Order Management Cost measures a company’s expenses related to the creation and maintenance of orders, order documentation, customer credit and invoices. Example costs include: Order management labor cost, automation cost, property, plant & equipment cost and order management governance, risk and compliance costs.
Calculations
Order Management Cost is calculated as cumulative annual (or other reporting period) order management costs
where:
Unit of Measure: Currency
Order Management Cost Ratio compares order management costs to total sales revenue for benchmarking purposes.
| Order Management Cost Ratio |
| = |
| Order Management Cost |
× 100 % |
| Total Revenue |
|
where:
- Order Management Cost = Total annual order management costs
- Revenue = Total annual supply chain revenue
Unit of Measure: %
Importance
A lower percentage indicates better cost performance. For benchmarking purposes this metric is measured annually. For scorecards, dashboards and cockpits these a typically a rolling number of months.
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Community Importance
Rating:
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