Total Supply Chain Management Costs metrics attempt
to segment cost centers into process based activity. Below are listed suggested level two and three metrics with brief definitions.
Order Management Cost
Customer Service Cost
Cost centers that have to do with entering customer
orders, reserving inventory, credit check, consolidating orders, processing inquiries and quotes.
Finished Goods Warehouse Cost
Cost centers that have to do with the storage, receiving,
picking, and shipment of finished good products.
Outbound Transportation Cost
Cost centers that have to with the transportation
(all modes including export) of finished goods products.
Contract and Program Management Cost
Cost centers that have to do with the initiation and
on going management of customer contracts including master agreements, compliance to volume based incentives, and other special
incentives.
Installation Planning and Execution Costs
Cost centers that have to do with the planning and
execution of product installation at customer designated locations.
Accounts Receivable Cost
Cost centers that have to do with the processing and
closure of customer invoices including collection.
Material Acquisition Cost
Purchasing Cost
The cost centers associated with both the strategic
as well as the tactical parts of the purchasing process.
Raw Material Warehouse Cost
The cost centers associated with the receiving, storage,
and transfer of raw material product.
Supplier Quality Cost
The cost centers associated with supplier qualification,
product verification and ongoing quality systems for raw materials.
Component Engineering and Tooling Cost
The cost centers associated with the engineering (design
and specification) and tooling costs for raw materials, i.e. packaging.
Inbound Transportation Cost
Cost centers that have to with the transportation
(all modes including import) of raw material and/or purchased finished good products.
Accounts Payable Cost
Cost centers that have to do with the processing and
closure of supplier invoices including credit and disputes.
Planning Cost
Demand Planning Cost
The cost centers allocated to unit forecasting and
overall demand management.
Supply Planning Cost
The cost centers allocated to supply planning including
overall supply planning, distribution requirements planning, master production planning, production scheduling.
Supply Chain Finance Control Cost
The cost centers in finance allocated to reconcile
unit plans with financial plans, account and control supply chain cost centers, and report financial performance of the supply
chain SCORcard.
Inventory Carrying Cost
Opportunity Cost
Inventory dollars times the cost of money for your
company.
Obsolescence Cost
The additional cost of obsolescence in the form of
accruals and/or write offs.
Shrinkage Cost
The additional cost of shrinkage in the form of accruals
and/or write offs.
Taxes and Insurance Cost
The cost centers allocated to the payment of taxes
and insurance for inventory assets.
IT Cost for Supply Chain Supply Chain
Application Cost
The cost centers summarizing the fixed costs associated
with supply IT application costs to Plan, Source, Make, Deliver, and Return.
IT Operational Cost for Supply Chain
The cost centers summarizing the ongoing expenses
associated with maintenance, upgrade, and development of IT costs to support Plan, Source, Make, Deliver, and Return.
