Total cost of ownership as a tool for inter-firm cost management: a case in the Belgian utilities industry.

Abstract

In today's environment, communicating what your products and services are worth to customers' business has never been more important. Customers increasingly look at purchasing as a way to increase profits and to reduce costs. To persuade customers to focus on the total costs rather than simply on acquisition price, a supplier must have an accurate understanding of what his customers value. In this case study, we demonstrate how a utility supplier performed a Total Cost of Ownership analysis for one of his customers. The case study offers insights in how an inter-firm Total Cost of Ownership analysis can be beneficial to the buyer as well as to the supplier by optimising and better coordinating the performance of operations across the value chain and by facilitating further initiatives to intensify the buyer-supplier relationship.Product; Purchasing; Costs; Cost; Value; Case studies; Studies; Utilities; Performance; Management; Industry;