Logistics cost structuring using both manufacturing and non-manufacturing costs

The objective of this research is to create a strategic framework for logistics cost in the manufacturing industry. The purpose of this document is threefold: a) to identify in detail the main components of the logistics cost; b) to create a general map of the logistics cost for the manufacturing industry; c) to explain the practical and analytical implications of the proposed model. The authors found several models that help the industry to select their suppliers when the main decision driver is cost. In the manufacturing industry, the number of suppliers and the selection criteria is broad and complicated. Flexibility, lead time, quality, and finally cost are common drivers that companies use to select their suppliers. Most commonly, cost represents an important element, but not a critical one. By gathering information about logistics cost, companies can increase efficiency and control their real manufacturing cost.