In the SCM Best Practice applications, the flow of goods is studied as a process going through the company.

Terms inbound and outbound process

• Inbound process refers to all working phases and actions that are necessary before sales or production.
• Also the sales or customer service personnel may carry out working phases related to the inbound process.
• Outbound process includes all working phases related to the delivery of a customer order. These include, for example, handling customer orders, giving information on the telephone, customer service, sales work, collecting goods in the warehouse, transportation of deliveries, etc.
• The work done in warehouses is allocated to the inbound and outbound processes on the basis of the matching principle.
• The costs for warehouse premises and equipment and cost of capital tied up in inventories are handled separately in the application.

What are cost drivers?

Costs result from various reasons. In activity based costing these reasons are called cost drivers.

• The costs are partly dependent on the numbers of purchase and sales transactions.
• Some costs results from the number of business partners, extent of product assortment, geographical distances or other reasons.
• Cost information is needed for SCM Best Practice Analyses.
• Also your information system needs the cost information for purchase parameters.