Presentation on theme: "The total cost of ownership"— Presentation transcript:
1 The total cost of ownership AcquisitionCostManagement CostMaintenance CostTechnical SupportCostOperatingCostInventory CostTraining CostDisposalCost
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 franchiseCustomer franchiseSupply chain efficiencyMarketing effectivenessBrand valuesCorporate imageAvailabilityCustomer ServicePartnershipQuick responseFlexibilityReduced asset baseLow-cost supplierMarket shareCustomer retentionSuperior ROI
4 Linking customer value to supply chain strategy Identify value segmentsWhat do our customers value?Define the value propositionHow do we translate these requirements into an offer?Identify the market winnersWhat does it take to succeed in this market?Develop the supply chain strategyHow do we deliver against this proposition?
5 The ‘Pareto’ or 80/20 rule % Sales/profits ‘A’ ‘B’ ‘C’ 5%15%% Sales/profits80%‘A’‘B’‘C’20%50%30%% Products/customers
6 Customer service and the 80/20 rule Key products, key accounts (protect)ADevelopProductsBDevelopMaintainCReviewABCCustomers