Cost modelling approach for the source specific evaluation of alternative manufacturing networks

Abstract

In order to seize the full potential of production on a global scale, companies need to constantly evolve their production networks and reconsider the number of sites. Decision making in this context forces corporations to process a substantial amount of information and complexity. Prominent examples of German companies (e.g. Stihl or Steiff) prove the present struggle of decision makers. Existing approaches are either too complex and effortful or they do not consider all decision relevant cost factors in a cause-fair way. This paper presents a pragmatic cost modelling approach which focuses on the identification and projection of decision relevant cost factors as well as their source specific allocation in terms of the impact on existing sites in the network.