Training on Strategic Cost and Value Management in Procurement
Strategic cost management is critical for all firms and is becoming increasingly significant. As global economic conditions raise the emphasis on cost reduction to sustain profitability, expenses must be managed in ways that assure continued performance in vital areas while also increasing value for the business and stakeholders overall. This supply chain training program on strategic cost and value management guides participants through the creation and application of well-thought-out cost-management strategies that also boost quality and productivity.
Target Participants
This course is ideal for supply chain and procurement professionals, project managers, finance staff, operational staff, government officials, and any other professionals who want to build their skills in supply chain management.
Course Duration
Online 7 Days
Classroom-based 5 Days
What you will learn
By the end of this course the participants will be able to:
- Identify the major costs drivers to recommend cost control measures and strategies
- Understand how cost and management accounting information affects the strategic and operational decisions within the organization
- Understand and manage supplier pricing models
- Maximize value for money
- Improve profitability by controlling total costs
Understanding the Value Proposition of Procurement to an Organization
- Linking organization and procurement objectives
- KPIs to measure procurement performance
- Procurement organizational structures
- Common requisition-to-pay and contract management systems
- Private and public procurement policies
Setting the Strategic Direction
- The strategic planning process & models
- Porter’s 5 forces model
- Routes to competitive advantage
- Price, cost, and value
- Essential cost drivers and potential savings
- Stages to world-class cost management
Price Down – Understanding and Managing Price
- Supplier pricing models
- Krajlic supply positioning matrix
- Methods of price analysis
- Strategies and tactics
- Competition and partnership – routes to better pricing
Cost Down – Analyzing and Managing Internal and Supplier Costs
- Total cost of ownership/life cycle costing
- Methods of cost analysis
- Major elements of cost
- What and how important are supplier overheads?
- Sources of cost information
- Logistics costs
Driving Cost Out – Supplier Engagement and Cost Elimination
- Inventory, warehousing, and shipping costs including economic order quantity
- Cost-volume-profit analysis and break-even analysis
- Cost engineering
- Fixed and variable costs defined
- Contract Performance Management
- Checking supplier value
- Profit and risk sharing
- What-if analysis to build scenarios and test sensitivity
Implementing Strategic Cost Management
- Barriers to strategic cost management
- Cost-cutting traps and how to avoid them
- Types of budgets, their purpose & limitations
- Types of controls – personnel action & results controls
- Tools and Techniques in Decision Making
