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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
=	COGS + Distribution Costs + Other   × 100% Revenue

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

Unit of measure: %

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:

5.00

(one vote)

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

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