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Understand your costs, direct your business

Apr 21, 2024
Understand your costs, direct your business

End to end visibility has become a hot topic in the logistics and wider supply chain sectors. However having this type of visibility is more than knowing the location and status of raw materials, parts or finished goods.

It also applies to your costs. Understanding your key cost drivers, from end to end, provides a solid basis for understanding and managing your business. This is especially important in situations where there’s a lot of complexity, many variables and margins are tight.

Costing data is not just something for the finance department.

Sales teams can use costing data to identify unprofitable clients and then examine ways to improve margins through, for example, service level adaptation or price increases.

It’s much easier for Pricing departments to set appropriate (and profitable) pricing if there’s an understanding of the key cost drivers underpinning a solution. An end to end view also provides the flexibility to offer spot rate and dynamic pricing that ensures a margin.

Operations need detailed visibility on their fixed and variable costs and ops cost per move, so they can understand the implications of adding more resources to support a particular activity. And to push back when over eager Sales teams want extra services provided to a client for free…

This short video illustrates an end-to-end costing analytics solution we developed for one logistics client. The solution maps the general ledger to operations data, calculates costs for each activity and allocates an overhead cost to each shipment. The system is simple to navigate via a series of filters, enabling users to drill down in detail on all activities such as; shipment collection, sorting, processing, linehaul, customs and last mile delivery – plus sales & customer service support.

If you’d like to discuss how an end-to-end costing system can benefit your business, please get in touch, we’d be happy to help.

Photo by Marc Schulte on Unsplash

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