Where mid-market supply chains leak money.
A structured model of the seven cost pools between the ERP and the P&L, and how to size each one with your own data.
This report sets out a framework you can use to size supply-chain cost with your own data. It doesn't contain benchmark claims about other companies, and it is separate from the WERISCO supply chain audit, which shows the inventory and order value exposed and does not estimate savings.
The seven cost pools
- Excess inventory carrying cost: capital, storage, handling, obsolescence.
- Stockout cost: lost margin, recovery, penalties.
- Expedite freight: premium transport to recover late supply or demand surprises.
- Write-offs: expired, obsolete or damaged stock.
- Capacity loss: idle time and changeovers caused by shortages.
- Working capital: cash tied above target cover.
- Decision latency: the cost of detecting problems days late.
Sizing each pool
Each pool maps to data you already hold: inventory valuation, sales order history, freight invoices, adjustment postings, production records.
Why an external benchmark is less useful than your own baseline
Industry averages blend companies with different products, channels and strategies. Your own baseline, measured consistently, is the only number you can manage against.
Using the framework
Use the illustrative calculator to see how the pools add up, then size each one with your own finance data. To see where your supply chain is exposed today, book a supply chain audit: 20 minutes, two exports, no integration.
One supply-chain shock, decoded in numbers, and what a data-driven plant does about it.
