Successful Use of Total Cost of Ownership
1 hour 30 minutes
Explore the cost factors to use in building your total cost of ownership templates and support selecting the best source of supply.
For many years supply management focused on just the price of materials and supplies they purchased. Often, they were pressured to select the lowest price offering. Unfortunately, often this decision led to late deliveries, nonconforming materials, and added workload. TCO made its entrance into the business world over twenty years ago. However, many supply professionals still struggle in their efforts to identify the cost factors to use in building their TCO templates. This topic explores these factors as well as new costs that organizations incur in today’s business world. Total cost of ownership impacts supply demographics, transportation costs, inventory levels, supply base decisions, and true material costs. The goal of TCO is to support selecting the best source of supply even if the price of goods is higher.
• You will be able to define the cost factors in total cost of ownership.
• You will be able to describe how to use this concept in your organization.
• You will be able to discuss total cost of ownership in supply decisions.
• You will be able to explain true cost of international purchases.