Strategic cost management in a global supply chain

Abstract

In the face of an economic downturn, cost has become a focal point of supply chain management. Cost management is increasingly being recognized as a vital core competency needed for survival. As companies transition from being vertically integrated to pursuing increasingly outsourced manufacturing strategies, modeling and monitoring the total cost of manufacturing products has become crucial, and complicated. In the context of the automated test equipment industry, this thesis explores the impact of outsourcing on product cost and cost management practices. It examines prevailing cost management practices with reference to design and procurement, as well as methods to leverage information technology and re-engineer business processes to manage "spend" effectively and efficiently. It surveys capabilities that are available through software and examines cost-benefit tradeoffs that have to be addressed in selecting such systems.