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CO121

Order Management Cost

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.

Calculation

Order Management Cost is calculated as cumulative annual (or other reporting period) order management costs

where: Unit of Measure: Currency

Benchmarking

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. t:OM

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Hierarchy

IDNameLevelx
CO12Distribution Costs2CO12
CO121Order Management Cost3CO121
CO1211Order Management Labor Cost4CO1211
CO1212Order Management Automation Cost4CO1212
CO1213Order Management PP&E Cost4CO1213
CO1214Order Management GRC Cost4CO1214

Process(es)

IDNameLevelx
S401Process Return Inquiry3S401
S402Create Return Authorization3S402
S408Settle Return3S408
D101Process Inquiry3D101
D102Create Order3D102
D103Reserve Inventory3D103
D105Invoice3D105
D201Process Inquiry3D201
D202Validate & Create Order3D202
D203Route & Schedule Order3D203
D205Invoice3D205
D301Receive Request for Proposal3D301
D302Develop & Present Proposal3D302
D303Create Project Order3D303
D304Schedule Project Resources3D304
D305Schedule Delivery & Installation3D305
D306Invoice3D306
Order Management Cost Distribution Costs 41210 3 Order Management, Distribution, Delivery, Call Center Order Management Cost measures a company’s expenses related to the creation and maintenance of orders, order documentation, customer credit and invoices