Cost management along the supply chain

Abstract

The potential of strategic cost management tools to support inter-company supply chain value creation has been highlighted by a number of researchers. However, not much research using case studies has been done to demonstrate how cost management tools are applied along supply chains. In addition, limited research has focused on cost management along supply chains in developing countries such as South Africa. This research uses multiple case studies to investigate and gain insight into the manner in which cost management is applied along a product’s supply chain in a developing country - South Africa. The main objective of the study is to contribute to a better understanding of how costs along supply chains can be managed using cost management tools. The paper demonstrates that cost management techniques such as target costing, total quality management, just-in-time and life-cycle costing are being applied. In addition, the research reveals that these cost management techniques assist in cost planning, inventory reduction, cycle time reduction, improved customer satisfaction leading to lower returns and warranty costs, proactive management of quality-related costs, and extended cost analysis across the supply chains