1. The impact margin and asset turn on ROI
Profit
Sales
(Margin)
20% ROI
15% ROI
10% ROI
Sales
Cap Emp
(Asset turn)

2. Logistics impact on ROI
Customer
service
Sales
revenue
Profit
Logistics
efficiency
Costs
Return on
investment
Pipeline
management
Cash
Invoice
accuracy
Net receivables
Capital
employed
Just-in-time
logistics
Inventory
Fixed assets
Asset
deployment
& utilisation

3. Logistics management and the balance sheet
Logistics variable
Assets
Order cycle time
Cash
Order completion rate
Receivables
Invoice accuracy
Inventories
Inventory
Distribution facilities and equipment
Property, plant and equipment
Plant and equipment
Liabilities
Current liabilities
Purchase order quantities
Debt
Financing options for inventory,
plant and equipment
Equity

4. The drivers of shareholder value
Revenue
growth
Tax
minimisation
Shareholder
value
Working capital
efficiency
Fixed capital
efficiency
Operating cost
reduction

5. Changing the cash flow profile
Time
Source: Srivastava, R. et al., ‘Market-Based Assets and Shareholder Value:
A Framework for Analysis’, Journal of Marketing, Vol. 62, No. 1, January 1998, pp.2-18

6. Stages in the order-to-collection cycle
Order placement
and communication
Order entry
Credit check
Documentation
Order picking
Delivery
Invoicing and
collection

7. The total costs of a distribution network
Total distribution costs
Costs
Trunking costs
Inventory costs
Outlet costs
Local delivery costs
Order processing costs
Number of outlets

8. Horizontal flows that cut across functional boundaries
Purchasing
Sales
Transportation
Production
Marketing
Etc
Channel A
Channel B
Channel C

9. The programme budget (£’000)
Functional area 1
Functional area 2
Functional area 3
Functional area 4
Total channel cost
Channel A
100 90 20 80
290
Channel B 50 70
200
340
Channel C 30
220
Functional budgets
190
270
170
850

10. Customer profitability analysis
Cumulative contributions (%)
Cumulative customers (%)
Source: Hill, G.V., Logistics – The Battleground of the 1990’s, A.T. Kearney., Inc.

11. Customer profitability analysis: a basic model
Direct
Gross sales value (GSV)
Indirect
Trade discount/
Terms of trade
Net sales value (NSV)
Customer related costs (direct)
Production
costs
Sales calls
In-store and co-operative promotions
Bonuses
Merchandising
Production contribution
(Sales)
Marketing costs
Overhead costs (indirect)
Sales force management
National advertising campaign
Marketing
contribution
Customer-related costs (direct)
Distribution
Service costs
Transportation
Packaging/unitisation
Stockholding
Warehousing
Trade credit
Order processing
Customer contribution
to company overhead profit
Source: Garttoma, J.L. and Walters, D.W.,
Managing the Supply Chain: A Strategic
Perspective (PalgraveMacmillan, 1996),
Reproduced with permission of Palgrave Macmillian

12. Customer profitability matrix
Cost
engineer
High
Protect
Net sales value of customer account
Danger
Zone
Low
Build
Low
High
Cost-to-serve