What do we look at?

Total Acquisition Cost Model
Cross-Functional collaboration is essential for reducing Total Acquisition Costs
Lower cost specification Optimal service level Design for manufacturing Design for assembly Value analysis Value Engineering Cooperative purchasing/ alliances Common specification Leverage Contract consolidation Partnerships Supplier development Long-term agreements

e tur uc str ase Re ly B pp Su se rea ion nt Inc etit me mp ge Co na e Ma tur se s uc Ba str hip ly Re tions pp la Su Re

Co ns Pu ol rc ha Sp idate se en d De ma nd Im Ma Sp pro v ec na ific e ge ati me on nt

Co Red u ns um ce pti on

Eliminate need Policy / Budget changes Extend Life

Cost Cash Quality Service Innovation

Bid-based renegotiations Reverse Auctions Price/performance benchmarking Model “should-costs”

Volume redistribution Global Procurement Make / Buy

Total cost management

Optimize Total Reduce Total Life cycle Reduce/Eliminate Supply Chain Costs /Ownership Costs Transactions

Optimize physical material flow Integrate logistics Reduce Inventory Taxation / Duties / Customs Transport Packaging

Lease / Buy Tooling / Prototypes Maintenance / Spares Warranty / Life Non recurring

E-Procurement Trading exchanges Rationalize part count and suppliers ERP/ P-Card

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