Total Cost to Serve: The "No Surprises" View of Cost Management

Focusing on some cost components without obtaining the full view can lead to poor decisions—and unpleasant surprises. You need to know all your costs—by product and location—to determine which products should go directly to customers and which make sense to send to a distribution center; what is driving up inventory costs and how efficient your distribution centers are.

Manhattan Associates' Total Cost to Serve solution determines the total landed cost—how much it costs to get product from your supplier to your warehouse—and combines that with the cost of delivering the product from the warehouse to the customer. Total Cost to Serve enables better sourcing, routing and fulfillment decisions by capturing actual costs as they happen.

Total Cost to Serve allows you to see how costs are incurred and allocated by item for each supply chain location—wherever goods aggregate—as well as for each item on a route or sourced from a supplier. The solution also enables you to aggregate costs by product class and across the company for various time periods. And, Total Cost to Serve allows you to break these costs down by direct or indirect cost component, so you can track supplier cost, shipping cost, inventory carrying cost, warehouse labor costs and customer-defined costs such as import duties, security inspection charges and port fees. The solution provides user-defined business rules to allocate product costs by weight, volume, quantity, value and distance or any weighted combination of these factors.

Get Complete Visibility into Your True Costs

Total Cost to Serve accesses cost information from Manhattan sources such as Extended Enterprise Management, Distribution Management and Transportation Lifecycle Management as well as non-Manhattan sources to capture actual costs as they are incurred. As a result, the solution:

• Enables better sourcing, routing and order fulfillment decisions based on cost
• Provides visibility into true costs by item, location, route, supplier and purchase order, providing better product margin visibility throughout the supply chain
• Creates a foundation for optimization of the supply network as a whole
• Provides flexible apportionment rules to allocate cost at the appropriate level
• Calculates both landed cost and cost-to-serve separately for each location in the supply chain
• Aggregates costs up item, location and time hierarchies
• Reports and analyzes costs using Manhattan's Supply Chain Intelligence (SCI) solution