Harnessing Cost-to-Serve Optimisation

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?

The ultimate goal is to increase company profitability by making unprofitable customers profitable or helping profitable customers become even more profitable. Without accurate cost-to-serve data for current customers and products, this is a near-impossible task. An accurate cost-to-serve model 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?
  • With an accurate cost-to-serve and margin-to-serve model (when sale price data is incorporated), better business decisions can be made and financial supply chain optimization is possible.
Harnessing Cost-to-Serve Optimisation White Paper
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