Total Cost of Ownership


From my experience, most companies (small, medium and large...domestic and international, etc.) measure and reward based on silo-performance.
Transportation departments are typically challenged to bring costs down 5% YOY. Same w/Purchasing, Warehousing, etc. If I am a Transportation Manager, I would make 1-TL shipment weekly. Manufacturing and Warehouse Managers would prefer hourly (in high volume) deliveries (via small package, LTL, etc.).
Does anyone know of any companies that are truly "Best-in-class" of KPI's tied to Total Cost of Ownership? If so, what tools (systems) are used to support the volume of data?

Andy Lukoff
10 months ago

1 answer


Andy, I think you are totally right. All functions involved in the supply chain may have divergent objectives. Unfortunately I haven't seen so far a real KPI taking care of Total Cost of Ownership (TCO).
What's existing nethertheless are:
TCO crietria proposed and used by Sourcing in the slection process, but they are not systematically measured and reported during the implementation,
Processes (idea generation, business case, design, implementation, measurement) to implement multi-functional initiatives in terms of sales increase, cost cutting or process optimisation, but they are based on individual cases.

Patrice L. Tiolet, INPG, MBA, CPSM
10 months ago

Have some input?