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Supply Chain Costs Cost 41000 1 Supply Chain, Cost, COGS, Distribution Costs, Ratio The ratio of the total cost a company occurs to perform the supply chain activities to plan and position resources and execute customer order fulfillment and returns
CO1
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===Calculation=== | ===Calculation=== | ||
{{math|{{this}}|{{frac|COGS + Distribution Costs + Other|Revenue|100%}}}} | {{math|{{this}}|{{frac|COGS + Distribution Costs + Other|Revenue|100%}}}} | ||
| − | where | + | {{where|%|[[m:CO11|COGS]]|Annual Cost of Goods Sold|[[m:CO12]]|Total annual distribution costs|[[m:CO13|Other]]|Total annual other supply chain expenses (Other Operational Expenses)|Revenue|Total annual supply chain revenue. Generally this excludes revenue from selling company or supply chain assets}} |
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===Importance=== | ===Importance=== | ||
A lower percentage indicates better performance. A higher percentage indicates the company is spending more to fulfill demand and thus experience lower gross profit margins. Typically {{this}} alone don't show the full picture. [[m:CO]] and [[m:AE]] metrics can be influenced by fixed assets decisions for example: Assets acquired via a short term lease are operating expenses, thus increasing costs, but improving Fixed Asset turns at the same time. | A lower percentage indicates better performance. A higher percentage indicates the company is spending more to fulfill demand and thus experience lower gross profit margins. Typically {{this}} alone don't show the full picture. [[m:CO]] and [[m:AE]] metrics can be influenced by fixed assets decisions for example: Assets acquired via a short term lease are operating expenses, thus increasing costs, but improving Fixed Asset turns at the same time. | ||
Latest revision as of 03:37, 1 September 2020
Supply Chain Costs is a ratio that measures the total cost a company occurs to perform the supply chain activities to plan and position resources and execute customer orders (i.e. generate revenue). Supply Chain Costs is measured as a percentage of revenue for the same period.
Calculation
| Supply Chain Costs | ||||
| = |
| |||
where:
- COGS = Annual Cost of Goods Sold
- Distribution Costs = Total annual distribution costs
- Other = Total annual other supply chain expenses (Other Operational Expenses)
- Revenue = Total annual supply chain revenue. Generally this excludes revenue from selling company or supply chain assets
Importance
A lower percentage indicates better performance. A higher percentage indicates the company is spending more to fulfill demand and thus experience lower gross profit margins. Typically Supply Chain Costs alone don't show the full picture. Cost and Asset Efficiency metrics can be influenced by fixed assets decisions for example: Assets acquired via a short term lease are operating expenses, thus increasing costs, but improving Fixed Asset turns at the same time. Statement of Comprehensive Income
Community Importance Rating: Hierarchy
| ID | Name | Level | x |
|---|---|---|---|
| CO | Cost | 0 | CO |
| CO1 | Supply Chain Costs | 1 | CO1 |
| CO11 | Cost of Goods Sold | 2 | CO11 |
| CO12 | Distribution Costs | 2 | CO12 |
| CO13 | Other Operational Expenses | 2 | CO13 |
Process(es)
| ID | Name | Level | x |
|---|---|---|---|
| P | Plan | 1 | P |
| P1 | Plan Supply Chain Operations | 2 | P1 |
| P2 | Plan Source | 2 | P2 |
| P3 | Plan Make | 2 | P3 |
| P4 | Plan Deliver | 2 | P4 |
| S | Source | 1 | S |
| S1 | Source-to-Replenish | 2 | S1 |
| S2 | Source-to-Order | 2 | S2 |
| S3 | Source-to-Engineering-Order | 2 | S3 |
| S4 | Source Returns | 2 | S4 |
| M | Make | 1 | M |
| M1 | Make-to-Stock | 2 | M1 |
| M2 | Make-to-Order | 2 | M2 |
| M3 | Make-To-Engineering-Order | 2 | M3 |
| M4 | Re-Make | 2 | M4 |
| D | Deliver | 1 | D |
| D1 | Deliver-From-Stock | 2 | D1 |
| D2 | Deliver-to-Order | 2 | D2 |
| D3 | Deliver-To-Engineering-Order | 2 | D3 |
| D4 | Deliver Returns | 2 | D4 |
Term(s)
| ID | Name | Clear | x |
|---|---|---|---|
| DRP | Distribution Requirements Planning | DRP | |
| DRP-II | Distribution Resource Planning | DRP-II | |
| IFRS | International Financial Reporting Standards | IFRS | |
| MRP-II | Manufacturing Resource Planning | MRP-II | |
| MRP | Material Requirements Planning | MRP | |
| CSCI | Statement of Comprehensive Income | CSCI |