Strategic Cost Management in Supply Chains, Part 2: Executional Cost Management

Posted: 12 Mar 2009 Last revised: 3 Aug 2015

See all articles by Shannon W. Anderson

Shannon W. Anderson

University of California, Davis - Graduate School of Management

Henri C. Dekker

Vrije Universiteit Amsterdam

Date Written: March 11, 2009

Abstract

Strategic cost management is the deliberate alignment of a firm's resources and associated cost structure with long-term strategy and short-term tactics. Although managers continue to pursue efficiency and effectiveness within the firm, increasingly, improvements are obtained across the value chain: through reconfiguring firm boundaries, relocating resources, reengineering processes, and re-evaluating product and service offerings in relation to customer requirements. The first paper in this two-part series reviewed structural cost management in supply chains (Anderson and Dekker 2009). Structural cost management employs tools of organizational design, product design and process design to create a supply chain cost structure that is coherent with firm strategy. In this second paper of the series we consider executional cost management in supply chains. Executional cost management employs measurement and analysis tools (e.g., cost driver analysis, supplier scorecards) to evaluate supply chain performance and sustainability. Using selected studies in accounting, operations management and business strategy, we provide an overview of strategic cost management in supply chains, highlight contemporary developments, and suggest directions for future research.

Keywords: supply chain, supplier scorecard, cost of ownership, value chain, supplier

JEL Classification: L20, L23, M40, M46, M11

Suggested Citation

Anderson, Shannon W. and Dekker, Henri C., Strategic Cost Management in Supply Chains, Part 2: Executional Cost Management (March 11, 2009). Anderson, S.W. & Dekker, H.C. (2009). Strategic cost management in supply chains, part 2: Executional cost management. Accounting Horizons, 23(3), 289-305. , Available at SSRN: https://ssrn.com/abstract=1357747

Shannon W. Anderson (Contact Author)

University of California, Davis - Graduate School of Management ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Henri C. Dekker

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

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