Cost to Serve (CTS)
Cost to serve is an approach that will help you identify the total cost of customer service at the level of each customer or each item. You can find out which deliveries are not profitable for you. With most companies that deal with supply, 20-40% of deliveries are not profitable.
With CTS analysis we can help you identify which customers are profitable for you as a company and focus on them, and also get information on which deliveries are not profitable.
Armed with this information, you can focus on optimizing the process of delivering goods to non-profit customers or negotiating different prices for non-profit deliveries.
CTS gives you information on the profitability of delivery and at the item level. Some items take up more space in the warehouse and in transport, require special temperature conditions, or special packaging conditions, and all this carries higher logistics costs.
Unfortunately, most ERP systems do not have the level of detail required to report logistics service.
We could help you identify profitable and unprofitable deliveries and reduce overall logistics costs and increase your cash flow.