Did you know that getting your products to your clients can consume up to 15% of your total unit costs? Read here how Santa Claus (and our slightly lower profile clients) use CostPerform to take control of their Cost-to-Serve expenses.
A large unknown
Manufacturing companies such as Santa’s factory at the North Pole typically have a good handle on their manufacturing costs. However, these companies can lose that insight as soon as their product leaves the factory. Cost-to-Serve includes costs for transportation, handling, warehousing, and distribution. These costs differ by:
- Product (storage time can differ significantly by product)
- Customer (order behavior differs by customer)
- Distribution channel (online, own stores, intermediates)
Cost-to-Serve is typically a large unknown, whether these logistics activities are outsourced or performed in-house. Furthermore, customer behavior and expectations have changed dramatically in the past years: ordering online and expecting to get your goods the next day, or even the same day, is the de-facto standard. However, there is a cost associated with expectation changes. This trend has had major impacts on the cost-to-serve amounts, which can add up to 10-15% of the total unit cost.
Our Cost-to-Serve model returns accurate insights into the costs, the profitability of products, and customer/distribution channels
Tailored to your situation
In cooperation with our logistics specialist partner Scala from England, we developed a Cost-to-Serve template in CostPerform. CostPerform’s Cost-to-Serve framework has been applied to various manufacturing companies in both food and non-food and can be tailored with minimal effort to your organization’s situation.
Future scenarios
Our Cost-to-Serve model returns accurate insights into the costs, the profitability of products, and customer/distribution channels. These models are updated monthly and generate actionable results to optimize the company’s performance. The built-in dashboard in CostPerform allows users to incorporate different future scenarios and as such gives the ability to select the strategy optimized to achieve the company’s mission.
And this is how you can use CostPerform to take control of your Cost-to-Serve expenses, and how Santa Claus makes sure you get your presents at an acceptable price…
Download our brochure below if you want to know more about CostPerform.
