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The total cost of ownership

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Presentation on theme: "The total cost of ownership"— Presentation transcript:

1 The total cost of ownership
Acquisition Cost Management Cost Maintenance Cost Technical Support Cost Operating Cost Inventory Cost Training Cost Disposal Cost

2 Shopper behaviour when faced with a stock-out
Source: Corsten, D. and Gruen, T., ‘Stock-outs cause walkouts’, Harvard Business Review, May 2004

3 The impact of logistics and customer service on marketing
Consumer franchise Customer franchise Supply chain efficiency Marketing effectiveness Brand values Corporate image Availability Customer Service Partnership Quick response Flexibility Reduced asset base Low-cost supplier Market share Customer retention Superior ROI

4 Linking customer value to supply chain strategy
Identify value segments What do our customers value? Define the value proposition How do we translate these requirements into an offer? Identify the market winners What does it take to succeed in this market? Develop the supply chain strategy How do we deliver against this proposition?

5 The ‘Pareto’ or 80/20 rule % Sales/profits ‘A’ ‘B’ ‘C’
5% 15% % Sales/profits 80% ‘A’ ‘B’ ‘C’ 20% 50% 30% % Products/customers

6 Customer service and the 80/20 rule
Key products, key accounts (protect) A Develop Products B Develop Maintain C Review A B C Customers

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