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CO1

Supply Chain Costs

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

IDNameLevelx
COCost0CO
CO1Supply Chain Costs1CO1
CO11Cost of Goods Sold2CO11
CO12Distribution Costs2CO12
CO13Other Operational Expenses2CO13

Process(es)

IDNameLevelx
PPlan1P
P1Plan Supply Chain Operations2P1
P2Plan Source2P2
P3Plan Make2P3
P4Plan Deliver2P4
SSource1S
S1Source-to-Replenish2S1
S2Source-to-Order2S2
S3Source-to-Engineering-Order2S3
S4Source Returns2S4
MMake1M
M1Make-to-Stock2M1
M2Make-to-Order2M2
M3Make-To-Engineering-Order2M3
M4Re-Make2M4
DDeliver1D
D1Deliver-From-Stock2D1
D2Deliver-to-Order2D2
D3Deliver-To-Engineering-Order2D3
D4Deliver Returns2D4

Term(s)

IDNameClearx
DRPDistribution Requirements PlanningDRP
DRP-IIDistribution Resource PlanningDRP-II
MRP-IIManufacturing Resource PlanningMRP-II
MRPMaterial Requirements PlanningMRP
CSCIStatement of Comprehensive IncomeCSCI
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