Total Cost of Ownership Along the Supply Chain: A Model Applied to the Tinting Industry

Abstract

Total Cost of Ownership (TCO) is a consolidated purchasing tool applied across different industries. However, in some cases existing models are not satisfactory. The paper addresses the case of the tinting industry supply chain, which is constituted as follows: manufacturers of colorant dispensing machines sell products and related services to paint producers, so they are able to sell the colour paints to the final consumers. Authors developed a TCO model integrating those existing in literature and including the following specifications: i) all relevant costs along the product life-cycle must be considered; ii) both goods and service-related costs are taken into consideration; iii) both explicit and hidden costs are highlighted; iv) the model should assume all actors’ perspective in the supply chain. The TCO model was tested with real data and gave the opportunity to provide useful insights on real costs sustained by each actor.