Strategic Cost and Value Management in the Supply Chain

Introduction

This Strategic Cost and Value Management in the Supply Chain training course explores the key concepts of Strategic Cost / Price Analysis, Value Analysis, and Total Cost of Ownership that will move today’s organization to the strategic focus needed to achieve world-class performance. This training course will look at how to deliver price reduction, cost reduction and cost avoidance in modern organizations.

Strategic cost management is vital and increasingly important for all organizations. As global economic conditions place an increased focus on cost reduction to maintain profitability, it is essential that costs are managed in ways that ensure continued performance in strategic areas, and increase value for the organization and stakeholders overall. This Strategic Cost and Value Management in the Supply Chain training course leads delegates through development and implementation of carefully crafted strategies for managing costs while improving quality and productivity.

This training course will feature:

• Setting strategies for world class strategic cost management
• Maximizing value for money
• Examining costs drivers
• Improving profitability by controlling total costs
• Understanding and managing supplier pricing models

Objectives

By the end of this training course, participants will be able to:

• Identify the major costs drivers to recommend cost control measures and strategies
• Analyze the Elements of Cost in Supplier’s Price
• Evaluate total life cycle costs
• Analyze costs within the organization
• Create an approach to Strategic Cost management

Training Methodology

This Strategic Cost and Value Management in the Supply Chain training course will utilize a variety of proven highly interactive adult learning techniques to ensure maximum understanding, comprehension and retention of the information presented. The training course is highly interactive and will prompt delegates to reflect on their current practices and goals. The instructor will guide and facilitate learning using a wide range of methods including direct input, discussions, case studies and exercises in groups and pairs.

Target Audience

This training course is suitable to a wide range of professionals but will greatly benefit the following individuals who belong in the Oil, Gas & Petrochemicals Industry:

• Purchasing, Procurement, Contracts, Contract Administration, Projects Personnel
• Professionals who are engaged in planning either at strategic or operational level
• Professionals who are responsible for the management of costs
• Those engaged in the management or operation of projects
• Those responsible for developing, managing or working with budget / cost constraints
• Those with an interest in strategic planning and costs management

Course Outline

• Setting the Strategic Direction
  • The Strategic Planning Process & Models
  • Porter’s 5 Forces Model
  • Routes to Competitive Advantage
  • Price, Cost and Value
  • Essential Cost Drivers and Potential Savings
  • Stages to World Class Cost Management
• Price Down – Understanding and Managing Price
  • Supplier Pricing Models
  • Krajlic Supply Positioning Matrix
  • Methods of Price Analysis
  • Strategies and Tactics
  • Competition and Partnership – routes to better pricing
• Cost Down – Analyzing and Managing Internal and Supplier Costs
  • Total Cost of Ownership / Life Cycle Costing
  • Methods of Cost Analysis
  • Major Elements of Cost
  • What and How important are Supplier overheads?
  • Sources of Cost Information
  • Logistics Costs
• Driving Cost Out – Supplier Engagement and Cost Elimination
  • Inventory, Warehousing and Shipping Costs including Economic Order Quantity
  • Cost-Volume-Profit Analysis and Break-Even Analysis
  • Cost Engineering
  • Fixed and Variable Costs Defined
  • Checking Supplier Value
  • Profit and Risk Sharing
  • What-if Analysis to Build Scenarios and Test Sensitivity
• Implementing and Measuring Strategic Cost Management
  • Barriers to Strategic Cost Management
  • Key Performance Metrics
  • Cost Cutting Traps and How to Avoid Them
  • Types of Budgets, Their Purpose / Benefits & Problems & Limitations
  • Types of Controls – Personnel Action & Results Controls