Strategic Cost Framework - Critical Products
Strategies:Collaborative cost reductions efforts based on total cost. Cost Analysis
Strategic Cost Framework - Commodities
Strategies:Leverage Preferred SuppliersPrice analysis using market forces
Strategic Cost Framework - Unique Products
Strategies:Standardize Cost requirementsCost Analysis
Strategic Cost Framework - Generics
Strategies:Automate to reduce purchasing involvementPrice Analysis using market forces
Which Frameworks use Price Analysis?
Commodities and Generics
Which Frameworks use Cost Analysis?
Unique and Critical Products
Which Framework uses Total Cost Analysis
All of them
Difficulty in Conducting a Spend Analysis
Difficulty in obtaining timely and accurate information - Multiple versions of supplier names, part numbers and descriptions, service descriptions, etc. - Data entry errors - Purchases made outside of the systemImpact of a global environment - Different recording procedures - Different accounting systems - Difficulty in translating data between systems
Acquisition Costs
Purchase PricePlanning CostsQuality CostsTaxesFinancing Costs
Ownership Costs
Downtime CostsRisk CostsCycle time costsConversion costsNon-Value Adding CostsSupply Chain and Network Costs
Post Ownership costs
Environmental CostsWarranty CostsProduct Liability CostsCustomer Dissatisfaction Costs