Integrated cost management in supply chain

Abstract

The article presents the basic foundations of cost management in the supply chain. In the first part of the paper the scope of cost management in the supply chain and the importance of supply chain costing are explained. The second part of the paper presents the total cost of ownership (TCO) according to the opinions of various authors and discusses the most important components of the total cost of ownership. In the last part of the article the use of activity-based costing method for the assessment of cooperating partners within the value chain is presented. Moreover the need for integration of activity-based costing (ABC) and total cost of ownership (TCO) are explained. Such an integrated approach can be further supplemented by the computation of the supplier performance index (SPI). These methods of management accounting can provide a basis for the assessment of suppliers with respect to the activities performed in the supply chain. (English) [ABSTRACT FROM AUTHOR]