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The Strategic Use of Supplier Price and Cost Analysis

Author(s):

Michael E. Smith, Ph.D., C.Q.A.
Michael E. Smith, Ph.D., C.Q.A., MBA Program Director and Associate Professor of Management & International Business Western Carolina University
Lee Buddress, Ph.D., C.P.M.
Lee Buddress, Ph.D., C.P.M., Director, Supply and Logistics Management Program and Associate Professor of Supply and Logistics Management, Portland State University
Alan Raedels, Ph.D., C.P.M.
Alan Raedels, Ph.D., C.P.M., Professor Emeritus, Supply and Logistics Management, Portland State University

91st Annual International Conference Proceedings - 2006 - Minneapolis, MN
Abstract

We frequently hear that supply professionals want to be seen as vital contributors to the strategic success of the firm, and that few supply management professionals really feel that they have the attention of executive management. Supplier price and cost analysis can contribute to success in attaining executive attention to supply management activities, but only if it is accomplished within a strategic context. Today's supply manager must move away from simple conceptualizations of analysis as the handmaiden of mere cost containment and toward a focus on the creation of value for the firm, the supplying firms, and for our customers. This presentation provides a strategic context for considering price and cost analysis, an understanding of what is involved, and a view of the practical applications of such analyses. The presentation includes determination of appropriate methods for given market conditions and supplier relationships, an overview of the methods that are available, guidance for leveraging benefit from cost models, and advice for utilizing your results in management decision-making that may enhance your reputation as a supply management professional.

The Strategic Use of Supplier Price and Cost Analysis — 55 KB (PDF)