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

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