Cost-time profile CTP

A key benefit of being able to cost logistics processes is that cost information can be used in conjunction with time information. The synergies of the two can then provide opportunities for identif5dng activities which create either value or waste. 

The cost-time profile (CTP) (Bicheno, 2004) is a graph, which plots cumulative time against cumulative cost for a set of discrete activities that together form a process or a supply chain. The CTP utilises outputs from two sources  

As discussed earlier, ABC strives to achieve an equitable distribution of overhead costs to activities. Table 3.5 illustrates cumulative time and cost for a process comprising six activities. 

The profile shows that time and cost are not related linearly. Bicheno (2004) stresses the importance of interpreting hoth the horizontal and vertical lines of the CTP  

Processes in the top right-hand box are prime candidates for savings in both time and cost. Processes in the bottom left-hand box are low on the list of priorities. 

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