Cost Analysis for Non-Financial Supply Chain Professionals
- 31 Mar 2017 – 31 Mar 2017, Intake: 1
- 8 Jun 2017 – 8 Jun 2017, Intake: 2
- 26 Sep 2017 – 26 Sep 2017, Intake: 3
- 15 Dec 2017 – 15 Dec 2017, Intake: 4
In today’s dynamic and volatile market conditions, businesses are facing intense challenges to be cost effective to remain profitable. Henceforth, the spotlight would focus on supply chain management and operations to deliver the cost saving contributions to stay profitable.
TCO (total cost of ownership) is the fundamental concept in understanding the cost breakdown and analysis of a business cost structure. Therefore, knowledge of a business’s TCO would allow a clear understanding of the effectiveness of a business’s operations.
Big Data and IoT applications could facilitate a clear tracking of cost expenditures and understanding of the supply base for a business’s operations, and help in formulating more cost effective supply chain strategies.
This workshop would provide an overview of the TCO concept, and an introduction to performing a cost breakdown analysis to obtain a better understanding of a business’s cost structure as well as the financial impact on profitability.
- Overview of the TCO concept – identify the cost components of a business.
- Cost breakdown analysis – understand the details of the cost components, and analyse the cost structure of the business operations.
- Big Data applications – using spend analysis to identify how the data for cost components are captured, and the reporting of the business’s cost analysis
- Apply the Kraljic model to review and assess the current sourcing / procurement strategy – the current sourcing and supplier management practices.
- Opportunity Assessment Matrix – identify opportunities for cost savings and improvements
- Determine the appropriate supplier management strategy, from the assessments – using Kraljic model and opportunity matrix
- TCO Analysis – example of a smartphone teardown analysis to estimate the purchase costs for the components.
- Leaders of functional areas who need data analytics to enhance the effectiveness of the business decision making process – analytical tools providing insights for timely and informed decisions. E.g. finance, supply chain, procurement and purchasing.
- Leaders and professionals who need to develop business capabilities to enhance the effectiveness of an organization’s functional business operations – timely communication, easy access and availability of information for decision making.
- Applicable across a diversity of target markets and industries – retail, manufacturing, F&B, aerospace, healthcare, insurance and education
1. Cost structure analysis – identify cost components
a) Spend (cost) analysis – define and understand cost components
- What are the major cost components – identify the individual cost component, and the categorisation of cost components – e.g. what cost components are captured under the overhead category.
- Where do these costs occur – which part of the organisation, or business function, or geographical location
- How are these cost components incurred – what are the business operations or processes that require these cost components
- Who are the major suppliers for the cost components – which business organisation or function, or geographical location, procure / purchase these major cost components
- How are the major cost components being sourced or purchased – e.g. is there a global, regional or local sourcing strategy
- Case Study – Made in China
b) Activity Based Costing
- Detailed cost breakdown analysis –
- spend by business function, location, product line, etc.
- spend by operation or process – including direct labour and material costs for production, logistics (e.g. warehouse, freight or transport) costs.
- Case Study – cost analysis for a production machine
2. Purchasing strategy and practice
a) Review and assess current supply chain strategy – category spend analysis using the Kraljic model
- Review and analysis of the current supply base –
category spend for each category of materials, goods and services – by business function and location
- Determine the type of category the cost component belongs to, using the Kraljic model
- Who and where – e.g. local, regional or global supplier
b) Opportunity Assessment Matrix – identify opportunities for cost savings and improvements
- Including the possibility for consolidation of current supply base globally by product line and location
3. Introduction to TCO – total cost of ownership analysis with cost breakdown for cost items including freight (i.e. transport and delivery), inventory, scrap and wastage.
- Case Study – teardown costing for Apple smartphone
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(payable to TLA)
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Payment will only be required after the course is confirmed.
Payment mode (retail payments facilities are not available) :
Overseas – Telegraphic transfer
Local – Cheque or bank transfer
1 day : 9 am to 6 pm
Peter Loh is an experienced professional in strategic management and MBCI (Market, Business & Competitive Intelligence) for over 20 years, spanning across several industries such as electronics, automotive, telecommunication, oil & gas industries. He has led many cross functional projects which produced valuable insights and critical information to drive strategic decisions.
Peter has an immense passion and interest in business and market development, constantly toying with ideation and is attempting to envisage a converged market, with varying business concepts and models. He is a firm believer of Big Data analysis, applying both quantitative as well as qualitative analysis (i.e. MBCI) to obtain valuable insights and intelligence for informed strategic decisions. Currently, global market leaders have been conceptualizing an Integrated Health Data business model, which he has envisioned for this market.
A Certificate of Attendance will be awarded upon successful completion of the course with 75% attendance.