Total Landed Cost

During the last 10-15 years, outsourcing and offshoring, moving manufacturing into low cost countries (LCC) has been a standard move for most supply chain managers. Lately, however, more careful analysis has indicated that this may not anymore be as cost effective as commonly considered. Changes, like rising wages and price of fuel contribute further to the profitability of of off-shoring.

We can help you in defining the real costs of different sourcing and manufacturing alternatives over your whole supply chain, from sourcing to the client, or even maintenance costs if you are into services as well. The components of total landed cost come from several sources:

• Purchase price
• Transportation and logistics
• Customs and duties
• Inventory costs
• Overhead and administration
• Risk and Compliance

Whether your decision is to make or buy, understanding and calculating the real costs of alternatives helps you to make decisions with sound  business logic.