– Supply Chain Insight –
Fishbone Friday: High (or increasing) Cost-per-Case
High (or increasing) cost-per-case
Welcome supply chain leaders, to the third edition of Fishbone Friday!
If you missed last week’s edition where we discussed possible root causes for a lack of storage capacity in the warehouse, you can find it here.
Let’s get into the topic of the week: high (or increasing) cost-per-case. It’s not a bold – or surprising – statement to say that cost-per-case is the most critical performance metric within a distribution operation. Unlike performance indicators such as hourly order selection rate or labor standard efficiency, cost-per-case is a true indicator of an operation’s short-term health and long-term sustainability. While cost-per-case will fluctuate along with shipping volumes, an unusually high rate or a rate that has increased significantly over a short period of time is a clear indication of an high-priority inefficiency within the operation – one that should be addressed immediately.
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