Manufacturer Cost to Serve Cycle
Complete cycle includes purchase order through fund reconciliations, not just fulfillment through delivery.
Implementing a Cost to Serve Based Pricing and Distribution Strategy
Cost savings throughout the supply chain for mutual benefit to manufacturer and distributor can be achieved by providing the proper incentives and knowledge to change the customer's behavior. A properly designed cost to serve program allows manufacturers to service all sizes of orders while still achieving the manufacturer's margin targets. Any option a customer chooses for ordering, results in the same margin impact to the manufacturer.
Manufacturer Benefits of Cost to Serve
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Proper cost recovery, regardless of order size and procurement method
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Most manufacturers don’t recognize the actual differences in costs associated with varying order sizes and methods of shipment.
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Internal efficiencies create a smoother supply chain, allowing you to focus on what’s really important … order fill
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Reduced paperwork
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Increased customer satisfaction promotes partnership for further growth
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Align redistribution fees and pricing with internal cost to serve
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Aligns with Sysco RDC requirements and a general distributor need to improve margins
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Identify legitimate ways to fund distributor profitability versus continued use of trade program and other non-performance based growth tools
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Revenue driven manufacturer profit improvements
Typical Project Work Plan
FAFH Consulting, LLC
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