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Supply Chains across industries are being revolutionized at a rapid pace by technology. By implementing technology systems, Supply Chain organizations aspire to eliminate waste, meet customers' needs at reasonable costs, and ensure profitability. Enterprise Resource Planning (ERP) systems facilitate in processing unstructured data at an aggregated level. However, at workflow or micro level the data produced through ERPs needs to be further refined to understand costs.

This presentation provides a detailed overview of the Cost-to-Serve Analysis Framework, which provides Supply Chain professionals the means to identify the total cost of serving customers--including all the costs in a product's value chain (from raw material to delivery)--at product as well as customer levels. Failure to identify negative-margin products and customers debilitates profitability. We can conduct CTS Analysis to prevent this.

CTS Analysis can divide the entire Supply Chain into multiple tasks, while calculating the costs at every task, helps the Supply Chain practitioners calculate costs at various levels. The CTS Framework entails 5 steps:

1. Obtain Buy-in from Key Stakeholders
2. Conduct Cost Categorization
3. Determine per Unit Cost Breakdown
4. Develop Classification Matrices
5. Make Joint Decisions

Other topics covered in this deck include Activity-based Costing (ABC), ABC vs. CTS, key objectives of using CTS, and Classification Matrices.

The slide deck also includes some slide templates for you to use in your own business presentations.

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Source: Cost-to-Serve (CTS) Analysis PowerPoint document

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Cost-to-Serve (CTS) Analysis

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Tag(s): Activity Based Costing Supply Chain Management Cost Analysis

Number of Slides: 25 (includes cover, transition slides)

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