Cost-to-Serve Analysis
Analyze customer-level profitability and service costs
View:
Cost Category:
Period:
Avg Cost-to-Serve
$4.23
per unit
8% vs prior year
Total Service Costs
$18.4M
3% vs prior year
Profitable Customers
847
/ 1,024
83% of customer base
Unprofitable Customers
177
/ 1,024
$3.2M in losses
Highest Cost Driver
Distribution
42% of total costs
Net Contribution
$42.8M
5% vs prior year
Cost Breakdown by Category
Distribution & Logistics
$7.7M (42%)
Order Processing
$4.4M (24%)
Returns Handling
$2.9M (16%)
Customer Service
$2.0M (11%)
Credit & Collections
$1.4M (7%)
Customer Profitability Distribution
<-10%
42
-10-0%
135
0-10%
187
10-20%
298
20-30%
247
>30%
115
Net Margin Distribution (Customer Count)
Cost-to-Serve by Channel
Acute Care
312 customers
$5.67
+12% vs avg
Retail Pharmacy
456 customers
$3.21
-24% vs avg
Specialty
156 customers
$4.89
+16% vs avg
Long-Term Care
100 customers
$4.12
-3% vs avg
Customer Profitability Analysis
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Community Care Clinic
DEA: DE4567890 • Long-Term Care
Unprofitable Customer
This customer has a negative net margin of -5.0%. Service costs exceed the contribution margin.
Profitability Waterfall
$890K
Revenue
-$623K
COGS
$267K
Gross
-$178K
Service
-$134K
Rebates
-$45K
Net
Service Cost Breakdown
Distribution (High frequency, small orders)
$89,000
+45% vs avg
Order Processing (Manual orders)
$44,500
+62% vs avg
Returns (High return rate)
$26,700
+89% vs avg
Customer Service (High call volume)
$17,800
+34% vs avg
Total Service Cost
$178,000
20% of revenue vs. 5% benchmark
Improvement Recommendations
1
Consolidate Deliveries
Move from daily to 3x weekly deliveries. Est. savings: $35,000/year
2
Implement EDI Ordering
Reduce manual order processing. Est. savings: $28,000/year
3
Review Rebate Terms
Renegotiate rebate rate from 15% to 12%. Est. improvement: $27,000/year
Potential Net Impact
+$90,000/year
Could move customer to 5.1% positive margin