How DHL Express Improved Its Costing Analysis

"We could only build cost models on what we had available," said Aitkin. "Nothing reconciled to the financial results. We couldn't produce a standard cost of shipment or pickup because we didn't have the data. We couldn't distinguish fixed and variable costs."

Aitkin and his colleagues realized that by collecting and analyzing good-quality data from all of its transactions with the companies it serves, DHL Express could gain an edge when it came to accounting for cost and pricing. The consistency of a single, worldwide costing system that reconciled to the company's global profit-and-loss statement would improve pricing management and enhance profitability improvement.

"It was a huge investment, and we didn't overcommit and didn't overpromise," he cautioned. "Our business case only promised savings we could prove." Aitkin was also fortunate enough, he said, to have the support of a CFO who believed in the importance of data, and a CEO who also knew the value of data.

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Keywords: supply chain management, supply chain management IT, value chain, value chain IT, logistics IT solutions, supply chain planning, sourcing solutions