Cost-to-Serve Framework: Steps for Strategic Cost Analysis PPT

This PPT slide, part of the 25-slide Cost-to-Serve (CTS) Analysis PowerPoint presentation, presents the Cost-to-Serve (CTS) Framework, a structured approach for organizations to analyze costs across various dimensions such as products, customers, and geographies. It emphasizes the importance of understanding cost drivers within the entire value chain. The framework is designed to assist supply chain practitioners in breaking down costs through an activity-based modeling algorithm. This method allows for detailed cost calculation at multiple levels, which is crucial for informed decision-making.

The framework consists of 5 key steps. The first step involves obtaining buy-in from key stakeholders, which is essential for ensuring alignment and support throughout the process. Next, conducting cost categorization helps in organizing costs into meaningful groups, facilitating a clearer analysis. The third step focuses on determining the per-unit cost breakdown, allowing organizations to understand the cost implications of individual products or customer segments.

Developing classification matrices is the fourth step, which aids in visualizing and comparing costs across different categories. This step is vital for identifying patterns and insights that can drive strategic decisions. Finally, the framework culminates in making joint decisions based on the insights gathered. This collaborative approach ensures that all relevant parties are involved in decision-making, leading to more robust outcomes.

The structured data generated through the CTS analysis not only highlights cost-saving opportunities, but also informs strategies for product profitability. This framework is particularly useful for organizations looking to optimize their supply chain costs while enhancing overall profitability.

This slide is part of the Cost-to-Serve (CTS) Analysis PowerPoint presentation.

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