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Benefits of Cost Modeling for Household Mobility Service Providers

Jun 19, 2017

Cost modeling is a game changer for every organization irrespective of the industry it operates in. It is the analysis of all the costs involved in procuring the materials and labor, and manufacturing the product. This helps cost estimation process of the product along with the profit margins and helps the organization to lobby for the best possible price from the suppliers. Cost modeling enables the organizations to effectively negotiate the prices, terms and conditions, and the product quality and quantity with the suppliers and thereby drive cost savings in the organization.

The success of various household mobility or moving services providers highly depends on their ability to identify cost drivers and reduce costs, thereby making it essential for them to adopt cost modeling tools and perform cost estimation analysis. Moving services or house movers providers help consumers relocate their commercial as well as residential belongings or goods to either domestic or international locations. They offer a wide range of services such as packing, loading, unpacking and transferring items from one place to the other.

In the mobility services industry, cost is an important factor and hence, cost modeling fits right in with the organizations objectives. The underlying value proposition of this industry is that it strives to provide convenience and a seamless relocation experience to the customers. Other than the basic relocation services, these mobility services providers also offer value added services like insurance, visa and immigration, storage, repatriation assistance, employee and accommodation services. This leads to extra cost burden for the mobility service providers as there is a risk element attached to it. Many mobility service providers offer both core services as well as value added services to their customers, which is the most important factor that drives the businesses profitability.

Mobilizing Moving Services Costs, the Cost Modeling Way

We have already established the importance of managing costs in the mobility services industry. With the help of cost modeling, organizations can identify the procurement best practices, pricing strategies and key cost drivers. Cost modeling assists organization to bridge the gap between suppliers and cost variables that enable better decision making and strategy creation. One of our clients, a leading mobility service provider, benefitted from our cost modeling and procurement intelligence solutions which helped them create a competitive advantage in the market,

  • By leveraging cost modeling and procurement insights enabled the organization to identify cost drivers such as minimum wage, operational costs, new technology integration, sub-contractor fee, and changes in the prices of the consumables and materials.
  • Cost modeling empowered the organization to take strategic business decisions related to supplier selection and evaluation criteria, and optimizing category spends based on insights.
  • It was also found that the global moving services market is fragmented and highly competitive, which means that suppliers or service providers must utilize cost modeling tools so as to determine profit margins to gain more client accounts and maintain its market share.
  • Service providers with broad offering such as immigration services, employees, accommodation and insurance, achieve economies of scale as compared to others with limited offerings

Organizations can leverage cost modeling tools to identify the cost drivers, improve pricing strategy and billing policies and enable sales personnel to pitch in a better way to the clients. This enables the businesses to reduce errors, speed up the processes and offers simplicity in understanding various strategic plans and pricing strategies thereby reducing costs and driving profitability.

For detailed information on cost modeling, predictive modeling, cost estimation, and cost analysis for moving services

 

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