoiding this situation requires new thinking and the first step towards this is developing a detailed understanding of how each customer and product uniquely drives your logistics’ cost.
Through this type of lens, companies identify the customer-specific behaviors, poorly negotiated service level agreements, and hidden product requirements that are driving last mile supply chain costs – and can take specific actions to address them. This avoids the risk of generic service curtailments and focuses efforts on controlling the specific business activity driving the cost of logistics.
Understand the costs of getting products to (and back from) customers with ImpactECS
- Determine cost of distribution center activities: Gain visibility into the costs of receiving, handling, picking, packing, and other distribution center activities based on unique product or customer requirements.
- Evaluate labor and automation costs: Leverage fully loaded logistics activity cost information to inform warehouse automation strategies in order to ensure projected savings from automation are achievable.
- Integrate data across systems: Connect information from ERP and warehouse management systems to create a complete picture of how customer specific order profiles and patterns translate into work and resource requirements in the distribution center. Leverage insights to audit and validate 3PL invoices.
- Measure reverse logistics costs: Identify the true cost of handling returns and align with customer behavior to inform customer service level agreements and terms.
- Optimize 3rd Party Logistics (3PL) activities: Leverage cost insights to shift 3PL providers to activity-based contracts in order to regain control over the drivers of logistics’ cost.
- Order consolidation through tiered pricing: Use transaction level cost insights to inform tiered product level pricing that optimizes order quantities and frequency based on product level picking and packing costs.
Post-Production and Cost-to-Serve Analytics
With 93% of companies working on ways to get better cost data, you’re likely trying to identify better methods to explore and analyze cost results. Learn how companies leverage data from ERP and other systems to connect product costs and post-production costs to provide visibility into overall profit performance.
Hear examples highlighting the importance of accurately calculating and allocating costs at each post-production stage to unlock true profitability analytics, best practices for identifying drivers, building rates, and allocating overhead costs for post-production and cost-to-serve processes, and insights and advices on how finance teams can establish a robust analytics program to evaluate performance at any business dimension.
Resources
Get Quick Insights and Best Practices
Visit the Video Library >Is Your Product Costing Process Healthy?
Get your Score >Creating a Cost-Focused Culture
Watch the Webinar >Guide to Implementing Cost Systems
Watch the 30-min Q+A >Cost Allocations: Gaining Actionable Insights
Read the Article >Ready to see ImpactECS in action?
Get a glimpse of how we help companiesunderstand their costs and profits