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- W2138169370 abstract "ABSTRACT We present a general company-wide management information system for defining procurement strategies. We believe that existing practices for determining purchasing strategies can be improved and develop a new approach. The system uses total cost of ownership information. We argue that mathematical programming models should be used for exploiting this information when evaluating the firm's strategic procurement options. Our research method corresponds to the innovation action research concept. Implementations at Usinor, a European multinational steel company, validate our approach by showing an average reduction in total cost of ownership of about 10% for the different product groups considered. INTRODUCTION In today's business world characterized by intense global competition, cost management is an important strategic weapon. External purchases of products and services account generally for more than 60% of the total costs for most companies. Consequently, significant cost savings can be realized by effectively determining procurement strategies. Strange enough, while there has been much attention paid in the accounting literature to activity based management and customer profitability analysis, there has been far less notice taken of purchasing. Considering the importance of external purchases, it is indeed rather surprising that most of today' s activity based costing systems are mainly focused on activities that are related to products, services, departments and customers (Foster and Swenson 1997 ; Swenson 1997) and not on the determination of procurement strategies. In the purchasing literature and in practice we have noticed the existence and use of simple, SUbjective and incomplete approaches for supplier selection (for an overview see Degraeve, Labro and Roodhooft 2000). Indeed, for many years, procurement has been an undervalued activity in its contribution to corporate performance improvement and value for money management. Inadequate planning, poor" @default.
- W2138169370 created "2016-06-24" @default.
- W2138169370 creator A5027799060 @default.
- W2138169370 creator A5030488723 @default.
- W2138169370 creator A5036189055 @default.
- W2138169370 date "2000-01-01" @default.
- W2138169370 modified "2023-09-25" @default.
- W2138169370 title "OEPARTEMENT TOEGEPASTE ECONOMISCHE WETENSCHAPPEN" @default.
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