Using Cost-To-Serve to build resilience in the defence supply chain
Cost-To-Serve analysis is key to overcoming future supply chain disruptions in the military and defence sector, according to the latest insight from a global supply chain consultancy.
New thinking from Bis Henderson Consulting suggests Cost-To-Serve analysis should be adopted to help adapt procurement processes when faced with major supply chain disruptions caused by war, pandemic, Brexit or other significant global events.
Cost-To-Serve is the measurement of the true costs required to produce a product or meet a customer’s requirements.
The firm’s latest whitepaper reveals that Cost-To-Serve is a core, business-critical initiative for informing future decisions and direction, but it can also support the development of agile supply chains, ensuring resilience in the event of disruption.
Most importantly, having greater sight and understanding of Cost-To-Serve within the supply chain can enable organisations to pivot more quickly when disruption occurs.
While Cost-To-Serve is predominantly utilised to increase profitability throughout the supply chain, Bis Henderson Consulting is underlining its value as a tool for efficiency in the defence sector.
The firm’s analysis and experience shows that it can be used to improve cost transparency and highlight opportunities to boost productivity, leading to greater efficiencies across the whole supply chain.
Neil Adcock, managing director at Bis Henderson Consulting, is the leading contributor to ‘It Pays To Know Your Cost-To-Serve’.
He said: “Cost-To-Serve is primarily viewed as a profitability tool, particularly in ecommerce and healthcare markets, but its function provides wider benefits.
“In-depth analysis of this metric should be used to inform business strategy and performance optimisation across all sectors, but through our work we find that it isn’t being utilised in this way within defence and security.
“By applying Cost-To-Serve analysis to the defence sector, organisations can gain greater insight into the whole supply chain and use it to introduce greater transparency.
“This transparency is key to not only finding efficiencies, but also for identifying ways to adapt and pivot in the event of global disruption.
“The events of recent years have underlined the fact that cross-border supply chains are always at risk of disruption, but understanding where efficiencies can be made gives organisations full visibility and more control.
“By transferring industry best practice to manufacturing and procurement in the defence sector, we can ensure all angles and possibilities are considered, so clients get supply chains fit for the future and resilient to global events.”
Bis Henderson Consulting will be sharing advice on how Cost-To-Serve can be applied to defence and security supply chains at DSEi 2023 from September 12 to 15. To book an appointment to speak to a specialist at DSEi visit Pod 16 in the Manufacturing Hall.
For more information visit: www.bis-hendersonconsulting.com.