Jeremiah Pomerleau

In support of Woodward’s efforts to optimize total landed costs (TLC), I developed the TLC Estimator which provides a structured framework for base-lining and comparing global sourcing opportunities. The TLC Estimator aligns with the fundamental objectives of TLC analysis, and comprises essential cost elements necessary to perform accurate and thorough landed cost assessments. Armed with the TLC Estimator, managers are empowered to make informed sourcing decisions.

TLC analysis… Show more

In support of Woodward’s efforts to optimize total landed costs (TLC), I developed the TLC Estimator which provides a structured framework for base-lining and comparing global sourcing opportunities. The TLC Estimator aligns with the fundamental objectives of TLC analysis, and comprises essential cost elements necessary to perform accurate and thorough landed cost assessments. Armed with the TLC Estimator, managers are empowered to make informed sourcing decisions.

TLC analysis involves a comprehensive assessment of landed cost elements that include supplier contractual terms & conditions, logistics and transportation, Customs brokerage & trade compliance, inventory costs, sourcing costs & supplier administration and most importantly, supply chain risk. In-depth TLC modeling allows managers to evaluate domestic and international supplier sourcing decisions with improved confidence by identifying and quantifying pertinent cost components they might have otherwise overlooked as well as accounting for uncontrollable market factors, such as space capacity constraints and volatile fuel prices. The primary objective of TLC Analysis is to improve insight and understanding of cost tradeoffs, for instance, deciding between low-cost sea freight and air freight while simultaneously evaluating cash flow constraints with holding excess inventory.

Additionally, TLC analysis promotes collaboration among supply chain functions, such as logistics, trade compliance, sourcing, manufacturing and finance. To ensure meaningful TLC analysis, it’s important that these functions, that often operate in silos work collectively to compile and develop data and costing elements, such as freight costs, trade compliance costs, sourcing overhead and inventory stocking requirements. Through cross-functional partnering, managers begin to better understand the complexities of international trade, costs impacts and the risks associated with sourcing internationally. Show less