Tuesday, July 8, 2008

Just How Important Is Landed Cost?

First of all, we all know it’s important. But then why is it no one seems to calculate landed cost the same way? Is it goods landed at port of entry? Or, as some suggest, is it goods delivered to
final destination?

For years, it seems landed cost was calculated as port of entry. But was that because it was the easiest thing to do? A recent Penn State Research Survey suggests to accurately determine
landed cost, you need to capture costs in six categories:
  • Purchase price
  • Transportation and logistics
  • Customs and imports
  • Inventory costs
  • Overhead and administration
  • Risk and compliance

Of six, multi-billion dollar companies studied in various industries, not one captured all the costs. And 46% were calculating total landed costs via Excel spreadsheets. The reason? Penn State feels a major contributing factor is lack of centralized data management. In summary, logistics IT still has a long way to go. But on the other hand, it’s come a long well as well. To see how far, check out our information management systems at http://www.totalogistix.com/. We believe the road to supply chain improvement lies in the details.

See for yourself, or even better, give us a call to discuss what we can do to reduce your logistics costs at 1 800. 989.0054 x120.

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