How can a cost per unit model help during unpredictability?

March 23, 2020 Casey Nighbor

Is your organization struggling with a volatile market and unexpected peaks?  If so, you're not the only one. A cost per unit (CPU) model could help create predictability in uncertain times, unlike traditional staffing models.

A CPU model manages staff based on the number of units your organization is handling, such as returns or shipped packages, while a traditional model generally manages based upon headcount. It can help provide stability and budget certainty instead of cost guarantees for your operation.

Learn more about how CPU can help during times of uncertainty.

What is CPU?

A CPU model focuses on mirroring our partner’s KPI goals related to throughput, quality, and safety. This is different from a traditional staffing model that focus on headcount, fill, and attendance rates

For example, a CPU model would manage staff based on the volume of returns you need to process, the number of packages that need to be shipped or loaded onto trucks, etc.

The CPU model offers complete accountability within your operation and increases output while meeting quality standards.

How can CPU help during unpredictable times?

Guaranteed output and cost

The key benefits of a CPU model during high peak times or market volatility are cost and output guarantees.

Regardless of circumstance, a CPU, like SIMOS, charges based on output and not headcount. This means that despite headcount swings, variance in production levels or market changes, your cost does not fluctuate. Your CPU partner takes on the responsibility and accountability of onboarding, training, managing, meeting your KPIs and relieves the burden of increased costs during unstable times.

On average, SIMOS clients see an increased output of 10-25% while their costs are reduced by up to 20%. At SIMOS, we work to create predictability during uncertain times. 

Reduce turnover

During unexpected peaks, high turnover becomes a huge risk. Due to quick turnaround times, the chances of overworked employees and more demands increases. Couple that with a large amount of employee choices and competitive wages and you have the recipe for a high turnover rate. You may be able to quickly fill positions again, but it takes time to fill and train for those new positions, reducing your productivity at a critical time and increases cost.

With a CPU model, your CPU partner takes on the responsibility of finding and training new staff to be efficient and your cost does not change. New associates will get up to speed faster without any risk to you of money lost.

Want to learn more about how a CPU model could help during market variability? Download our free eBook below.

About the Author

About Casey: Content marketing manager, frequently reading, aspiring chef, failed plant mom, connoisseur of tater tots, beauty products and airplane food.

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