Cost To Serve in Your Warehouse: 5 Things You Should Know
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If you jump through hoops for your customers, the conversations might sound like this: "Sure, we can put a rush on that" "Yes we can do value-added services" "Did you get the free inventory our sales team sent?" How do you know these are profitable customers? Get control of your warehouse labor costs by knowing Cost to Serve. Big Data has made it easier than ever to capture 100% of your labor spend. You'll finally be able to make management decisions based on current and constantly updated information. Cost to serve tells you: -Which customers are making / losing you money -Which products are making / losing you money -Which processes are making / losing you money -Which service costs are killing you, and which aren’t Learn the 5 essential things about Cost To Serve and how it will transform your warehouse workforce.
Transcript of Cost To Serve in Your Warehouse: 5 Things You Should Know
COST TO SERVE IN YOUR WAREHOUSE
5 THINGS YOU SHOULD KNOW ABOUT
Cost To Serve shows you
where every dollar in your workforce
is spent
#1
Total Visibility on Profit & Loss
Which Customers Products
Processes Employees
1
Total Visibility on Profit & Loss
Which Customers Products
Processes Employees
1
are making/losing you money
20% of yourCustomers
are losing you money.Volume won’t help.
#2
Volume increases losses2
When your marginson a customer are negativeincreasing volumeincreases losses
Volume increases losses2
Only by knowingCost to Serve
can you make up for losses
Operating profitscan go up by 50%
when you fire your worst customers
#3
Profits up 50%3
The blue bars are your profitability by customer
Profits up 50%3
The yellow line is your actual profit
Profits up 50%3
The orange line is your cummulative profit
Profits up 50%3
What happenswhen you fire your least profitable customers?
Profits up 50%3
Profits up 50%3
Now your profitability is up here
Profits up 50%3
When you reduce workload you gain time to
find new customers or focus on your best customers
Cost to Serve showsyou what
Labor Standards CAN’T
#4
What Labor Standards Don’t Tell4
Labor standardssay you are productive.
If you still lose money you probably had a hard product mix.
What Labor Standards Don’t Tell4
Your workers are productive
but you just failed to make budget
What Labor Standards Don’t Tell4
Difficult product mix will notbe shown in your
Labor Management System. Cost to Serve knows
what LMS doesn’t.
Your highest margincustomers are
not always profitable
#5
Margin doesn’t correlate5
And your lowest margincustomers aren’t always your least
profitable
Margin doesn’t correlate5
A losing customermight look like:
Margin doesn’t correlate5
Value add services
Margin doesn’t correlate5
ComplicatedPackaging
Requirement
Margin doesn’t correlate5
Picking lots of
small orders
Knowing your Cost to Serve
in your warehouseis easier
than you think
You can have it Daily
always at yourfingertips
New data correlation Technology
makes it affordable,fast, and...
Easy to Implement
find out moreat EasyMetrics.com
