Logistics costs are the costs incurred by the company or organization to guarantee a certain level of service to its customers and suppliers. They are classified into distribution costs, physical supply costs, and customer service costs.
Procedure to determine logistics costs
A practical way to determine logistics costs with a good level of confidence is presented below:
- Disaggregate logistics costs according to the established categories Establish the calculation bases of each of the elements of logistics costs by category Prepare the report of logistics costs and services Make analysis of the results Validate the results Prepare an improvement plan including logistics cost indicators
The other way is using a coefficient for allocation: here it is convenient to previously know the annual cost of internal resources associated with logistics operations and then apply the corresponding coefficient that is proportional to the annual percentage of resources used in these operations.
Knowing in detail the different logistics costs, we proceed to prepare (or take as reference company data) the report of logistics costs and services, from two consecutive periods (usually annually) to carry out the respective analyzes.
Based on these results, the company's directives must formulate the respective improvement plan and control the fulfillment of the objectives through logistics cost indicators.
