E d w a r d H . F r a z e l l e , P h . D . The RightServe™ strategy is segmented by channel, ABC customer strata within a channel, commodity, and SKU strata within a commodity. It establishes optimal targets which must be met or exceeded for supply chain fill rate, response time, delivery frequency, delivery quality, packaging, and any other element of the supply chain service policy. Those requirements serve as the constraints in supply chain optimization. An example supply chain optimization statement follows. An illustration of the optimization is in Figure 2.5. Example RightChain™ Objective Function • Minimize Total Supply Chain Cost o Total Supply Chain Cost = Total Logistics Costs + Inventory Policy Costs™  Total Logistics Costs = Inbound Transportation Costs + Total Warehousing Costs + Outbound Transportation Costs  Inventory Policy Costs = Inventory Carrying Costs + Lost Sales Cost Example RightChain™ Constraints • Fill Rate > 99.2% • Response Time < 48 Hours • Delivery Frequency = 3x per Week | 41


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