Supply Chain Cost Calculator

World-class total supply chain cost is 5% or less of revenue, according to Gartner Supply Chain Top 25 research. This includes all logistics costs: transportation, warehousing, inventory carrying costs, and reverse logistics. Average companies spend 8–12% of revenue on supply chain costs. Poor performers spend 15%+. The gap between world-class (5%) and average (10%) represents enormous profit improvement potential — a company with $100M revenue could free up $5M+ in profit by reaching world-class performance.

The highest-impact levers for reducing total supply chain cost are: (1) Reduce inventory carrying costs by improving turnover and reducing dead stock — carrying costs typically represent 20–30% of inventory value per year; (2) Optimise transportation through carrier consolidation, mode optimisation (rail/sea vs air), and load factor improvement; (3) Improve warehouse productivity through slotting, pick-path optimisation, and automation where ROI is positive; (4) Reduce returns costs through better order accuracy, quality inspection at source, and returns prevention analytics; (5) Negotiate supplier terms — payment terms improvements reduce working capital cost without operational change.

Target supply chain cost benchmarks vary by industry. Grocery and FMCG: world-class is 6–8% (higher due to refrigeration and high SKU count). General retail: 6–10%. E-commerce: 10–15% (last-mile delivery intensive). Manufacturing / industrial: 5–8%. High-tech electronics: 4–6% (high-value, low-weight goods). If your supply chain cost exceeds these benchmarks by more than 3 percentage points, a detailed cost decomposition is warranted to find the highest-cost components.