What is the real cost to meet this customer’s needs?
How much will it cost to increase service levels from 90 percent to 95 percent?
The inability to answer questions like these means you are likely making uninformed business decisions and even unknowingly servicing unprofitable customers. How much time and resources are being wasted as a result?
Cost-to-serve is the analysis and quantification of all supply chain activities and costs incurred to fulfill a customer’s product demand. This is accomplished by modeling all the supply chain activities in the network, and properly allocating fixed and variable costs.
An accurate cost-to-serve model built with Supply Chain Guru enables informed decision making by answering questions such as:
- Is this customer or customer segment profitable, given the supply chain configuration and costs?
- Does it make good business sense to continue to stock and distribute this product?
- What is the right amount to charge to at least cover my costs?
Supply Chain Guru provides fixed cost structures for facilities, processes, process steps, labor, equipment and transportation assets. Supply Chain Guru models also account for variable costs throughout the entire supply chain.