Process Cost-to-Serve is calculated in Bramble based on multiple inputs. This article will use a simple example to walk through the inputs required by Bramble and the calculations Bramble makes to provide the Process Cost-to-Serve metric.
The inputs required can be split into two categories:
Resource metrics
Output metrics
Resource metrics:
Resource metrics are required in order to ascertain how much time was utilized to produce the Process. Specifically, the Utilized Time (which is derived by multiplying the total Available Hours over the selected date-range by the Utilization percentage.
For example, a department had 1000 Available Hours and operated at a Utilization of 80%. The utilized time to complete Processes (and Production Tasks) was 800 hours.
Available Hours | Utilization | Utilized Time |
1000 hours | 80% | 800 hours |
The second required resource metric is the Hourly Rate. This is a static metric that is captured in Bramble at the team level. Continuing with the above example, this department has a hourly rate of $50. Given that 800 hours have been utilized, the cost of that utilized time is $40,000 ($50 x 800 hours).
Utilized Time | Hourly Rate | Utilized Time Cost |
800 hours | $50 | $40,000 |
To summarize, the cost of completing the Processes (and all associated Production Tasks) was $40,000.
Output metrics:
We now need to determine what the Utilized Time actually produced. To do that, the following Output metrics are critical to the Cost-to-Serve calculation:
Total Hours of Output across the selected date-range. This is calculated in Bramble by capturing completed volumes by Production Task and then applying the Ideal Task Time (ITT) to convert to hours. Using a simple process and its related Production Tasks as an example:
Production Task | Volume Completed | Ideal Task Time (ITT) | Total Output |
Make Initial Contact | 250 | 20 mins | 83.3 hours |
Request Report | 175 | 10 mins | 29.2 hours |
Review additional information | 175 | 15 mins | 43.8 hours |
Follow-up Outbound Call | 300 | 5 mins | 25 hours |
Approve Payment | 100 | 12 mins | 20 hours |
Close Case (Key Task) | 200 | 3 mins | 10 hours |
TOTAL | 1200 |
| 211.3 hours |
Note - 'Close Case' has been flagged as the Key Task in this process.
This gives us a total volume of 1,200 touches, a total output of 211.3 hours, and a total volume of 200 Key Tasks (closed cases).
Before we cover off key Indicators, it's important to note Bramble's methodology with regards to Processes and Key Tasks. For cost-to-serve reporting to be effective, each Process setup in Bramble must be made up of Production Tasks, and one of those must be selected as the Key Task in that Process. Often, it's the Task that kicks-off the workflow (i.e. Initial Contact) or the final step in the Process (i.e. Finalization, Close).
Bramble can then calculate the following Key Indicators:
- Unit Cost = The resource cost invested to complete a Process/Processes. The formula is: Unit Cost = Utilized Time Cost/Total Key Tasks. In this example, $40,000/200 = $200. Or put another way, based on the hourly rates, the utilized time, the contribution of the individuals, and the touches required to move a process from inception to completion, on average cost $200.
- Key Task Volume = a simple count of the Production Tasks that have been flagged as 'Key Tasks' via Bramble Settings. In this example, 200 Key Tasks were completed. Or put another way, 200 Processes were completed over the selected date-range.
- Touches per Key Task = The total volume of Production Tasks/total volume of Key Tasks. In this example, 1200/200 = 6 touches per Key Task. Or put another way, on average, this process takes 6 touches to move from inception to completion.