Total Cost of Ownership (TCO) in Logistics – Overview
The term total cost of ownership (TCO) describes the total costs of a product or service over its entire life cycle. This includes not only the acquisition costs, but also operating costs, maintenance, disposal, and indirect costs.
The TCO concept is particularly important in logistics, as companies not only have to invest in vehicles, warehouses, and IT systems, but also need to optimize…
Why Total Cost of Ownership (TCO) matters when choosing your WMS
Choosing a warehouse management system (WMS) is one of the most important decisions companies in the logistics and supply chain sector have to make. But with so many providers, features, and pricing models out there, the question quickly arises: How can you make an informed decision that will be successful in the long term?
A decisive factor lies in an often underestimated variable: the…
Opportunity costs in logistics
Opportunity costs, also known as alternative or waiver costs, express a lost benefit in costs on the basis of decisions with negative effects, and enable an almost exact cost calculation. The degree of utilization always refers to existing resources (human, machine, space and operating resources). The reasons for these types of costs are the decisions mentioned above, which leave no room for…
Efficient structures through sustainable cost reduction – Part I
Due to ever more rapidly changing market requirements, companies are facing major challenges - an enormous increase in the number of variants. This leads to a high level of complexity at product and, above all, process level. The result is an increase in manufacturing and overhead costs as well as a high demand for flexibility and reactivity. Under- or overcapacities lead to a far-reaching…
Efficient structures through sustainable cost reduction – Part II
If processes within the company are continuously analyzed and thus optimized, not only are new synergies created, but the resulting structures also lead to demonstrably sustainable cost reductions. The following second part, 'Efficient structures through sustainable cost reduction', shows why a target-oriented process analysis is so important.
Identification of potential and prioritization
The…
Complexity costs – additional expenses in the supply chain
Complexity costs are costs that are difficult to calculate and are generally associated with the continuously increasing complexity of processes, services, customer and supplier relationships as well as diversification, i.e. the variety of products. In order to uncover the mostly non-transparent cost drivers, revenues and costs, both within the company and in the associated supply chain, are…
The cost of unrealized opportunities in supply chain management
No company can afford not to have the cost side under control. The financial accounting figures serve as the basis for this. In many cases, the figures for the company's cost accounting are derived from these. A look at a company's cost accounting shows numerous meticulously recorded cost types, which are allocated to the various cost units (e.g. products, services) via cost centers.
In search…
What are complexity costs – overview and countermeasures
Who hasn't heard Henry Ford's legendary statement that "any customer can have a car painted any color that he wants as long as it is black"? How much has the world changed since then, from seller's markets to buyer's markets? Customers are placing ever higher demands on products. The differentiation(customizing) of numerous industrially manufactured products has increased exponentially, which has…
Storage costs or warehousing costs
Trading companies and manufacturing firms usually have a warehouse or distribution center. Raw materials, consumables and supplies, intermediate products, semi-finished products, finished products and spare parts are stored in them. The storage of these goods incurs costs, which in total are referred to as warehousing costs, storage costs or inventory costs, and which in turn account for a large…
Kaizen system
The Kaizen system is a Japanese management system that involves all employees in a continuous improvement process across all areas of the company. Literally translated, Kai means “change” and Zen means “for the better.”
The Kaizen system aims to improve proven products in small steps rather than achieving sudden improvements through innovation. The primary focus is not on maximizing profits,…
