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FebruAry 2012

NeWSLetter

Contact Information
International Sales

MANAGING COSG vs COGS


Increasingly, Supply Chain participants are extending lean focus to not only the traditional cost-of-goods-sold focus but also into the cost-of-selling-goods. The COSG calculation begins from the point at which a company has product available to sell. Costs can be categorised as those: incurred in logistics incurred in funding finished goods inventory sales process costs of order management, currency management, VAT and other compliance activities and managing global trade Companies are moving to optimize those costs by adopting new supply chain maturity trends: 1. Logistics: Do finished goods need to be warehoused close to the ultimate customer, perhaps for postponement reasons? Can the product be centrally distributed instead? Can fixed logistics costs be swapped for variable costs?

Solutions
SerCom provides solutions to optimize the supply chain. Sourcing Inventory planning Purchasing Materials QA Supplier management Inventory reduction Inventory financing Supplier consolidation Logistics Product kitting and configuration

Javier Villamizar
Miami, USA
jv@sercomsolutions.com

+1 305 498 0384

Asia

Selina Yang

Shenzhen, China
selina.yang@sercomsolutions.com

2. Inventory Costs: How much stock is being stored and what is the expected demand profile? Can stock levels be lessened while still ensuring no sale is missed? Is there a compliant model whereby finished goods can be moved off balance sheet? 3. Sales Process Costs: Can VAT and other taxes be managed by someone else? Do models exist to automate order management and fulfilment? Do companies exist that can better manage the payable/ receivable currency trap?

News
Pan-EMEA Distribution SerCom Solutions is now providing pan-EMEA distribution solutions to our customers. This end to end solution includes: Order management Shipping Supply collaboration Billing & Collections VAT management Payment of any other required remittances

+86-755-82461212 ext.212

Padraig Henry
Dublin, Ireland
padraig.henry@sercomsolutions.com

Europe

For further information click here.

+353 87 6184366

Mexico

COSG Management Strategies


Not every strategy works for every organisation but the table below shows the possible optimizations to be considered as companies mature their COSG. Several global providers exist in each area of Logistics, Inventory and Sales Process optimization services, delivering cost downs and real-value proposals. Globally, however, few companies offer all solutions in one menu of services.
LOGIStICS INveNtOry SALeS PrOCeSS

Alvaro Salinas
Mexico
alvaro.salinas@sercomsolutions.com

+52 1 33 34820602

Network Review Warehouse and Distribution Outsource Asia Direct Ship Analysis Postponement proposals Lean Warehouse Operations

DSI (days-stock) diagnostic FG Planning Review Excess avoidance strategies Cost-of-Money calculation Currency exposures Global Distributor Option
tIMe

Order Management Cost Review Automations / Portals / Collaboration Tools cost /benefit VAT /regulatory compliance costs Office network costs Global Distributor Option

FebruAry 2012

NeWSLetter CO N t I N u e d

Logistics cost improvements concentrate on moving to a variable cost-per-unit. This offers controlled costs and can only be achieved by either level loading activity or outsourcing Logistics operations globally to a variable cost 4pl organization. Similarly, for smaller finished goods shipments, suitable direct ship options now exist offering acceptable door to door package shipment from Asia. Inventory is immediately improved by adopting best-practice finished goods planning techniques. Companies exist that can do this analysis for you and deliver to you proposals based on your own data. Sales process costs, similarly, can be addressed using viable options to outsource finished goods stocking to a Global Disti who can purchase the goods and transact the final sale to your customer, funding that inventory and managing currency, billing and collection. Good service providers, can again, propose real-value, using your own data, and their own modelling tools to insert global distribution services into your supply chain and reduce costs.

SerCom Solutions COSG Services


SerCom Solutions offers services to address all areas of COSG. Using our proprietary real supply chain value methodology (see Newsletter Aug 11) SerCom uses information gathered from your business to model real-value proposals. Service proposals that can deliver real-value potentially for your company include : Network review and logistics outsource proposals, using SerComs global network Inventory planning services using SerCom Solutions global inventory planning people, tools and processes Finished Goods procurement and stock holding proposals Global Distribution proposals : order management, sales execution, fulfillment and VAT/other compliance Stock funding options Order Management and Supply Collaboration Tools

Model A
SerCom Solutions offers a configurable menu of supply chain services, tailored to your needs and based exclusively on real-value worked proposals, built using your data and your input.

Model b
Using designated suppliers and agreed purchasing rules, SerCom can help plan finished goods stocking optimally.

For further information please contact your SerCom Solutions representative or Start Saving now using the contact us StartSaving page on our website!

www.sercomsolutions.com

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