Cost-transparent sourcing in China applying total cost of ownership

Philipp Bremen · Josef Oehmen · Robert Alard

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Outsourcing and Supply Chain Management Quality and Supply Management Life Cycle Costing Analysis

Abstract

Asia, eminently China, is gaining in importance regarding manufacturing especially for high- volume, low-cost production. The request from industry in Switzerland to comprehend all costs related to global sourcing projects concerning China leads to the approach of total cost of ownership (TCO). In this paper, first a literature review regarding existing concepts with special focus on industry incentives, benefits, barriers and methods of structuring cost objects is conducted. Thereafter, an enhancement of the TCO approach is presented in order to achieve a holistic and transparent cost evaluation that takes supply chain risks into account. Concluding, methods for quantification of cost objects are discussed and evaluated critically.

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References

2000Introduction to Action Research: Social Research for Social Change 1988Measure Costs Right: Make the Right Decisions 1995Total cost of ownership 2002Supplier selection problem: a comparison of the total cost of ownership and analytic hierarchy process approaches 2000Introduction to Action Research: Social Research for Social Change 1988Cost‐Based Supplier Performance Evaluation 2003Developing a framework for evaluating the logistics costs in global sourcing processes 1999Improving the efficiency of the purchasing process using total cost of ownership information: The case of heating electrodes at Cockerill Sambre S.A.

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2017Costos logísticos y metodologías para el costeo en cadenas de suministro: una revisión de la literatura

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