Die Einkaufsfunktion gewinnt immer stärker an Bedeutung. Infolgedessen spielen Lieferanten eine immer wichtigere Rolle, womit sich besondere Anforderungen die Lieferantenauswahlentscheidung anknüpfen. Das „Total Cost of Ownership“-Konzept hat zum Ziel, eine umfassende Kostenbetrachtung für ein Beschaffungsobjekt vorzunehmen, um so eine fundierte Managemententscheidung zu ermöglichen. Die Arbeit stellt das TCO-Konzept zunächst allgemein vor und stellt es dann zwei weiteren Analysetools, der Lieferantenpreisanalyse und dem Target Costing (Zielkostensteuerung), gegenüber. So kann aufgezeigt werden, dass TCO ein zentraler Bestandteil des modernen Beschaffungsmanagements sind. Darauf basierend werden Anwendungsmöglichkeiten von TCO als Entscheidungsunterstützungsinstrument skizziert.
Table of Contents
1. Introduction
2. Comparing Cost-based Models for management decision making
2.1 TCO: an overview
2.2 Investigating the purchase price: an analysis of supplier costs
2.3 Target Costing – an end customer-oriented way of costing
2.4 Cost Model Synopsis
3. TCO in strategic purchasing
4. Conclusion
Objectives and Topics
This paper examines the "Total Cost of Ownership" (TCO) approach as a strategic instrument for supplier selection, arguing that reliance on initial purchase price is insufficient for modern procurement. It evaluates TCO against alternative cost models to provide a framework for informed management decision-making.
- Strategic importance of modern procurement functions
- Evaluation of TCO vs. supplier cost analysis and target costing
- Integration of pre-transaction, transaction, and post-transaction costs
- Addressing qualitative factors and "soft" costs in sourcing
- Limitations and practical application of cost-based models
Excerpt from the Book
2.1 TCO: an overview
As previously mentioned, TCO aims at providing a longer term perspective on the costs associated with the purchase of a good (Ellram / Siferd 1993; Ferrin / Plank 2002). In times where procurement was mainly a clerical function, products simply had to be purchased at the right price, time and quality (Pearson / Gritzenmacher 1990; Humphreys et al. 2000). Nowadays, where procurement is more and more involved in strategic decisions, a more long-term perspective on what resources a company commits when procuring a good is needed (Ferrin / Plank 2002). The idea of TCO therefore is to evaluate the costs that are involved in preparing and conducting the purchase as well as that occur during the lifecycle of the product (Ellram / Siferd 1993). In the case of a machine for example, pre-transaction costs could be supply market research or supplier negotiations; actual transaction costs consider more obvious elements as the purchase price, but also might assign a value to less visible costs such as payment terms (which might cause the need to refinance the purchase price and incur e.g. interest); post transaction costs consider the costs that occur during the lifecycle of the machine, e.g. maintenance costs or energy consumption of the machine (Ellram 1993; Boge, 2008). Moreover, even qualitative aspects could be taken into consideration by quantifying them, e.g. by assigning a monetary value to the impact of the purchased good on the satisfaction of the buyer’s customer (Ellram / Maltz 1995). The table on the following page provides an overview of potential elements to be considered in TCO evaluations. However these are just general suggestions. Additional elements can and should be integrated where required (Ellram 1993).
Summary of Chapters
1. Introduction: The chapter outlines the increasing strategic importance of procurement in a globalized market and introduces TCO as an alternative to simple purchase-price-based decision making.
2. Comparing Cost-based Models for management decision making: This chapter provides a detailed overview of TCO, supplier cost analysis, and target costing, evaluating their respective procedures, benefits, and drawbacks for management decisions.
3. TCO in strategic purchasing: This section discusses the practical application and limitations of TCO, emphasizing that while it is a powerful tool, it must be used with caution regarding data quality and organizational context.
4. Conclusion: The conclusion summarizes that no cost model should be used in isolation and advocates for an integrated approach to maximize the strategic value of the procurement function.
Keywords
Strategic Purchasing, Procurement, Supplier Selection, Total Cost of Ownership, TCO, Cost Analysis, Target Costing, Supplier Management, Outsourcing, Cost Modelling, Management Decisions, Supply Chain, Strategic Sourcing, Lifecycle Costs, Qualitative Factors
Frequently Asked Questions
What is the primary focus of this work?
The work focuses on the Total Cost of Ownership (TCO) approach and its role in improving supplier selection decisions compared to traditional price-based methods.
What are the central themes covered?
The central themes include the shift of procurement towards strategic management, the analysis of lifecycle costs, the identification of hidden costs in purchasing, and the integration of diverse financial models.
What is the primary research goal?
The goal is to determine the effectiveness of TCO as an instrument for decision support and how it compares to other cost-based models like supplier cost analysis and target costing.
Which scientific methodology is applied?
The paper uses a deductive approach based on a wide range of academic literature to frame the discussion and compare different cost management models.
What topics are discussed in the main body?
The main body covers the definition of TCO components, a comparative analysis of three major cost models, and a critical discussion of the limitations and strategic advantages of implementing TCO.
Which keywords best characterize the study?
The study is characterized by terms such as Total Cost of Ownership, Strategic Purchasing, Supplier Selection, and Cost-based Decision Support.
How does TCO address "soft" qualitative factors?
TCO attempts to assign monetary values to qualitative aspects, such as the impact on customer satisfaction, to allow for more comprehensive trade-off evaluations.
Why might a company choose not to use TCO for all purchases?
TCO implementation can be time-consuming and requires significant resources; therefore, it is often not viable for simple, low-value commodity products where price-based decisions suffice.
- Arbeit zitieren
- Florian C. Kleemann (Autor:in), 2011, A Comparative Analysis of the Total Cost of Ownership Approach in Sourcing Decisions, München, GRIN Verlag, https://www.hausarbeiten.de/document/190104
