How Do We Analyze
Supply Chain Issues?

Supply chain management is being recognized as an important way to improve an organization’s financial
performance, while at the same time enhancing customer service. There are many alternatives to applying
a logistics strategy, and management may struggle with analyzing these options and understanding the
consequences. Examples follow:

• What are my total logistics costs and the value from improvements?
• Should I use an LTL carrier or dedicated contract carriage?
• How can I get timely information about the costs of my supply chain activities?
• Should I open a new warehouse or use existing facilities?
• Should I use public or private warehousing?
• Should I lease or buy transportation equipment?
• What is the financial impact from reduction in cycle times?
• What is the tradeoff between inventory carrying costs and expedited transportation?
• What measures should I use to evaluate logistics performance?



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Chesapeake Logistics provides the following supply chain analysis services:

• Quantify financial impact of logistics alternatives
• Review operational logistics practices, and recommend
specific changes to increase value
• Recommend and evaluate outsourcing alternatives
• Design and implement activity-based costing
• Develop financial models to facilitate value and
cost quantification of logistics decisions
• Assist in evaluation and selection of supply chain software
• Lead team in creating scorecard to evaluate logistics performance

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Chesapeake Logistics has extensive experience in supply chain analysis,
including the following:

• Created and applied financial models for logistics decisions,
including lease vs. buy, private vs. outsource, return on capital
expenditures for logistics assets, and impact of logistics
improvements on balance sheet and income statement

• Led project team to implement balanced scorecard as basis for
linking logistics strategy to performance measurement, using both
financial and non-financial measures

• Identified baseline logistics costs of consumer goods company,
estimating financial benefits of supply chain improvement recommendations

• Restructured financial performance measures for logistics organization,
focusing on investment returns (ROA, ROCE) and economic value added (EVA)

• Designed activity-based costing system to track and evaluate
warehousing and transportation costs

• Participated in reengineering, design, pricing and accounting
of just-in-time delivery program for big 3 automobile manufacturer

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