Chapter 7. Strategic Cost Management in a Global Supply Chain
Strategic Cost Management—A Chemical Company Example
Several years ago, a large multinational chemical company began developing corporate-level long-term alliance agreements with selected process equipment suppliers. The primary goal of this process was to reduce the supply base and future investment costs by identifying and selecting suppliers who would become common to all 18 business units. The long-term vision included realizing greater supplier integration in the design of new facilities and equipment.
Because this company historically accounts for less than 20 percent of a typical equipment supplier's volume, relying on fewer suppliers was expected to provide greater purchasing ...
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