Prescriptive cost management for lean supply chains: Extending inter-organizational cost management through ratio project planning

Abstract

All rights reserved. Nowadays, companies belonging to global supply chains should rely on the co-operation from suppliers to achieve their business objectives and the required profit levels. Inter-organizational Cost Management (IOCM) means coordinated activities to control and reduce global supply chain costs, which are promoted by buyers, suppliers or both. Ratio Project Planning (RPP) is closely related to IOCM and to Kaizen Costing (KC) and it can be viewed as an extension and a complement of these practices which have a prescriptive nature being focused on “what should we do?” instead on “what has happened?” or “what could have happen?”. This research project was developed in Bosch Car Multimedia located at Braga, Portugal, a world-class manufacturer of electronic products, car radios and car navigation systems. This enterprise has many years of experience on reduction costs, particularly, using RPP.