CSCP Learning System 2024 · Study summary · Logistics performance

Logistics KPIs, Made Practical

What each logistics KPI really tells you, how to calculate it, a worked example from the CSCP, and seven what-if calculators. Every item carries its CSCP source and page.

Source base: APICS/ASCM CSCP Learning System 2024 (v5.2), Modules 2, 4, 5, 6 Scope: CSCP sources only Format: study summary in original wording

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The short version

Six ideas that organize everything below

Service and total cost. Logistics exists to achieve customer satisfaction at the lowest total cost. Service means complete, undamaged, on time, and consistently correct.

One promise, several strictness levels. On-time delivery, OTIF, fill rates, and perfect order measure the same promise with different rules.

Definitions decide the number. The CSCP defines OTIF but sets no tolerance. The same three PO lines score 0% or 100% depending on the rule.

Consistency beats speed. If cycles vary, the customer must carry safety stock, and the variability drives how much.

Everything trades off. Faster mode vs inventory, more warehouses vs inventory, full loads vs inventory, automation fixed vs variable cost.

Few KPIs, across silos. Keep the set small, tie each KPI to strategy, and avoid measures that live in only one function.

US$1.63TUS logistics spend in 2019 (M5 p.22)

≈65%of it went to transportation (M5 p.22)

+6.6%rise in inventory storage cost in 2019, due to limited warehouse capacity (M5 p.22–23)

3% → 1%a 3% rise in perfect orders ≈ a 1% rise in profit, per AMR research (M6 p.151)

8–10% vs 20–30%+return rates for stores vs online retailers (M5 p.478)

How to read this page

Every KPI carries a source label

This page uses CSCP sources only. The CSCP is detailed on service and cost drivers but gives few formulas, so each item shows how far the module goes.

CSCP
Stated in the module. The module and PDF page are shown (M5 = Module 5, and so on).

CSCP·D
Derived. A measurable I built from a CSCP definition or concept. The module does not give that formula; the arithmetic is mine.

CSCP·R
Reconstructed from CSCP text and worked examples because the PDF formula was an image. Verify against the PDF before formal use.

Important: examples and defaultsExamples marked module example or Exhibit come from the CSCP. All other numbers in examples and in the calculators are illustrative placeholders, not benchmarks and not data from any company. Page numbers are PDF page indices in the supplied files, not printed page numbers.

Naming bridge: shop-floor labels vs CSCP terms

Labels such as DIFOT, RIFOT, and PIFOT are common in company reports, but they do not appear in the CSCP modules read. The closest CSCP concepts are:

Common label	Closest CSCP concept	Where
DIFOT / OTIF (delivery in full, on time, to the customer)	On-time in full (OTIF); on-time delivery; Perfect Customer Order Fulfillment (RL.1.1: in full, commit date, documentation, condition)	M6 p.164; M2
RIFOT (receiving in full, on time, from the supplier)	Supplier timeline performance and reliability in the supplier performance report; Perfect Supplier Order Fulfillment (RL.1.2: in full, commit date, documentation, condition)	M6 p.301, 312–313; M2
PIFOT (payment in full, on time)	No direct equivalent found. Nearest: days payables outstanding (AM.2.3)	M2
Fill rate	Customer service ratio; unit, line-item and monetary-value fill rates	M6 p.162–165
Dock-to-stock	Receiving and put-away are defined as activities; no KPI or formula	M5 p.192–193

Framework

What logistics KPIs are for

Logistics must be managed as an integrated effort to achieve customer satisfaction at the lowest total cost, so service and cost are the two halves of its value proposition. CSCP · M5 p.19

Service

Customer orders are complete, undamaged, delivered on time, and consistently correct over time (M5 p.19). Any level of service can be achieved if the company is willing and able to pay for it, so the limit is economics, not technology.

The benefit-cost of a failure depends on how much it matters to the customer: a missing part that shuts a plant may justify air freight, while a late delivery that dips into safety stock is negligible (M5 p.20).

Total cost

Total cost concept: among options with equal service, choose the one that minimizes the total of all logistical costs, and do not decide on a cost reduction in one area such as lower transportation charges alone (M5 p.20–21).

Leading companies use functional cost analysis and activity-based costing to measure the total cost of logistics (M5 p.21).

The eight KPI families in this guide

Family	Question it answers	CSCP anchor
2 · Delivery reliability	Did the promise to the customer, or from the supplier, hold?	M6 p.150–165, 301, 312–316
3 · Speed and consistency	How fast, and how predictable?	M6 p.158–175
4 · Availability	Was the stock there?	M6 p.159, 162–167, 178
5 · Warehouse	Right space, right flow, accurate work?	M5 p.63–147, 191–208; M2
6 · Transport and cost	What does moving goods cost, at what service?	M5 p.149–289
7 · Trade	Can goods cross borders at predictable cost and time?	M5 p.294–445
8 · Reverse	What do returns cost and recover?	M5 p.450–524
9 · Governance	Are partners held to their KPIs?	M5 p.56–60; M6 p.275–303

Six rules for choosing logistics KPIs (from the CSCP)

Tie each KPI to strategy and the value proposition. Link every KPI to a specific strategic objective. The module suggests a small set, around 20 or fewer. CSCP · M4
Judge changes by total cost at equal service. Do not accept a saving in one function that raises cost elsewhere. CSCP · M5 p.21
Weight a failure by what it does to the customer. Error-free service deserves priority where a failure hurts the customer's business most. CSCP · M5 p.20
Avoid single-silo KPIs. Holding cost at one warehouse, or cost of one shipping leg, does not show whether the whole chain benefits. CSCP · M4
Show real numbers, in real time. A 99% can be reported as 9,000 customers getting late orders on one day; executives also want data in real time. CSCP · M6 p.152–153
Pair utilization with inventory. Raising utilization builds inventory unless there is demand for it. CSCP · M4

Where US logistics transport dollars went, 2019

Figures from M5 p.22–25 (2019, United States). Truck plus all other modes (US$680.4B + US$378.8B, computed) is about 65% of the US$1.63 trillion total. The data are US-centric and dated; use them as proportions, not targets.

Delivery reliability

The OTIF family: on time, in full, and everything right

The most basic calculation is full orders delivered complete and on time, which the CSCP calls on-time delivery. CSCP · M6 p.164

Four ideas sit on one spectrum, from loosest to strictest: fill rate (how much of the quantity), on-time delivery (when), OTIF (both together), and perfect order (everything right, including condition and documents).

The supplier-side mirror image is the supplier performance report, which compares ordered and received quantity and due and received date. The CSCP's own example, Exhibit 6-16, makes a good test case below.

Warehouse worker scanning a pallet at a receiving dock beside an open delivery truck — Illustration: the handover where in-full and on-time are checked. Visual generated with Microsoft Copilot.

On-time in full (OTIF)

CSCP · M6 p.164formula: derived

Answers: Of all deliveries, how many arrived complete and by the delivery date?

FormulaCSCP: a delivery scoring system in which a target delivery goal, usually a percentage, is set and the deliverer tries to meet it fully and by the delivery date. Derived: deliveries (orders or lines) both in full and on time ÷ total deliveries.

Example (module data, derived result)Exhibit 6-16 has three PO lines. Judged strictly (exact date, exact quantity), none is both on time and in full: 0 of 3 = 0%. Relax the rule and the same data can read 100% (see the table below).

Watch out: The CSCP gives no tolerance window, no rule for partial deliveries, and no choice between order-level and line-level counting. Decide, write it down, and apply it to every partner.

On-time delivery

CSCP · M6 p.164formula: derived

Answers: What share of receipts reached the customer on time?

FormulaCSCP: a metric measuring the percent of receipts that were received on time by customers. Derived: on-time receipts ÷ total receipts.

Illustrative92 of 100 receipts on time = 92%.

Watch out: The definition of “on time” has to come from the customer (M2). Early delivery also causes problems, such as too many trucks arriving at once (M6 p.172), so decide whether early counts as on time.

Customer service ratio (fill rate)

CSCP · M6 p.162–163

Answers: How much of what was supposed to ship, shipped on schedule?

FormulaMake-to-stock: items or dollars shipped on schedule in a period ÷ the total supposed to ship in that period. Make-to-order: jobs or dollars shipped ÷ jobs or dollars supposed to ship.

Example (module, Exhibit 6-8)A customer requests 100 items and only 92 are available: fill rate 92%.

Watch out: Fill rate measures availability, not timeliness. Pair it with an on-time measure.

Fill-rate variants

CSCP · M6 p.165

Answers: Which unit of count tells the truth?

FormulaUnit fill rate: items delivered ÷ items ordered. Line-item fill rate: line items delivered ÷ line items ordered. Monetary value fill rate: value delivered ÷ value ordered.

Illustrative8 of 10 lines complete = line fill 80%; 940 of 1,000 units = unit fill 94%. The same order scores very differently.

Watch out: Choose by the decision: line fill reflects picking effort, value fill reflects revenue at risk. The CSCP does not say how to treat over-delivery, so cap it or track it separately.

Orders shipped complete and backorders

CSCP · M6 p.159, 178

Answers: Did the whole order go out, and what is still owed?

FormulaOrders shipped complete: all items ordered are present in the shipment. Backorders: unfilled orders or customer commitments. Level-of-service measures: % of orders shipped complete and on time, number of backordered items, average age of backorders, value of backordered items.

Illustrative460 of 500 orders shipped complete = 92%; 40 open backorders with an average age of 6 days.

Watch out: Average age of backorders shows how long the customer waits, which the count alone hides.

Perfect order fulfillment

CSCP · M6 p.150–151formula: CSCP·R, M2

Answers: What share of orders got everything right?

FormulaPerfect orders ÷ total orders. A perfect order meets all seven Rs (right product, quantity, condition, place, time, customer, cost) with complete and accurate documentation. SCOR RL.1.1 builds it from in full, commit date, documentation, and condition.

Illustrative920 perfect of 1,000 orders = 92%. Module: a 3% increase in perfect orders equates to a 1% increase in profits (AMR research).

Watch out: It measures every step from order entry to payment and can be hard to collect when systems or partner integration are weak (M6 p.150–151). Failure rates compound: use calculator 2.

Perfect supplier order (RL.1.2)

CSCP · M2rate: derived

Answers: Did the supplier deliver in full, on the committed date, with the right documents and condition?

FormulaSCOR DS RL.1.2 Perfect Supplier Order Fulfillment, built from four Level 2 measures (RL.2.5 to 2.8): in full, commit date, documentation, condition. Derived rate: supplier orders meeting all four ÷ total supplier orders.

Illustrative88 of 100 inbound orders meet all four = 88%.

Watch out: This is the closest CSCP concept to a receiving-side “RIFOT”; the module does not use that name.

Supplier timeline performance

CSCP · M6 p.301, 312–313measure: derived

Answers: How far off the PO schedule was each receipt, and what is past due?

FormulaCSCP: the system tracks the difference between purchase order schedule and actual receipt dates, and identifies undelivered and past-due items and unauthorized early deliveries. Derived: date variance = date received − date due; % of lines received within the agreed window.

Example (module, Exhibit 6-16)Wheels due 1/5, received 1/7: variance +2 days. Rims and spokes: 0.

Watch out: Early receipts are tracked as well (“unauthorized early deliveries”). A late-only view misses them.

Supplier reliability and quality in the report

CSCP · M6 p.312–313ratios: derived

Answers: Did the right quantity arrive, and was it good?

FormulaThe performance report tags quantity ordered and received as Reliability, quantity rejected as Quality, price variance as Cost, and date variance as Lead time. Derived ratios: received ÷ ordered; rejected ÷ received.

Example (module, Exhibit 6-16)Rims: 248 received of 250 ordered (99.2%), 2 rejected. Spokes: 5,012 of 5,000 (100.2%). Quality rating A−.

Watch out: The exhibit does not say whether 248 is before or after the 2 rejections, so state which basis you use.

Shipment control rules

CSCP · M6 p.314–316KPI: derived

Answers: How many shipments are turned away or arrive incomplete?

FormulaCompliance rules stop a supplier from printing labels or shipping unless the order complies, for example “do not ship unless it is in the most recent PO release”, “do not ship ± days outside of delivery request date”, “do not ship ± amount outside of PO”. Purpose: minimize shipments turned away at the receiving dock or arriving incomplete. Derived KPI: shipments rejected or incomplete ÷ shipments received.

Illustrative6 of 150 shipments rejected or incomplete = 4%.

Watch out: The ± limits are where tolerance is set in practice. The CSCP shows the rule shape but gives no values.

Worked example: the CSCP supplier performance report (Exhibit 6-16)

The module's example shows one purchase order with three lines. The first block is the exhibit as printed (M6 p.312–313); the last two columns are my strict-rule reading.

Product	Qty ordered	Qty received	Qty rejected	Std cost	Purchase price	Price variance	Date due	Date received	Date variance	In full?	On time?
Wheels	250	250	0	60.00	62.00	+2.00	1/5	1/7	+2	Yes	No (+2 d)
Rims	250	248	2	30.00	29.00	−1.00	1/5	1/5	0	No (−2)	Yes
Spokes	5,000	5,012	0	5.00	5.00	0	1/5	1/5	0	No (+12)	Yes

The exhibit tags quantity ordered and received as Reliability, quantity rejected as Quality, cost lines as Cost, and the date lines as Lead time. It also shows a quality rating of A−. It does not say whether 248 received is before or after the 2 rejected.

Same data, five rules, five different answers

Rule applied to the same three lines	Line-level OTIF	Whole PO passes?
Strict: exact date, exact quantity	0 of 3 (0%)	No
Grace: up to 2 days late, quantity within ±1%	3 of 3 (100%)	Yes
Window: ±1 day, quantity within ±2%	2 of 3 (66.7%)	No
Quantity only (timing ignored)	1 of 3 (33.3%)	No
Timing only (quantity ignored)	2 of 3 (66.7%)	No

The lessonThe CSCP defines OTIF but not the tolerance, so the metric is only as good as the rule behind it. The module itself shows where tolerance lives in practice: supplier controls such as “do not ship ± days outside of delivery request date” and “do not ship ± amount outside of PO” (M6 p.314–315). Agree the rule with the partner, publish it, and calculate every period the same way. Calculator 1 lets you change the rule.

Speed and consistency

How long, and how predictable?

Greater value is typically placed on consistency than on speed of service, because consistency directly affects the customer's ability to conduct their activities. CSCP · M6 p.172

If cycles vary, the customer must carry safety stock to protect against late delivery, and the degree of variability directly drives how much (M6 p.172). Early deliveries cause problems too, such as too many trucks arriving at once.

So a supplier that is slower on average but very predictable can cost its customer less inventory than a faster, erratic one. Calculator 3 puts numbers on that.

Order delivery cycle time

CSCP · M6 p.168–170SCOR RS.1.1, M2

Answers: How long from order to a product ready for use?

FormulaSpeed of performance: elapsed time from when the customer places the order until the product is delivered and ready for use. SCOR RS.1.1 is the average of actual cycle times from order receipt to customer acceptance.

IllustrativeThree orders took 4, 6 and 8 days: average 6 days.

Watch out: Process time = cycle time − order fulfillment dwell time (customer-caused waiting) is the preferred responsiveness view (M2, reconstructed). Idle time you cause is not dwell.

Supply chain cycle time

CSCP · M6 p.159–160

Answers: How long would filling an order take if inventory were zero?

FormulaThe sum of the longest lead times for each stage in the supply chain (Exhibit 6-8).

IllustrativeSupplier 20 + production 10 + transport 14 + distribution 3 = 47 days.

Watch out: It is a design-level measure; actual cycle time is shorter when stock is held.

Delivery consistency

CSCP · M6 p.160, 172–173

Answers: How often does the actual cycle match the planned time?

FormulaThe number of times cycles meet the planned amount of time for completion. Measures: variance in lead times; percentage delivered in quoted lead time.

Illustrative85 of 100 orders delivered within the quoted lead time = 85%.

Watch out: The module values consistency over speed: if cycles vary, the customer carries safety stock, and the variability directly drives how much (p.172). Use calculator 3.

Early-delivery exposure

CSCP · M6 p.172measure: derived

Answers: How often does an order arrive earlier than the customer can handle?

FormulaCSCP: early deliveries could cause problems, such as an intermediate customer having too many trucks arriving at the same time or an end customer not being home. Derived: deliveries arriving more than X days before the quoted date ÷ total deliveries.

Illustrative12 of 200 deliveries arrived more than 2 days early = 6%.

Watch out: Early and late are both inconsistency.

Flexibility

CSCP · M6 p.173measure: derived

Answers: Can we handle the unusual request?

FormulaAbility to accommodate unexpected or unusual customer requests: customized sales or marketing initiatives, new product introductions or recalls, supply disruption. No formula in the module; a measurable form is requests accommodated ÷ requests received.

Illustrative18 of 20 special requests met = 90%.

Watch out: The module ties an organization’s logistical strength closely to its flexibility.

Malfunction recovery time

CSCP · M6 p.173–174

Answers: How fast do we recover when something breaks?

FormulaThe average number of days (or hours) from malfunction to recovery. Module example: if a stockout occurs, an alternate facility may provide a replacement.

IllustrativeRecoveries took 6, 18 and 12 hours: average 12 hours.

Watch out: A contingency plan has to exist before recovery can be fast.

Order-status reporting

CSCP · M6 p.174–175

Answers: Can customers see where their order is, and is it right?

FormulaMeasures: functionality supplied versus requested; order status accuracy; percentage downtime of the website or reporting system.

Illustrative97 of 100 status checks matched the physical order = 97% accuracy.

Watch out: For intermediate customers, status should be pulled automatically through APIs, with role-based views.

Response and change-processing times

CSCP · M6 p.169–171

Answers: How quickly do we answer and adapt?

FormulaTime to process a customer-requested change; time to respond to a customer query; average wait time to reach an agent; % of calls that meet a busy signal; % of calls abandoned.

IllustrativeA change request took 5 working hours: 5 h.

Watch out: These are customer-service speed measures that sit next to the logistics delivery metrics.

Availability and customer view

Was the stock there, and what does the customer feel?

The goal of availability measures is a high level of availability while keeping the investment in inventory and facilities to a minimum. CSCP · M6 p.162

Stockout frequency

CSCP · M6 p.166–167

Answers: How often, how big, and for how long is an item unavailable?

FormulaPercentage of items in stockout; monetary value of items ordered that are in stockout; average age of stockout; average time to recover an item from stockout.

Illustrative40 of 2,000 active items out of stock = 2%; average age 3 days.

Watch out: Weight by value and criticality, not only by item count.

The customer-focused metric set (Exhibit 6-8)

CSCP · M6 p.158–161

Answers: Which customer attributes does the CSCP measure?

FormulaAvailability: stockout frequency, fill rate, orders shipped complete, backorders. Time: speed of performance, supply chain cycle time, delivery consistency, flexibility, malfunction recovery. Product support: response time, response accuracy, customer complaints. Overall satisfaction: repeat purchases, referrals.

What the module saysThe exhibit lists definitions; its fourth table column is blank in the supplied file.

Watch out: Complaints are a weak proxy for satisfaction: a study cited in the module found manufacturers of large-ticket goods hear less than 5% of unhappy customers’ complaints (p.180).

Real numbers and real time

CSCP · M6 p.152–153

Answers: How do we stop a 99% from sounding fine?

FormulaShow the number of customers affected, not only the aggregate, and show data in real time or as near to it as possible.

Example (module)The module: 99% can be reported as 9,000 customers getting late orders on a particular day.

Watch out: This is how the module says to reduce complacency.

Does a perfect score mean a satisfied customer?

CSCP · M6 p.179–181

Answers: Do delivery KPIs measure satisfaction?

FormulaSCOR customer-facing metrics measure the absence of issues; even perfect scores cannot guarantee satisfaction. Satisfaction depends on how expectations are set and met (“under-promise and over-deliver”).

What the module saysMethods listed: voice of the customer, transaction questionnaires, periodic questionnaires, participation in performance reviews, and online comments.

Watch out: Internal data shows performance; the customer’s own evaluation shows satisfaction.

Warehouse and materials handling

Space, flow, accuracy, and automation

Warehousing can contribute to logistical goals by responding rapidly to change, minimizing service variance, minimizing inventory, consolidating movement, improving quality continuously, and supporting returns. CSCP · M5 p.63–65

Distribution center packing area with a roller conveyor and barcode scanner gantry — Illustration: scanning and packing flow. Visual generated with Microsoft Copilot.

Warehouse KPIs in the CSCP fall into three groups: how big and how full (capacity and utilization), how well the work is done (accuracy, damage, productivity), and how the building is used to cut cost (consolidation, cross-docking, automation).

The CSCP defines the warehouse activities and gives the capacity method, but gives formulas for few operating KPIs; derived measures are labeled.

Warehouse capacity requirement

CSCP · M5 p.94–101

Answers: How much floor space must the warehouse have for the next three to five years?

FormulaPeak-year average inventory volume ÷ pallet volume × partial-pallet factor × floor area per pallet × movement factor ÷ storage levels ÷ target utilization.

Example (module)18,000 m³ → 10,000 bays → 11,000 bays → 13,200 m² → 39,600 m² → 9,900 m² → 12,375 m² at 80% target utilization.

Watch out: The factors (1.1, 3, 4 levels, 80%) are example values; derive them from existing sites with similar equipment. Fixed-location storage needs maximum, not average, inventory (p.94–95, 101).

Target utilization

CSCP · M5 p.101

Answers: How full should the warehouse be on forecast?

FormulaA divisor in the capacity calculation that builds in excess capacity: at 80%, the warehouse is only 80% full under current forecasts. Set by organizational policy based on strategic and risk analyses.

Example (module)9,900 m² ÷ 0.8 = 12,375 m².

Watch out: A higher target means less spare room. The CSCP gives no benchmark for the target.

Cube utilization and accessibility

CSCP · M5 p.87–88measure: derived

Answers: Are we using the building’s volume without blocking access?

FormulaCube utilization is the use of cubic space, increased by vertical racking up to the equipment or building height limit. Accessibility: the ideal is 100%, meaning all inventory can be reached without first moving other inventory. A velocity analysis optimizes flow. No formulas are given; a measurable accessibility form is pallets reachable without moving another ÷ pallets stored.

IllustrativeIllustrative: 920 of 1,000 pallets reachable directly = 92% accessibility.

Watch out: Filling a building with single selective racks may maximize storage but congest workflow and hurt throughput.

Random vs fixed location

CSCP · M5 p.90–91, 94–95

Answers: Which storage method are we sizing for?

FormulaRandom-location storage sizes to average (mode) inventory and often needs less space; fixed-location storage needs the sum of every item’s maximum space and often leaves much unused space.

What the module saysThe module notes fixed locations are often used for slow-moving items such as spare parts.

Watch out: The location method changes the space answer more than most other factors.

Receiving, put-away, picking, shipping

CSCP · M5 p.192–196measures: derived

Answers: How accurate and fast are the core warehouse activities?

FormulaReceiving: physical receipt and inspection against the PO (quantity and damage). Put-away: move from the dock, stage, record the location. Order picking: select the required quantity and document the move. Shipping: packaging, marking, weighing, loading. Derived measures: receipt discrepancy vs PO, put-away time and location accuracy, pick accuracy, shipping accuracy.

Illustrative9,850 correct of 10,000 pick lines = 98.5%.

Watch out: The CSCP defines the activities but gives no KPI formulas for them; inspection during receiving is not considered value-added (p.191).

Accuracy, damage and labor productivity

CSCP · M2

Answers: How often is work right the first time, and how productive is labor?

FormulaAccuracy = times done correctly ÷ total times done. Also tracked: damage frequency (total or by area), document and invoice accuracy, labor productivity by area, units shipped per employee, units shipped per labor dollar, equipment downtime.

Illustrative12,000 units shipped ÷ 20 employees = 600 per employee.

Watch out: Damage by area is hard to tabulate because it is often reported only when goods reach the customer.

Consolidation, cross-dock and break-bulk

CSCP · M5 p.199–203measures: derived

Answers: Are we using the warehouse to cut transport and handling cost?

FormulaConsolidation: combine materials from several plants into full container or truckload shipments to qualify for discounts and ease dock congestion. Cross-docking: move goods from inbound to outbound without storing them, avoiding put-away and picking. Derived: share of outbound volume in full loads; share of volume cross-docked.

Illustrative70 of 100 outbound shipments go as full loads = 70%.

Watch out: Consolidation may require sorting or assembly capability, training and remodeling (p.199–200).

Contract-warehouse comparison

CSCP · M5 p.56, 73

Answers: Is the contract warehouse performing as well as our own?

FormulaCompare on fill rates, units shipped per hour, and rate of on-time deliveries.

IllustrativeOwn site: 96% fill / 55 units per hour / 94% on time; contract site: 97% / 62 / 95%.

Watch out: Know current costs first: there is no point in paying more than they are unless the arrangement provides other benefits (p.56).

Automation economics

CSCP · M5 p.136, 141–142, 145

Answers: Does automation pay back at our volume?

FormulaAutomation raises fixed cost and lowers variable cost: higher profit when volume covers the fixed expense, higher losses when volume is too low. Reported examples: robot systems held 50% more inventory per square foot, cut operating cost 20%, and cut click-to-ship from 60–75 minutes to 15; AS/RS machines move 300–400 ft/min horizontally and 100 ft/min vertically; sorters handle up to one package per second.

Example (module)Module example: robot systems cost about US$15–20 million per warehouse.

Watch out: Poor equipment selection adds expense without value if it cannot be used effectively in the available space (p.104).

The capacity method in seven steps (module example)

#	Step	Calculation (module example)	Result
1	Peak-year average inventory volume	Highest forecast year of a five-year plan	18,000 m³
2	Convert to pallet bays	18,000 ÷ 1.8 m³ per pallet (1.2 × 1.0 × 1.5 m)	10,000 bays
3	Partial-pallet factor	10,000 × 1.1	11,000 bays
4	Raw floor footprint	11,000 × 1.2 m² per pallet	13,200 m²
5	Movement and handling space	13,200 × 3 (typically at least three)	39,600 m²
6	Vertical storage levels	39,600 ÷ 4 levels	9,900 m²
7	Target utilization	9,900 ÷ 0.8	12,375 m²

M5 p.94–101. The module says to derive the movement and partial-pallet factors from analyzing existing warehouses with similar equipment, and to set target utilization by policy from strategic and risk analyses. Divided across several distribution centers, the total is larger because each needs its own handling areas (p.101–102).

Adding warehouses: what moves in which direction

Effect of adding warehouses	Direction	CSCP detail (M5 p.76–80)
Customer service	Improves	Goods placed closer to more customers; the trend is to optimize the number rather than add freely
Outbound transport cost	Can fall	Shorter distances, but a centralized system can consolidate into full loads that qualify for lower rates
Inbound transport cost	Can rise	Deliveries by partly full payloads
Total inventory	Rises	More floor space relative to storage space; less safety stock per site, but aggregate safety stock goes up
Setup and overhead	Rises	Construction or renovation, duplicated equipment and labor, more chance of adding inefficient sites

Total cost tends to decline as warehouses are added, but only up to a point; after that the cost per added warehouse rises (M5 p.80). Exhibit 5-4, which graphs this, is an image in the supplied file.

Transport and cost

What moving goods costs, and what it trades against

Transportation costs trade against inventory costs: Just-in-Time delivery emphasizes lower inventory, and shipping more frequently may raise transportation cost. CSCP · M5 p.151

The primary objective of transportation is product movement; a secondary objective is temporary storage of in-transit inventory (M5 p.150). Inventory in transit is not available for production or for sale, so time matters, but speed is not free.

Because transport is the largest slice of logistics spend, most logistics cost KPIs end up here: cost drivers, load use, transit time, charges for holding vehicles, and fuel.

Aerial view of an intermodal terminal with a container ship, trucks and a freight train — Illustration: ship, truck, and rail meeting at a terminal. Visual generated with Microsoft Copilot.

Total logistics cost

CSCP · M5 p.20–21CO.1.1 form: CSCP·R, M2

Answers: Is a cost cut in one function really a saving?

FormulaTotal cost concept: among options with equal service, choose the one that minimizes the total of all logistical costs. SCOR CO.1.1 total supply chain management cost % = (ordering + acquisition + inventory carrying + supply chain finance/planning + IT cost) ÷ product revenue.

IllustrativeLogistics cost of 8.2 on revenue of 100 = 8.2%.

Watch out: Judge any change against total cost at equal service, not against the budget of one function.

Line-haul cost drivers

CSCP · M5 p.152–155

Answers: What makes up the cost of moving a load?

FormulaLine-haul cost is the basic carrier cost to move a container of freight, varying with cost per mile, distance, and weight. Components: vehicle costs, driver or operator costs, vehicle operating costs, general and administrative costs, insurance and security costs.

Example (module, p.154)Slowing a cargo ship from 27 to 18 knots saves 59% of fuel (more than US$2 million one way) at the cost of an extra week in transit.

Watch out: Faster modes are expensive, and transport cost trades against inventory cost (p.151).

Cost per ton-mile and economies of scale

CSCP · M5 p.164–166ratio: derived

Answers: How does cost per unit of freight move with distance, load and density?

FormulaDistance: longer trips include a greater share of cheaper miles. Volume: fixed costs spread over more units, so a full load beats a partial one. Density: low-density freight costs more per unit of weight. Derived KPI: transport cost ÷ (tonnes × distance).

IllustrativeUS$12,000 ÷ (20 t × 800 km) = US$0.75 per tonne-km.

Watch out: Weight limits cap the benefit of density: dense liquids reach the weight limit before the volume is full.

Payload use and empty return

CSCP · M5 p.165, 184KPI: derived

Answers: How full do vehicles run, and how many return empty?

FormulaA full load is more cost-effective than a partial one, so consolidate small loads. Backhauls planned in time reduce deadheading (empty return trips). Derived: loaded weight or volume ÷ capacity; empty kilometres ÷ total kilometres.

Illustrative15 t on a 20 t truck = 75% load factor.

Watch out: If you do not consolidate, the carrier may do it by adding stops, and someone pays for those side trips (p.165).

Transit time and in-transit inventory

CSCP · M5 p.150–151; M4formula: CSCP·R

Answers: How much stock is on the move and unavailable?

FormulaInventory in transit is not available for production or sale. Average in-transit inventory is a function of transit time in days and annual demand (M4): annual demand × transit days ÷ 365.

Illustrative36,500 units a year × 30 days ÷ 365 = 3,000 units in transit at any time.

Watch out: Counting only in-stock inventory can omit a significant share of the total (M4). Use calculator 4.

Demurrage and detention

CSCP · M5 p.159exposure: derived

Answers: What do we pay when a vehicle is held too long?

FormulaCarrier charges added when land or water vehicles are retained beyond a specified loading or unloading time: demurrage for rail freight cars and ships, detention for truck trailers. Derived exposure: (dwell days − free days, not below zero) × units × daily rate.

Illustrative100 units × (12 − 7 free) days × US$100 = US$50,000.

Watch out: The CSCP gives no rates or free-time rules; they come from the contract. Use calculator 5.

Fuel efficiency

CSCP · M5 p.235–236, 254

Answers: How much freight does a gallon of fuel move?

FormulaTon-miles per gallon: how many miles one ton of freight moves on one gallon of fuel. Module values: inland barge 647, rail 477, truck 145; US rail averaged 480 in 2021 against 235 in 1980.

ReferenceSee the chart below.

Watch out: The figures are US-based and dated; the module’s own fuel and CO₂ comparisons come from different sources.

Emissions per ton-mile

CSCP · M5 p.254–255, 156–158

Answers: What does the move cost the environment?

FormulaCompared with one barge, rail releases 43% more grams of CO₂ per ton-mile and trucks 800% more (module, citing a barge-industry source). Moving freight by rail rather than truck reduces greenhouse gas emissions by 75% (p.236).

What the module saysEmission rules create compliance KPIs too: EU low emission zones restrict higher-emission heavy trucks, and drivers must know the vehicle’s Euro standard.

Watch out: The 75% (rail vs truck) and +43% (rail vs barge) figures come from different sources; treat them as indications.

Transport capacity forecast quality

CSCP · M5 p.179–185measure: derived

Answers: Are we booking capacity ahead or buying on the spot market?

FormulaTraditional forecasts use actual orders, leaving little time to plan. Better forecasts link to demand forecasts, promotions, manufacturing decisions and product requirements, by lane and mode. Benefits: the spot market is rarely used, several weeks’ notice, carrier procurement detached from order creation, easier intermodal, planned backhauls. Derived: spot-market spend ÷ total transport spend.

Illustrative8% of freight spend on spot rates.

Watch out: A good forecast is broken down by transportation lane as well as by mode.

Freight claims

CSCP · M6 p.316–317ratio: derived

Answers: How often is cargo lost or damaged in transit?

FormulaA freight claim is a form submitted to the carrier requesting reimbursement for loss or damage: visible damage, shortages, concealed damage, and losses due to delays. Not claimable: natural disasters, acts of war, government seizure, failure to package appropriately, perishability. Derived: claim value ÷ freight value shipped.

IllustrativeUS$18,000 of claims ÷ US$2,400,000 shipped = 0.75%.

Watch out: The contract and bill of lading set the time limit to file; Incoterms or domestic terms say who files.

How far one gallon moves one ton

Mode comparison, as the CSCP describes it

Mode	Strengths	Limits	CSCP figures (US-centric)
Rail	Heavy, low-value freight over long distances; fuel-efficient; little weather disruption	Slow; fixed right of way; more damage to fragile cargo	Rate about one-tenth of truck per ton-mile; damage about 3% of tonnage; 480 ton-miles per gallon (2021) (p.235–241)
Motor	Accessibility to almost any location; faster than rail or water; relatively low fixed cost	High variable cost; labor-intensive; driver shortages	Truckload over 15,000 lb; less-than-truckload under 10,000 lb at the start (p.246–252)
Water	Huge loads, lowest cost for high-bulk, low-value goods; fuel-efficient	Limited access; slow; locks and port problems	Under one cent per ton-mile; barge 1,500 t vs truck 7 t (p.253–254)
Pipeline	Continuous, low variable cost, almost no damage	Liquids only; highest fixed cost; limited access; stops without power or IT	About 305,000 miles of US pipelines (p.262–265)
Air	Fastest; low loss and damage; allows cutting safety stock and warehouses	Highest rate; limited access; weather	About three times road and more than 30 times rail per ton-mile (p.267–270)
Intermodal	Combines modes; the container gives the most flexibility	Handoffs and port issues	Rail intermodal was 25% of major US railroad revenue in 2020 (p.242)

Choosing the mode: value density vs packaging densityItems with a higher value density usually merit a faster method; items with lower value density can be sent more slowly and held in inventory. The more units handled per cubic foot or meter, the more the need for automated handling (M5 p.233–234). Exhibit 5-22, which plots the two, is an image in the supplied file. Calculator 4 shows the trade-off in numbers.

Trade-offs the CSCP names

Trade-off	One side	Other side	Source
Lot size vs inventory	Large lots improve process control and cut setup cost	High inventory and storage expense	M5 p.175
Inventory vs transport cost	Full payloads cut cost per item	Stock takes longer to deplete, raising storage cost	M5 p.176
Lead time vs transport cost	Holding for full loads cuts shipping cost	Shipping early as produced cuts lead time	M5 p.177
Product variety vs inventory	More variety	Higher total inventory and higher transport and warehousing cost	M5 p.178

Trade and compliance

Crossing borders at predictable cost and time

Failure to comply with security and other regulations can mean costs and delays, significant fines, or even complete shutdown of business activity. CSCP · M5 p.294

Duty and VAT

CSCP · M5 p.423–424VAT arithmetic: derived

Answers: What do we pay at the border?

FormulaImport duty = tariff rate × CIF or FOB value (basis varies by country). VAT = rate × (value + duty).

Example (module + computed)5% on €1,000,000 gives duty €50,000 (module). VAT at 20% (UK standard rate in 2021) = 20% × €1,050,000 = €210,000 (computed).

Watch out: Rules are country-specific; US duty is based on the total purchased value paid abroad, not weight, size or quality.

Who pays what (Incoterms 2020)

CSCP · M5 p.328–331, 362–363

Answers: Where do cost and risk shift between seller and buyer?

FormulaIncoterms show where risk and cost transfer, not title or ownership. Exhibit 5-24 shows who bears export packing, export clearance, inland transport, forwarder fees, loading, main carriage, insurance, duties and delivery. Specify the version, the term, and the named place.

Example (module)“CIF Los Angeles, Incoterms 2020”: the seller pays cost, insurance and freight to the Port of Los Angeles.

Watch out: Incoterms do not oblige either party to insure except where noted; state who insures.

Customs clearance risk

CSCP · M5 p.305, 320–326measures: derived

Answers: How predictable is clearance?

FormulaCustoms checks value, markings, forbidden items, quotas, invoices and dumping. Risks: delays, missing or incorrect documents, translation delays, classification disputes. Mitigation: electronic preclearance, a licensed customs house broker starting before arrival, electronic documents. Derived KPIs: clearance time; % of shipments with document errors.

Illustrative3 of 120 shipments held for document errors = 2.5%.

Watch out: The importer of record is responsible in the end; inexperienced forwarders have guessed at codes and caused problems (p.325–326).

Compliance gap analysis

CSCP · M5 p.297–300rate: derived

Answers: How far are we from the rules we must and choose to follow?

FormulaMandatory items: existing compliance level versus the minimum baseline, with a list of gaps. Voluntary items: actual versus desired targets, with a list of gaps. Then project plans for mandatory gaps and feasibility studies for voluntary ones.

Illustrative4 of 36 mandatory items below baseline = 11% gap rate.

Watch out: Separate mandatory from voluntary first, and do a benefit-cost analysis for voluntary items.

Free trade zone benefits

CSCP · M5 p.426–434

Answers: Can a zone defer, avoid or cut customs cost?

FormulaBenefits listed: exemption from customs formalities, duties or quotas; no duty on reexports; deferral of duties and federal excise taxes; avoiding fines by fixing compliance before customs; inspecting before paying duty; avoiding quota problems; indefinite storage without local inventory taxes; avoiding inverted duties. Retail trade is forbidden in a zone.

What the module saysValue of deferral (derived): duty × cost of capital × months ÷ 12 (calculator 6).

Watch out: The host country receives reduced duty revenue, which is the drawback of a zone.

Security partnerships (C-TPAT)

CSCP · M5 p.300–304

Answers: Is certification paying off?

FormulaCosts: implementation, audits, compliance actions. Benefits: fewer inspections (not guaranteed), an account manager, the member list, account-based payments, a positive risk-assessment factor, and less duplication under mutual recognition.

What the module saysA freight forwarder may participate while the manufacturer does not (module).

Watch out: The program’s legal language says membership will not speed clearance or avoid searches (p.303).

Supplier labor-practice indicators

CSCP · M5 p.311–313rates: derived

Answers: Do our suppliers meet labor standards?

FormulaIndicators: proportion of local suppliers; whether suppliers are screened for labor practices; proportion of suppliers with negative labor incidents; whether supplier labor ethics policies exist and are enforced, including contract terminations.

Illustrative2 of 40 audited suppliers had a labor incident = 5%.

Watch out: An organization may have less legal liability but can face significant reputation damage (p.310).

Who pays what: Incoterms 2020 (Exhibit 5-24)

Cost or task	EXW	FCA	CPT	CIP	DPU	DAP	DDP	FAS	FOB	CFR	CIF
Export packing	S	S	S	S	S	S	S	S	S	S	S
Export clearance	B	S	S	S	S	S	S	S	S	S	S
Inland transport (domestic)	B	B/S	S	S	S	S	S	S	S	S	S
Forwarder's fees	B	B	S	S	S	S	S	B	B	S	S
Loading on vessel	B	B	S	S	S	S	S	B	S	S	S
Ocean / air freight	B	B	S	S	S	S	S	B	B	S	S
Cargo insurance	*	*	*	S	*	*	*	*	*	*	S
Duties, taxes, customs clearance	B	B	B	B	B	B	S	B	B	B	B
Delivery to destination	B	B	B	B	B	B	S	B	B	B	B

S = seller, B = buyer, as printed in M5 p.362–363. *Incoterms 2020 recommend stating explicitly who pays for insurance; the terms show where risk transfers but do not oblige either party to insure except where noted. FOB, FAS, CFR and CIF are for sea and inland waterway transport only.

Reverse logistics

What returns cost, and what they recover

Reverse logistics is often a required cost of doing business, and if it is only an expensive afterthought it can drain profitability; handled strategically, some activities can generate revenue to offset the cost. CSCP · M5 p.453–454

Warehouse workers sorting returned goods into separate cages for restock, refurbish and recycle — Illustration: sorting returns by disposition. Visual generated with Microsoft Copilot.

Return rate

CSCP · M5 p.453, 478, 488

Answers: What share of sales comes back?

FormulaReturns ÷ units (or revenue) sold. Module: brick-and-mortar retailers 8–10%; online retailers 20–30% or more; some online businesses up to 50%. Dell reached 5% by routing returns through live customer-service “gatekeepers”.

Illustrative8,000 returned of 100,000 sold = 8%.

Watch out: A return is a reduction in sales revenue (p.478). Return policies should match strategy.

Total cost of reverse logistics

CSCP · M5 p.464–466

Answers: Do returns make or lose money?

FormulaSum the various revenues and deduct the various expenses, tracked for benchmarking and for make-versus-buy comparison (the formula is an image in the supplied file). Costs include return labels, restocking and repackaging, warranty repairs, spare parts, special handling, freight for low-volume sporadic shipments, and extra warehousing.

ReferenceSee calculator 7 for an illustrative result.

Watch out: Only a small percentage of returned items may be easily restocked or resold (p.464).

Recovery and disposition

CSCP · M5 p.452, 503–514shares: derived

Answers: Where does each returned item end up?

FormulaDispositions: resale, remanufacturing, recycling, donation, disposal. Waste hierarchy: reduce, reuse, recycle, recover energy, then responsible landfill. Derived: % of returned units by disposition.

Illustrative40% restocked, 30% refurbished, 20% recycled, 10% disposed.

Watch out: Value falls the longer processing takes, especially for electronics (p.479).

Returns tracking

CSCP · M5 p.455–457

Answers: Can we see each item from return to final disposition?

FormulaTrack the status of each product from entry into the reverse flow to final disposition, with the costs or revenues accumulated at each step, the reason for the return, and warranty status. Unique product and sometimes subcomponent identifiers are needed.

What the module saysReasons listed: defective, unsatisfactory, incorrect order, unsold or excess inventory, repairs or refurbishment, remanufacture, regulatory recycling or disposal.

Watch out: Legacy systems cannot track returns effectively; cloud-based systems link product identifiers to the point of return.

Return forecasting

CSCP · M5 p.457, 493, 495–496

Answers: How many returns should we plan for?

FormulaProduct returns require reverse forecasting. Long-term return forecasts set the number and location of return facilities and dedicated staff.

What the module saysThe reverse logistics cycle curve starts later and is smaller than the forward product life cycle curve (Exhibit 5-30).

Watch out: Early returns spike after a launch, so service and replacement stock must be ready.

Waste sources: the 40/30/30 rule

CSCP · M5 p.503, 507–508

Answers: Where does waste really come from?

FormulaThe 40/30/30 rule: sources of scrap, rework and waste are 40% product design, 30% manufacturing processing, 30% supplier inefficiencies.

Illustrative1,000 tonnes of waste → 400 design, 300 process, 300 supplier.

Watch out: It is a rule of thumb; it shows the leverage of up-front design work.

Hazardous-waste compliance records

CSCP · M5 p.517–519

Answers: Can we prove where hazardous waste went?

FormulaKeep careful records of the categories processed and a chain of custody proving proper processing; proof of delivery must be reported and archived.

What the module saysDisposal options include supervised on-site incineration or transport to a permitted site.

Watch out: Methods differ by material: consider whether the waste is explosive, corrosive, or forms a toxic cloud.

Governance

Holding partners to their KPIs

From a monitoring and controlling standpoint, it is important to carefully select the performance metrics used to assess the relationship, and they need to address strategic priorities such as level of customer service. CSCP · M5 p.59

Logistics contract KPIs (3PL and 4PL)

CSCP · M5 p.58–60

Answers: How do we hold a provider to account?

FormulaSelect performance metrics carefully so they address strategic priorities such as level of customer service. Include remedies (a process for correcting variances from performance targets), confidentiality, subcontractor and escape clauses; specify what each party does so the first 6–12 months go smoothly; promote regular two-way communication.

What the module saysClauses named: confidentiality, subcontractor, remedies (with arbitration rather than court), and escape clauses (p.59–60).

Watch out: Many 3PL and 4PL relationships have poor start-up periods that can make the relationship fail or falter.

Supplier performance measurement

CSCP · M6 p.275–281

Answers: What do we measure on suppliers?

FormulaA small number of critical data elements: delivery, reliability, quality, technology, and cost reductions. Track all suppliers to some extent, focusing on critical suppliers or those with prior quality issues; automate and standardize the measurement.

What the module saysThe same measures are often used to select and rate suppliers, and SCOR metrics can judge individual supplier performance (p.278, 281).

Watch out: The sophistication of measurement should match the dependence on the supplier and the complexity of the interaction.

Supplier rating system and standards

CSCP · M6 p.298–301index formula: CSCP·R, M2

Answers: How do we turn performance into a rating?

FormulaSet measures and standards (target values). Inputs include conformance rates, floor failure events, conditionally accepted material, and timeline performance. The performance index is the relationship of nonconforming costs to purchased costs; reconstructed as (purchase cost + nonconformance cost) ÷ purchase cost.

IllustrativeNonconformance of US$5,000 on purchases of US$100,000 gives an index of 1.05: the true price is 5% above invoice.

Watch out: Raise the standard as suppliers improve, to keep it achievable but challenging (p.298–299).

Scorecards, alerts and surveys

CSCP · M6 p.301–303

Answers: How do suppliers see their rating?

FormulaScorecards (quantitative and qualitative; historical, current and predictive) sent to strategic suppliers at least quarterly, with a written corrective action plan for deficiencies; automated real-time performance alerts; standardized surveys.

What the module saysExhibit 6-16 is the module’s example of a supplier performance report (p.303).

Watch out: Share ratings and standards with suppliers; rating systems are active controls, not only history.

Supplier certification

CSCP · M6 p.282–298

Answers: Who qualifies as a certified supplier?

FormulaAn extensive on-site evaluation against agreed performance levels in areas such as on-time delivery, quality, price reductions and responsiveness. For custom standards, certified suppliers are typically in the top 5 to 10% of performance and stand out in all areas. Reevaluate periodically, with a path to decertify or place on probation.

What the module saysCertification can precede selection for a strategic relationship, follow selection, or recur periodically (p.283–284).

Watch out: It can be a long process, but the rewards include improved quality, better customer satisfaction, and fewer returns or rejects (p.298).

What-if lab

Change a rule or a number, and watch the KPI move

Seven calculators run in your browser. Nothing is sent or stored. Each starts with example values so you can see how it behaves; replace them with your own.

Two logistics analysts reviewing wall screens with charts and a shipping network map — Illustration: analysts testing scenarios. Visual generated with Microsoft Copilot.

1 · OTIF with your own tolerance rules

Enter PO lines, then set the rule. A line is in full when received quantity is within the tolerance, on time when the date variance (received − due) is within the window. Preloaded with the CSCP Exhibit 6-16 lines (dates as day of month). CSCP·D

Item	Ordered	Received	Due day	Received day

The rule

Early allowed (days) Late allowed (days) Shortage allowed (%) Over-delivery allowed (%)

—Line-level OTIF

—Whole PO passes?

—On-time lines

—In-full lines

Line	Ordered	Received	Qty variance	Date variance	In full	On time	OTIF

Same data under five rules

Rule	Line-level OTIF	Whole PO

2 · Perfect order: how small failure rates compound

A perfect order needs everything right, so the rate is roughly the product of the component rates when failures are independent (the CSCP says only an order that gets everything right counts). Simplified to five components. CSCP·D

Orders per day

Component	Today (%)	Scenario (%)
Complete (in full)
On time
Undamaged (condition)
Documentation accurate
Right product, place, customer

—Perfect-order rate today

—Perfect-order rate in scenario

—Orders per day not perfect (scenario)

Measure	Today	Scenario	Change

3 · Consistency vs speed: lead-time variability and customer inventory

The customer needs protection against late delivery: reorder point = demand during the average lead time + z × daily demand × lead-time standard deviation. The z-based form is reconstructed from Module 4; the lead-time-variability version is derived. Assumes normally distributed lead time and steady demand. CSCP·R CSCP·D

Average daily demand (units) Service level “Early” window (days)earlier than quoted by more than this

Option A: faster, erratic

Quoted lead time (days) Average actual (days) Standard deviation (days)

Option B: slower, consistent

Quoted lead time (days) Average actual (days) Standard deviation (days)

—Reorder point A (units)

—Reorder point B (units)

—Lower reorder point with the better option

Measure	Option A	Option B

4 · Mode choice: freight plus the carrying cost of stock on the move

CSCP: inventory in transit is not available for use or sale, and average in-transit inventory depends on transit days and annual demand (M4); carrying cost is typically 15–40% of inventory value per year (M4). Total = freight + carrying cost of in-transit stock and any extra protective stock the mode requires. CSCP·R CSCP·D

Annual demand (units) Unit valuecarrying cost is charged on this Carrying cost rate (%)CSCP range 15–40; 25 is a placeholder

Mode	Freight per unit	Transit days	Extra protective stock (units)

—Lowest total cost

—Next-best option costs more by

Mode	Freight	In-transit units	Carrying cost	Total	Per unit

All freight rates, transit days and extra stock levels are placeholders. Raise the unit value and faster modes gain; lower it and slow, cheap modes gain, which is the value-density logic of M5 p.234.

5 · Demurrage and detention exposure

CSCP: carrier charges are added when land or water vehicles are retained beyond a specified loading or unloading time: demurrage for rail freight cars and ships, detention for truck trailers (M5 p.159). The CSCP gives no rates or free-time rules, so those are placeholders. Exposure = (dwell − free days, not below zero) × units × daily rate. CSCP·D

Free time (days) Daily charge per unitplaceholder

Group	Units	Dwell days
Group 1
Group 2
Group 3
Group 4

Scenario

Cut dwell by (days, every group) Free time in scenario (days)e.g. negotiated longer free time

—Charges today

—Charges in scenario

—Change

Measure	Today	Scenario	Change

6 · Import duty and VAT at the border

CSCP: duty is a percentage of the CIF or FOB value (basis varies by country); VAT is assessed on that value plus the duty (M5 p.423–424). Module example: 5% on €1,000,000 gives €50,000 duty. VAT of 20% is the UK standard rate quoted for 2021. Free trade zones defer duties (M5 p.431). CSCP · M5 VAT arithmetic CSCP·D

Customs value (CIF or FOB) Duty rate (%) VAT rate (%)

Scenario

Duty rate in scenario (%)e.g. preferential rate Customs value in scenario Months of duty deferrale.g. held in a free trade zone Cost of capital (%)placeholder

—Duty today

—Duty + VAT today

—Financing value of deferring today's duty

Measure	Today	Scenario	Change

VAT is often recoverable in the importer's books; the CSCP does not address this, so the total shown is cash payable at the border, not landed cost.

7 · Returns economics

CSCP: a return is a reduction in sales revenue; processing is typically more expensive than forward logistics; only a small percentage of returns may be easily restocked; total cost is revenues less expenses (M5 p.464–466, 478). Return rates quoted: 8–10% for stores, 20–30% or more online; Dell reached 5% with live-agent gatekeeping (M5 p.478, 488). All other inputs are placeholders. CSCP·D

Units sold per period Average selling price Return rate (%) Restocked as new (% of returns) Refurbished and resold (% of returns) Resale price (% of new price) Handling cost per return Transport cost per return Salvage value per scrapped unit

Scenario

Return rate in scenario (%)e.g. a gatekeeper policy Restocked as new in scenario (%)

—Net cost of returns today

—Net cost in scenario

—Scenario net cost, % of gross sales

Measure	Today	Scenario	Change

Net cost = refunds − value recovered (restock, resale, salvage) + handling and transport cost. Units not restocked or refurbished are treated as scrapped.

Reference figures

Numbers you can quote, and where they come from

Only a few numeric reference points appear in the CSCP, and many are US-based and dated. Use them to calibrate against your own history, not as targets.

Figure	Value	Source and caveat
Perfect orders and profit	3% increase in perfect orders ≈ 1% increase in profits	CSCP · M6 p.151 AMR research; base not specified
Late orders in real numbers	99% can mean 9,000 customers with late orders on one day	CSCP · M6 p.153 illustration of reporting practice
Complaints as a satisfaction proxy	Manufacturers of large-ticket goods hear less than 5% of unhappy customers' complaints	CSCP · M6 p.180 one study
US logistics spend, 2019	US$1.63T; transport ≈ 65%; storage cost +6.6%	CSCP · M5 p.22–25 US, dated
Return rates	Stores 8–10%; online 20–30%+; some online up to 50%; Dell 5%	CSCP · M5 p.453, 478, 488
Value of easy returns	Loyalty worth 5 to 20 times the initial sales price	CSCP · M5 p.480 one study cited
Fuel efficiency	Barge 647, rail 477, truck 145 ton-miles per gallon; rail 480 in 2021 vs 235 in 1980	CSCP · M5 p.235–236, 254 US
Relative cost per ton-mile	Rail ≈ one-tenth of truck; air ≈ 3× road and >30× rail; water < 1 cent	CSCP · M5 p.241, 254, 270 approximations
Ship speed vs fuel	27 to 18 knots saves 59% fuel (> US$2M one way) for one extra week in transit	CSCP · M5 p.154 one engine maker's calculation
Robotics example	50% more inventory per sq ft; operating cost −20%; click-to-ship 15 min vs 60–75 min; cost US$15–20M per warehouse	CSCP · M5 p.141–142 one company, reported
Automation speeds	AS/RS 300–400 ft/min horizontal, 100 ft/min vertical; sorters up to one package per second	CSCP · M5 p.139, 145
Warehouse capacity example	12,375 m² at 80% target utilization (factors 1.1, 3, 4 levels)	CSCP · M5 p.98–101 example values, not benchmarks
Duty example	5% on €1,000,000 = €50,000	CSCP · M5 p.423–424 VAT 20% = UK 2021 standard rate
Certified supplier standard	For custom standards, typically top 5–10% in performance	CSCP · M6 p.295
Scorecard frequency	At least quarterly for strategic suppliers	CSCP · M6 p.302
Carrying cost rate	Typically 15–40% of inventory value per year	CSCP · M4 used in calculator 4
Waste sources (40/30/30)	40% design, 30% manufacturing process, 30% supplier inefficiencies	CSCP · M5 p.507–508 rule of thumb

What the CSCP does not giveNo target or benchmark for OTIF, fill rate, perfect order, dock-to-stock, or warehouse utilization. The 80% target in the capacity example is an illustration set by policy. Targets must come from your customers' requirements, your strategy and your own history.

Gaps and limitations

What this page cannot tell you

No OTIF formula, window, or benchmark

The CSCP gives the OTIF and on-time delivery definitions (M6 p.164) but no tolerance window, no treatment of partial deliveries, no order-versus-line rule, and no target. The formulas here are derived and the examples show how sensitive the result is.

DIFOT, RIFOT, and PIFOT are not CSCP terms

The modules read do not use these names. The mapping on this page connects them to CSCP concepts; confirm that your company's definition (what “in full”, “on time”, “received” and “delivered” mean) matches before comparing.

Some exhibits are not readable

Exhibit 5-4 (cost of adding warehouses), 5-13 to 5-20, 5-22 (value vs packaging density), 5-25, 5-27 to 5-31, the total reverse-logistics cost formula (p.466), and the fourth column of Exhibit 6-8 are images or blank in the supplied files.

Reading coverage

Module 5 was read in full. Module 6 was read except pages 227–273 and 285–292, which were not read in detail. Modules 2 and 4 come from earlier readings (some formulas reconstructed, tagged CSCP·R). Modules 3, 7 and 8 were not read for this page.

The CSCP's own inconsistencies

M5 p.236 says rail reduced fuel consumption by 104% when efficiency rose from 235 to 480 ton-miles per gallon (480 ÷ 235 − 1 ≈ 104%, so it is an efficiency gain). The barge, rail and truck fuel ratios (647 : 477 : 145) do not match the CO₂ percentages quoted (+43% and +800%) because the sources differ (p.254–255).

US-centric and dated data

Most statistics are US or EU, from 2017 to 2021. They illustrate proportions and are not current benchmarks.

Calculators are simplified

They assume normal lead-time variation, steady demand, constant rates, and independent errors. Real operations have seasonality, correlated failures, and contract-specific rules for free time and tolerance.

Your definitions come first

Before setting targets, define “on time”, “in full”, the unit of count, partial deliveries, early deliveries, and the clock start and stop for time measures, and apply them identically for every partner.

KPI dictionary

All KPIs in one searchable table

KPI	Area	Definition or formula	Source