‘Cost-to-serve’ analysis modelling

Assignment

Develop a cost to serve analytics model to reflect the total landed costs in the supply chain including order handling, order management, distribution, fulfilment, packaging, inbound, sourcing and planning, using big data.

Project summary

BCI developed a conceptual model to map the landed cost for various product types, geographies and sales channels, helped to align costs and service levels, provided an analytical model which could be reused, and visualized the results in a dashboard.

Our approach

• Build a cost model to calculate the cost to serve per product type – geography and sales channel – customer segment using big data and supply chain visualization techniques
• Validate the landed cost model and supply chain dashboard with the Supply Chain team, Operations, Finance department and the Commercial business units
• Apply supply chain segmentation to segment the client base into customer segments (gold, silver, bronze)
• Develop a logistics menu of offerings per segment, including minimum order quantities, product assortment, rush orders, service levels, order cut off times
• Hand over the re-usable model to the client

Result

Balanced supply chain costs with an aligned service offering per product – geography – segment. Re-usable supply chain analytics model with supply chain visualization and dashboards.