“Take It Easy” is a manufacturer of light-weight, high-comfort mattresses. It realizes more than half of its total sales through two specialized mattress retail store chains.

Recognizing the pivotal role of its retail partners, Take It Easy wants to establish joint management processes with both chains. Both retailers have several other mattress labels in their portfolios, but Take It Easy is certainly an important supplier for them as well. The manufacturer is, therefore, optimistic that this initiative will be well received.
As a first step, Take It Easy wants to improve cost transparency. Its cost accounting system is fairly well established, and the manufacturing cost per model is known and closely tracked. The initiative now focuses on supply chain cost—here to be understood as all cost items related to dealing with the two retail partners. Take It Easy is convinced that joint cost reduction efforts promise significant gains if implemented properly. The manufacturer, therefore, wants to propose a collaborative supply chain cost improve-ment initiative to its retailers.

Which cost items should be in scope of this initiative both at Take It Easy and at its retail partners? How can “supply chain cost” be defined and properly recorded in this situation?