DETERMINING COST TO SERVE FOR A CONSUMER PACKAGED GOODS COMPANY

• US 20150058086A1
• Filed: 03/11/2014
• Published: 02/26/2015
• Est. Priority Date: 08/23/2013
• Status: Abandoned Application

• Current Assignee: TATA Consultancy Services Limited (Tata Sons Pvt Ltd.)
• Original Assignee: TATA Consultancy Services Limited (Tata Sons Pvt Ltd.)
• Inventors: JOSHI, Nilesh Ashok, GUNTUKU, Harish Kumar, JAIN, Ankit Kumar
• Application Number:
  US14/205,237
• Publication Number:
  US 20150058086A1
• Time in Patent Office: Days
• US Class Current: 705/7.33
• CPC Class Codes: G06Q 30/0204 Market segmentation

Abstract

The present subject matter discloses system(s) and computer-implemented method(s) for determining total cost to serve (CTS) a product to a customer of a consumer packaged goods (CPG) company. The computer-implemented method includes identifying a total cost associated with the product and incurred by the CPG company in each of a plurality of organizational functions of the CPG company; allocating cost attributable to the customer for the one or more activities under each of the plurality of organizational functions; computing a CTS value for each of the plurality of organizational functions based on the allocated cost attributable to the customer; and determining the total CTS of the product served to the customer. The total cost is retrieved from a database. The allocation is based on predefined allocation criteria and the determination includes summing up the CTS values for each of the plurality of organizational functions.

Claims

1. A computer-implemented method for determining total cost to serve (CTS) a product to a customer associated with a consumer packaged goods (CPG) company, the method comprising:

identifying, by a processor, a total cost associated with the product and incurred by the CPG company in each of a plurality of organizational functions of the CPG company, wherein each of the plurality of organizational functions incurs cost for serving the product and comprises at least one functionality having one or more activities associated therewith, and wherein the total cost is retrieved from a database;

based on the total cost, allocating, by the processor, cost attributable to the customer for the one or more activities under each of the plurality of organizational functions, wherein the allocation is based on predefined allocation criteria;

computing, by the processor, a CTS value for each of the plurality of organizational functions based on the allocated cost attributable to the customer; and

determining, by the processor, the total CTS of the product served to the customer of the CPG company, wherein the determining includes summing up the CTS values for each of the plurality of organizational functions.

2. The computer-implemented method as claimed in claim 1, wherein the computing the CTS value for the plurality of organizational functions comprises computing a reduced CTS value for at least one of the plurality of organizational functions based on what-if scenarios provided by a user, in concurrence with contractual obligations of the CPG company in serving the product to the customer.

3. The computer-implemented method as claimed in claim 2, wherein the computing of the reduced CTS value, based on the what-if scenarios, comprises receiving a user input to vary at least one cost-incurring attribute of the at least one of the plurality of organizational functions, wherein the at least one cost-incurring attribute comprises a raw material selected for procurement, quantity of raw material selected for procurement, mode of manufacturing the product, number of pallets and eaches selected for warehousing, number of stores served, and number of shelves per store.

4. The computer-implemented method as claimed in claim 1, wherein the allocating comprises computing a fixed cost and a variable cost associated with the product based on the total cost.

5. The computer-implemented method as claimed in claim 1 further comprising identifying the plurality of organizational functions, wherein the plurality of organizational functions comprises all organizational functions that incur cost for serving the product to the customer by the CPG company.

6. The computer-implemented method as claimed in claim 1, wherein the plurality of organizational functions comprises procurement of raw materials, manufacturing, distribution and logistics, and sales and promotion, wherein the distribution and logistics comprises warehousing-raw materials, warehousing-finished goods, distribution to customer warehouse and stores, and third-party logistics and distribution.

7. The computer-implemented method as claimed in claim 1, wherein the identifying comprises:

receiving input from a user, wherein the input comprises at least one of a customer name and a product description, and a time period for determining the total CTS; and

retrieving historical data related to the CPG company from the database, based on the input.

8. The computer-implemented method as claimed in claim 1 further comprising identifying, by the processor, cost associated with the one or more activities under the at least one functionality associated with the each of the plurality of organizational functions, based on activity based costing, wherein the allocating comprises allocating cost attributable to the customer for the product under the one or more activities.

9. The computer-implemented method as claimed in claim 1 further comprising generating, by the processor, at least one dashboard for,

providing CTS break-up among the plurality of organizational functions;

and

comparing multiple customers based on at least one of CTS revenue ratio and the total CTS for each of the multiple customers over a time period.

10. The computer-implemented method as claimed in claim 1 further comprising determining, by the processor, customer profitability based on the total CTS and a net sales value associated with the product and the customer.

11. The computer-implemented method as claimed in claim 1 further comprising generating forecasts, by the processor, related to the total CTS of the product served to the customer based on a pre-defined forecasting model and a historical data of the customer.

12. The computer-implemented method as claimed in claim 11, wherein the pre-defined forecasting model comprises one of a moving average model, a winter'"'"'s model, and a causal model.

13. A cost to serve (CTS) determination system for determining total cost to serve a product to a customer associated with a consumer packaged goods (CPG) company, the CTS determination system comprising:

a processor;

input module, coupled to the processor, to,

receive input from a user, wherein the input comprises at least one of a customer name and a product description, and a time period for determining the total CTS; and

based on the input, retrieve historical data from a database; and

an allocation module, coupled to the processor, to,

based on the historical data, identify a total cost associated with the product and incurred by the CPG company in each of a plurality of organizational functions of the CPG company, wherein each of the plurality of organizational functions incurs cost for serving the product and comprises at least one functionality having one or more activities associated therewith; and

based on the total cost, allocate cost attributable to the customer for the one or more activities under each of the plurality of organizational functions, wherein the allocation is based on a predefined allocation criteria; and

a determination module, coupled to the processor, to,

compute, a CTS value for the each of the plurality of organizational functions based on the allocated cost attributable to the customer; and

determine, the total CTS of the product served to the customer of the CPG company, wherein the determination includes summing up the CTS values for each of the plurality of organizational functions.

14. The CTS determination system as claimed in claim 13, wherein the determination module computes a reduced CTS value for at least one of the plurality of organizational functions based on what-if scenarios provided by a user, and determines the total CTS based on the reduced CTS value.

15. The CTS determination system as claimed in claim 13, wherein the allocation module further identifies the one or more activities under the at least one functionality associated with the each of the organizational functions, based on activity based costing, and allocates cost attributable to the customer for the product under the one or more activities.

16. The CTS determination system as claimed in claim 13, wherein the determination module checks for duplication of the historical data retrieved from the database.

17. The CTS determination system as claimed in claim 13, wherein the determination module further determines customer profitability based on the total CTS and a net sales value associated with the product and the customer.

18. The CTS determination system as claimed in claim 13 further comprising a dashboard creation module, coupled to the processor, for generating at least one dashboard to:

provide CTS break-up among the plurality of organizational functions; and

compare multiple customers based on at least one of CTS revenue ratio and the total CTS for each of the multiple customers over a time period.

19. The CTS determination system as claimed in claim 13 further comprising a forecasting module, coupled to the processor, to generate a forecast for the total CTS of the product served to the customer based on the historical data of the customer and a predefined forecasting model.

20. A non-transitory computer readable medium having a set of computer readable instructions that, when executed, cause a computing device to determine total cost to serve (CTS) a product to a customer associated with a consumer packaged goods (CPG) company, the set of computer readable instructions, when executed, cause the computing device to:

identify a total cost associated with the product and incurred by the CPG company in each of a plurality of organizational functions of the CPG company, wherein each of the plurality of organizational functions incurs cost for serving the product to the customer and comprises at least one functionality having one or more activities associated therewith, and wherein the total cost is retrieved from a database;

based on the total cost, allocate cost attributable to the customer for the one or more activities under each of the plurality of organizational functions, wherein the allocation is based on predefined allocation criteria;

compute a CTS value for each of the plurality of organizational functions based on the allocated cost attributable to the customer; and

determine the total CTS of the product served to the customer of the CPG company, wherein the determining includes summing up the CTS values for each of the plurality of organizational functions.