Strategic Cost Management in Supply Chains, Part 2: Executional Cost Management

2009 ◽  
Vol 23 (3) ◽  
pp. 289-305 ◽  
Author(s):  
Shannon W. Anderson ◽  
Henri C. Dekker
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Value Chain ◽  
Operations Management ◽  
Cost Management ◽  
Firm Strategy ◽  
Cost Structure ◽  
Cost Driver ◽  
Future Research ◽  
Strategic Cost Management

SYNOPSIS: Strategic cost management is the deliberate alignment of a firm’s resources and associated cost structure with long-term strategy and short-term tactics. Although managers continue to pursue efficiency and effectiveness within the firm, increasingly, improvements are obtained across the value chain, through reconfiguring firm boundaries, relocating resources, reengineering processes, and reevaluating product and service offerings in relation to customer requirements. The first paper in this two-part series reviewed structural cost management in supply chains (Anderson and Dekker 2009). Structural cost management employs tools of organizational design, product design, and process design to create a supply chain cost structure that is coherent with firm strategy. In this second paper of the series we consider executional cost management in supply chains. Executional cost management employs measurement and analysis tools (e.g., cost driver analysis, supplier scorecards) to evaluate supply chain performance and sustainability. Using selected studies in accounting, operations management, and business strategy, we provide an overview of strategic cost management in supply chains, highlight contemporary developments, and suggest directions for future research.

Strategic Cost Management in Supply Chains, Part 1: Structural Cost Management

2009 ◽  
Vol 23 (2) ◽  
pp. 201-220 ◽  
Author(s):  
Shannon W. Anderson ◽  
Henri C. Dekker
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Value Chain ◽  
Operations Management ◽  
Cost Management ◽  
Firm Strategy ◽  
Cost Structure ◽  
Cost Driver ◽  
Future Research ◽  
Strategic Cost Management

SYNOPSIS: Strategic cost management is the deliberate alignment of a firm’s resources and associated cost structure with long-term strategy and short-term tactics. Although managers continue to pursue efficiency and effectiveness within the firm, increasingly improvements are obtained across the value chain: through reconfiguring firm boundaries, relocating resources, reengineering processes, and re-evaluating product and service offerings in relation to customer requirements. In this first paper in a two-part series on strategic cost management in supply chains, we review structural cost management. Structural cost management employs tools of organizational design, product design, and process design to create a supply chain cost structure that is coherent with firm strategy. In the second part of the series we will consider executional cost management, which employs measurement and analysis tools (e.g., variance analysis, cost driver analysis, supplier scorecards) to evaluate supply chain performance. Using selected studies in accounting, operations management, and business strategy, we provide an overview of strategic cost management in supply chains, highlight contemporary developments, and suggest directions for future research.

scholarly journals Control Model for Intelligent and Demand-Driven Supply Chains

2012 ◽  
pp. 262-283
Author(s):  
Jan Strandhagen ◽  
Heidi C. Dreyer ◽  
Anita Romsdal
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Relevant Information ◽  
Control Model ◽  
Information And Communications Technology ◽  
Future Research ◽  
Small Scale ◽  
Information And Communication ◽  
Trust And Power

Orchestrating supply chains is challenging. This chapter describes how to control a supply chain to make it truly demand-driven – based on the assumption that all relevant information is made available to all partners in real time. The chapter explores the elements of a framework for intelligent and demand-driven supply chain control, with regards to the overall concept and associated principles, and demonstrates these in a case example. Challenges to the realization of the proposed control model include trust and power, supply chain dynamicity and uncertainty, and required investments in competence, standardization, and information and communication technology. Some of these can be met through initial small-scale implementations of the proposed model, to demonstrate effects, and by exploiting facilities for information sharing and collaboration, like supply chain dashboards and control studios. Future research within operations management, technology and information and communications technology (ICT) will support broader realization of the proposed control model.

scholarly journals Control Model for Intelligent and Demand-Driven Supply Chains

2011 ◽  
pp. 49-70 ◽  
Author(s):  
Jan Strandhagen ◽  
Heidi C. Dreyer ◽  
Anita Romsdal
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Relevant Information ◽  
Control Model ◽  
Information And Communications Technology ◽  
Future Research ◽  
Small Scale ◽  
Information And Communication ◽  
Trust And Power

Orchestrating supply chains is challenging. This chapter describes how to control a supply chain to make it truly demand-driven – based on the assumption that all relevant information is made available to all partners in real time. The chapter explores the elements of a framework for intelligent and demand-driven supply chain control, with regards to the overall concept and associated principles, and demonstrates these in a case example. Challenges to the realization of the proposed control model include trust and power, supply chain dynamicity and uncertainty, and required investments in competence, standardization, and information and communication technology. Some of these can be met through initial small-scale implementations of the proposed model, to demonstrate effects, and by exploiting facilities for information sharing and collaboration, like supply chain dashboards and control studios. Future research within operations management, technology and information and communications technology (ICT) will support broader realization of the proposed control model.

Vertical Contracts in a Supply Chain and the Bullwhip Effect

2020 ◽  
Author(s):  
Zhan Qu ◽  
Horst Raff
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Operations Management ◽  
Bullwhip Effect ◽  
Price Effect ◽  
Demand Shocks

This paper shows that decentralized supply chains, in which upstream firms use linear wholesale prices, may experience lower upstream production and downstream sales volatility than vertically integrated supply chains and may be less susceptible to the bullwhip effect by which the variance of upstream production exceeds the variance of downstream sales. The reason is that decentralized supply chains exhibit a price effect, whereby upstream producers raise wholesale prices in the case of positive demand shocks and lower wholesale prices in the case of negative demand shocks. Whereas upstream producers benefit from the price effect and, thus, from a dampening of the bullwhip effect, downstream firms may lose, and overall supply chain profit may decrease. This paper was accepted by Vishal Gaur, operations management.

scholarly journals Addressing Covert Channel Attacks in RFID-Enabled Supply Chains

2013 ◽  
pp. 176-190
Author(s):  
Kirti Chawla ◽  
Gabriel Robins
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Network Flow ◽  
Economic Effects ◽  
Future Research ◽  
Covert Channel ◽  
Covert Channels ◽  
Node Selection ◽  
Future Research Directions ◽  
Key Nodes

RFID technology can help competitive organizations optimize their supply chains. However, it may also enable adversaries to exploit covert channels to surreptitiously spy on their competitors. We explain how tracking tags and compromising readers can create covert channels in supply chains and cause detrimental economic effects. To mitigate such attacks, the authors propose a framework that enables an organization to monitor its supply chain. The supply chain is modeled as a network flow graph, where tag flow is verified at selected key nodes, and covert channels are actively sought. While optimal taint checkpoint node selection is algorithmically intractable, the authors propose node selection and flow verification heuristics with various tradeoffs. The chapter discusses economically viable countermeasures against supply chain-based covert channels, and suggests future research directions.

scholarly journals The association between strategic cost management and enterprise risk management: A critical literature review

2011 ◽  
Vol 9 (1) ◽  
pp. 184-195
Author(s):  
Mohamed Elsayed ◽  
Ananda Wickramainghe ◽  
Marwa Abdel Razik
Keyword(s):  
Risk Management ◽  
Value Chain ◽  
Positive Relationship ◽  
Cost Management ◽  
Enterprise Risk Management ◽  
Value Chain Analysis ◽  
Total Quality ◽  
Strategic Cost Management ◽  
Chain Analysis ◽  
Enterprise Risk

Reviewing literature and application of strategic cost management (SCM) and enterprise risk management (ERM) are critical and significant for corporate management to facilitate top management to employ appropriate SCM and ERM processes and systems especially in occurrence of constant and regular business turn around, crises and turbulence in recent time in world of business. This paper revisits and reviews the association between strategic cost management and enterprise risk management. Based on this review, the following propositions were developed; firm, which adopted SCM, is more likely to adopt ERM approach, there is a positive relationship between audit type and the association between ERM and SCM, and there is a positive relationship between company size and the association between ERM and SCM. The association between ERM and SCM differs from industry to another. The study also develops a framework for SCM composes of the following items: SWOT analysis, benchmarking, competitive advantage, value chain analysis, implement strategy that reduce cost during the value chain analysis by using target costing, accounting based-costing, accounting based-management, just in time, total quality management, life cycle, theory of constraints, and measure performance by using balanced scorecard.

scholarly journals COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions

2021 ◽  
Vol 9 ◽  
Author(s):  
Xunpeng Shi ◽  
Tsun Se Cheong ◽  
Michael Zhou
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Value Chain ◽  
Equilibrium Analysis ◽  
Output Analysis ◽  
Domestic Production ◽  
China Trade ◽  
Gross Domestic Production ◽  
Trade Embargo ◽  
Production Losses

Economic shocks from COVID-19, coupled with ongoing US-China tensions, have raised debates around supply chain (or global value chain) organisation, with China at the centre of the storm. However, quantitative studies that consider the global and economy-wide impacts of rerouting supply chains are limited. This study examines the economic and emissions impacts of reorganising supply chains, using Australia-China trade as an example. It augments the Hypothetical Extraction Method by replacing traditional Input-Output analysis with a Computable General Equilibrium analysis. The estimation results demonstrate that in both exports and imports, a trade embargo between Australia and China – despite being compensated for by alternative supply chains—will cause gross domestic production losses and emissions increases for both countries and the world overall. Moreover, even though all other economies gain from the markets left by China, many of them incur overall gross domestic production losses and emission increases. The finding that the Association of Southeast Asian Nations and India may also suffer from an Australia-China trade embargo, despite a gain in trade volume, suggests that no country should add fuel to the fire. The results suggest that countries need to defend a rules-based trading regime and jointly address supply chain challenges.

scholarly journals Transforming the news value chain in the social era: a community perspective

2015 ◽  
Vol 20 (3) ◽  
pp. 313-326 ◽  
Author(s):  
Maria Jose Hernandez Serrano ◽  
Anita Greenhill ◽  
Gary Graham
Keyword(s):  
Supply Chain ◽  
Conceptual Framework ◽  
Value Chain ◽  
Firm Strategy ◽  
Consumer Participation ◽  
Community Type ◽  
Local News ◽  
Content Type ◽  
The Social ◽  
News Industry

Purpose – The purpose of this paper is to develop a conceptual framework to understand the influence that the social era is having on the value chain of the local news industry. The authors theoretically advance value chain theory by, firstly, considering the influence of community type and age on consumption and, secondly, exploring the role that consumers can play in value-adding activities. The theoretical contribution of this study lies in moving from a transactional approach towards consumer relationships in the value chain towards managing consumers as a source of relational value (e.g. co-creation and integrated perspectives). Design/methodology/approach – The conceptual framework is theoretically positioned in relation to community and digital community practices in the social era. A series of research questions are presented, then these questions are explored drawing on empirical data from the Pew database. The authors then advance the framework further to consider news firm strategy towards its consumers. Fifteen in-depth executive interviews were conducted with local news organizations in the Manchester area of the UK. Findings – The authors illustrate that different types of communities (merging cohorts and locations) are influencing levels of technological and social connectivity within the value chain. The authors also found that the news industry is experimenting with reconfiguring its consumer relations from a purely transactional to a co-created and participatory value-added activity in the social era. In terms of its policy impact, the findings in this paper show that the whole strategic value chain ideology of the news industry needs to change radically; away from its largely transactional (and lack of trust) approach in the ability of consumers to create value in the supply chain (other than to buy a product) and, move towards much greater consumer involvement and participation in value chain processes (creation, production and distribution of news products and services). Originality/value – The change associated with social media and connectivity is changing the way that different community types and consumer groups are now consuming and participating in news content creation. Unlike previous studies, the authors show that there is variance and complexity in the levels of consumer participation by community type/age group. Using the Pew data, the authors contribute to knowledge on the value creation strategy of news firms in the social era, by identifying how communicative, social and communicative logics influence value and co-creation activities in the local news supply chain. Through interviews, the authors advance value co-creation theory from its strategic and marketing origins to operational and supply chain implementation.

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