Cost to Serve Visibility

ongoing visibility to detailed costs across the end-to-end supply chain, referred to as Net Landed Cost to Serve

calculating cost to serve

Companies struggle to calculate some form of Cost to Serve and to calculate it with accuracy and recurring consistency.


+ Customer service overhead

+ Customer value learn costs

+ Order management overhead


+ Business unit and factory planning overhead

+ Materials and capital acquisition planning overhead


+ COGS materials

+ Materials purchase price variance

+ Factory capital acquisition and indirect materials

+ Sourcing, procurement and accounts payable overhead

+ Raw materials carrying and obsolescence costs


+ COGS internal conversion costs or outsourced manufacturing costs

+ Standard cost variances

+ Finished goods and WIP inventory carrying and obsolescence costs


+ Internal warehouse costs (space, equipment, people)

+ 3PL/4PL costs

+ Tax, licensing and customs

+ Inbound and outbound carrier costs

+ Logistics security costs

+ Special services (boxing, labeling, etc.)


+ Product returns costs

+ Repair costs


+ Supply chain management overhead (admin and center of excellence)

+ Supply chain IT overhead

+ Supply chain Finance overhead

+ Supply chain HR overhead

+ Costs of continuous improvement and poor quality mitigation

source: Gartner


While traditional accounting methods use some form of standard cost (procurement/purchasing cost), Net Landed Cost to Serve (NLCTS) uses transactional data created across the end-to-end supply chain for an accurate cost to serve measurement.

Supply Chain Network


Competitive Insights is able to provide accuracy to the SKU-level and the highest level of specificity for cost performance from procurement to the customer’s delivery location.

Performance Measurement

Sourcing cost

Gross Sales
- Discounts
- Promotions

Gross Sales
- Discounts
- Promotions
- Sourcing Cost

Sourcing Cost
+ Transportation cost
+ Warehousing cost
+ Inventory Carrying Cost
+ Distribution fees

Gross Sales
- Discounts
- Promotions
- Sourcing Cost
- Transportation cost
- Warehousing cost
- Inventory Carrying Cost
- Distribution fees

Performance Measurement


Cost-to-serve calculation is not one-size-fits-all. Competitive Insights uses a proven of methodology by creating Functional Analytics™, a type of supply chain mapping for agreeing on the scope, clarifying your unique operational processes and defining the data needed.

Profitability as the Common Thread


blog: Knowing Your Actual Cost To Serve For Each Customer


blog: The Ultimate Value from Supply Chain Visibility