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 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 your Customers are losing you money. Volume wont help. #2
  • Volume increases losses2 When your margins on a customer are negative increasing volume increases losses
  • Volume increases losses2 Only by knowing Cost to Serve can you make up for losses
  • Operating profits can 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 happens when 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 shows you what Labor Standards CANT #4
  • What Labor Standards Dont Tell4 Labor standards say you are productive. If you still lose money you probably had a hard product mix.
  • What Labor Standards Dont Tell4 Your workers are productive but you just failed to make budget
  • What Labor Standards Dont Tell4 Difficult product mix will not be shown in your Labor Management System. Cost to Serve knows what LMS doesnt.
  • Your highest margin customers are not always profitable #5
  • Margin doesnt correlate5 And your lowest margin customers arent always your least profitable
  • Margin doesnt correlate5 A losing customer might look like:
  • Margin doesnt correlate5 Value add services
  • Margin doesnt correlate5 Complicated Packaging Requirement
  • Margin doesnt correlate5 Picking lots of small orders
  • Knowing your Cost to Serve in your warehouse is easier than you think
  • You can have it Daily always at your fingertips
  • New data correlation Technology makes it affordable, fast, and...
  • Easy to Implement find out more at