Measuring supply chain cost

Organisations focus on reducing costs in their supply chains to increase net income. In order to reduce costs a company needs to know how to measure Supply Chain Cost (SCC). This paper is concerned with SCC and how measurements of SCC are and can be used in industry. The paper describes a suggested model for measuring SCC. Representatives from 30 companies in 10 different business sectors are interviewed about how they measure costs in their supply chains compared against this model. The focus is also on identifying the difference between SCC based on estimated standard cost compared to actual cost. A case study describes and shows the difference between measuring SCC based on calculated standard cost and measuring it based on actual cost. Our studies show that general thorough cost and supply chain analyses in many companies can be improved and further developed. (C) 2012 Elsevier B.V. All rights reserved.