CALCULATING TOTAL COST OF OWNERSHIP TO IMPROVE STRATEGIC SOURCING DECISIONS

Ensuring that component costs align with organizational goals is a key function of sourcing, but comprehending the breadth of information that must be taken into account when calculating the total cost of supplied products can be challenging. Determining total cost enables sourcing to develop accurate cost models around components and reduce expenditure over time by making stronger procurement decisions. Clarifying product attributes that have the strongest impact on total cost will improve procurement ability to pinpoint attributes that indicate potentially increased costs down the road as a result of quality issues or import restrictions.

• Determining total cost of ownership prior, during and after sourcing new components
• Identifying factors impacting total cost, such as tax, shipping costs, regulatory, and risk
• Utilizing total cost calculations to aid decision making and select preferable components

Speaker:
Jon Behm
Vice President, Strategic Sourcing
Cardinal Health