Supply Chain Costing and Performance Management, 2nd Edition

CHAPTER 2Key Observations That Support the Development of the Book

THE NEED TO MANAGE and control supply chain costs is more important than ever. Senior executives face pressure from multiple fronts to continually reduce supply chain costs. Value‐conscious end users and competitors who achieve cost reductions by integrating portions of their supply chains are increasing management awareness of the importance of reassessing supply chain management. This is an issue the firm and its trading partners need to jointly address. Significant progress has been made regarding the exchange of demand and planning information and in the integration of key processes within the supply chain. However, the exchange and management of cost information across firms' boundaries lags far behind and remains largely unexplored as an opportunity to further integrate the supply chain. As a result, supply chain managers are often ill‐equipped to understand how they or their trading partners affect overall supply chain costs or profitability.

The research the authors conducted to write this book focused on how many different firms are attempting to expand their visibility and integrate cost management within their supply chains. The book is structured to assist supply chain professionals in their implementation of supply chain costing and in obtaining the cost information necessary to effect cost reductions and improve performance within their supply chains. The firms researched spanned multiple industries, ...