Total cost of procurement - Analysis of current awareness and model considerations for adoption and efficient utilization
Leppänen, Niko (2018)
Kuvaus
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Tiivistelmä
Globalization has changed the operating environment for many organizations within manufacturing industries. To remain competitive, most of the organizations have decided to focus on their key competencies, while other activities have been outsourced to external suppliers. As a result, the value of externally procured components and services has increased when compared to the total value of produced goods. Different approaches have been suggested in literature for organizations to measure and evaluate costs re-lated to external procurement.
Objective of this thesis is to identify how case organization can develop and improve its measurement and evaluation practices related to total cost of procurement within supply management framework. The theoretical framework for the thesis is based on management literature and academic publications related to procurement and total cost of ownership, which were then combined to total cost of procurement concept. To reach the research objective, organizations existing procurement cost measurement practices and awareness related to total cost of procurement concept was studied and evaluated. To collect the relevant research data, qualitative and quantitative research methods were applied.
As a managerial contribution of the thesis, improvement activities and development opportunities are recommended for case organization. The improvements mainly include enhancements to procurement cost data availability and accuracy. Positive attitude to-wards total cost of procurement within respondents was highlighted as an enabler for adoption. Finally, it was proposed that a proof of concept for measurement model should follow this thesis to determine if actual model can be built according to the proposed concept.
Objective of this thesis is to identify how case organization can develop and improve its measurement and evaluation practices related to total cost of procurement within supply management framework. The theoretical framework for the thesis is based on management literature and academic publications related to procurement and total cost of ownership, which were then combined to total cost of procurement concept. To reach the research objective, organizations existing procurement cost measurement practices and awareness related to total cost of procurement concept was studied and evaluated. To collect the relevant research data, qualitative and quantitative research methods were applied.
As a managerial contribution of the thesis, improvement activities and development opportunities are recommended for case organization. The improvements mainly include enhancements to procurement cost data availability and accuracy. Positive attitude to-wards total cost of procurement within respondents was highlighted as an enabler for adoption. Finally, it was proposed that a proof of concept for measurement model should follow this thesis to determine if actual model can be built according to the proposed concept.