Culina

Close-up on Cost to Serve

Culina Logistics is the UK’s largest leading shared user distribution company specialising in the 0 to 5°C sector. The company came into the UK as recently as 1994, operating from Market Drayton and Milton Keynes, two of the most hi-tech chilled distribution facilities in the UK, where some 360,000 deliveries are made to 1,700 locations each year. Culina’s customers include big brand names such as Tropicana, Kraft, Kerrygold and Danone as well as Müller Dairy.

Culina’s success has been achieved through competitive pricing allied to high service standards, deployed for the most part via an in-house transport fleet. In its first ten years in the UK, Culina has successfully accommodated huge changes required by the major multiples, (for example, consolidation centres and factory gate pricing), but recognised the need to conduct a dynamic assessment of possible future changes, in order to maintain and improve its position.

Davies & Robson was commissioned to provide Culina with an objective assessment of Cost to Serve through the application of the Davies & Robson Costing Model. The scope of the review covered all Culina’s customers and delivery points.

The review has provided Culina with a customer-specific Cost to Serve for each delivery location and, if required, each individual delivery, expressed as a cost per unit of delivery. The results took account of the specific characteristics of individual consignments – drop size, service requirement and geographic location.

Commercial Director, Dale Fiddy said “Davies & Robson did an excellent job of confirming the real costs within the business and accurately allocating a true cost to serve”.

The results of the study have assisted Culina with their cost allocation program thereby ensuring ongoing customer cost competitiveness and providing the flexibility to proactively accommodate their customers’ requirements.

www.culina.co.uk