Evaluation of the Cost Drivers and Allocation Framework in Outbound Logistics of the Fast-Moving Consumer Goods Industry

Abstract

The fast-moving consumer goods industry is a complex trading environment, with many companies experimenting with various ways to increase profit. Outbound logistics, as an integrated concept within supply chain management, remains a key focus area for companies due to the high costs involved. The reality, however, is that often companies do not understand the outbound logistics cost drivers, and hence the profitability of current (let alone new) channels, regions, products, and customers. This is simply due to insufficient information being available from traditional accounting statements. The study evaluates the outbound logistics cost drivers of the South African fast-moving consumer goods industry, and describes an outbound logistics cost allocation framework. OPSOMMING Die vinnig bewegende verbruikergoedere (VBV) industrie is 'n komplekse handelsomgewing waar menigte maatskappye eksperimenteer met verskeie metodes om winsgewendheid te verbeter. Uitgaande logistiek, as 'n geïntegreerde konsep as deel van vervoerkanaal-bestuur, bly 'n belangrike fokusarea vir maatskappye weens die hoë koste daaraan verbonde. Die realiteit is egter dat maatskappye dikwels nie die dryfveer van logistieke koste verstaan nie, en dus ook nie die winsgewendheid van huidige (of nuwe) kanale, streke, produkte en kliënte nie. Dit is bloot as gevolg van onvoldoende inligting beskikbaar vanaf tradisionele rekeningkundige state. Die studie evalueer dus die uitgaande logistieke kostebestuurders van die Suid-Afrikaanse VBV-industrie en beskryf 'n uitgaande logistieke koste toekenningsraamwerk.

Influence of Outbound Logistics Strategies on the Competitive Advantage of Automotive Companies in Kenya

“…These findings support the findings by Ambe and Badenhorst-Weiss (2011) that ensuring efficient logistics management processes can contribute to sustainable competitive advantage. Niekerk and Bean (2019) had similar findings that the efficient distribution of finished goods to the end consumer of products can be a source of competitive advantage within the supply chain. Besides, Rajahonka and Bask (2016) had similar findings that manufacturers often outsource deliveries to logistics service providers under different outsourcing policies, thereby enabling them to focus on their core activities for a competitive advantage in their industry.…”

“…According to Niekerk and Bean (2019), the logistics function can be the key facilitator in the cross-functional effort for supply chain integration to meet future needs, which are now assumed to be of strategic importance. Outbound logistics is a crucial field of logistics management (Moonsri, Sethanan & Worasan, 2022).…”

“…Outbound logistics is a crucial field of logistics management (Moonsri, Sethanan & Worasan, 2022). Outbound logistics, a subset of supply chain management, is defined as "every process involved in the shipping and holding of products after they are completed until they are received by the customer" (Niekerk & Bean, 2019). Outbound logistics distributes finished goods to the end consumer of products.…”

A Systematic Literature Review of the Analysis of Costs and Other Dimensions in Process Mining and Related Disciplines

“…This publication, in the context of management accounting, proposes the creation and utilization of cost models to annotate the activities in event logs based on their associated cost drivers. Cost drivers refer to anything that causes a change in the costs of an activity due to resource consumption [10], [11].…”