Cost to Deliver
Post-Manufacturing Activity Costs

Post-Manufacturing costs like repacking and relabeling are often performed in the distribution center instead of the plants because there is a belief that it provides flexibility and cost efficiencies. This belief is often difficult or impossible to validate because the cost of these activities in the distribution center (DC) are generically spread across all products removing visibility to how each product drives these costs. Plant controllers move the cost off their P&Ls claiming the DC is more cost effective without having to prove it.

Customers drive “post-manufacturing” costs of their own through the special packaging and shipping requirements they demand to ensure products flow smoothly in their supply chain. Unfortunately, the only cost side of these requirements that is well understood are the penalties for not meeting them. As with other post-manufacturing costs, customer-specific packaging and shipping costs are spread generically across all products making it impossible to assess these costs by customer to ensure costs are included in the price charged.

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  • Manage distribution center handling costs: Calculate SKU-level packing and labeling costs at the distribution center to understand profit impacts.
  • Determine costs of customer-specific requirements: Ensure customer service level agreements (SLAs) accurately reflect the costs of activities required by the customer.
  • Manage co-packer relationships: Gain visibility into the costs of contract packing vendors and their impact on overall profits.
  • Evaluate inventory costs: Understand the costs of increased inventory needed to accommodate customers’ special processing requirements.
  • Calculate costs by packing configuration: Optimize cost of packing configurations for product and customer requirements.

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

Harvard Business Review: 7 Lessons on Dynamic Pricing (Courtesy of Bruce Springsteen)

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FP&A Trends: Automation in FP&A: If You Want to Go Far, Go Together

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CFO Magazine: 80% of CFOs Expect Cost Pressures to Persist Into Next Year: Weekly Stat

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CFO Dive: Nearly Half of CFOs Ditching Just-in-Time Supply Chains: Study

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CFO Magazine: A CFO’s Guide to Business Transformation

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Harvard Business Review: 3 Stages of a Successful Digital Transformation

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