Strategic Cost and Value Management in the Supply Chain

Strategic Cost and Value Management in the Supply Chain


This training course explores the key concepts of Strategic Cost/Price Analysis, Value Analysis, and Total Cost of Ownership that will move today’s organization to the strategic focus needed to achieve world-class performance. This training course will look at how to deliver price reduction, cost reduction and cost avoidance in modern organisations.

Strategic cost management is vital and increasingly important for all organisations. As global economic conditions place an increased focus on cost reduction to maintain profitability, it is essential that costs are managed in ways that ensure continued performance in strategic areas, and increase value for the organisation and stakeholders overall. This training course leads delegates through development and implementation of carefully crafted strategies for managing costs while improving quality and productivity.

This training course will feature:

  • Setting strategies for world class strategic cost management
  • Maximising value for money
  • Examining costs drivers
  • Improving profitability by controlling total costs
  • Understanding and managing supplier pricing models


By the end of this training course, participants will be able to:

  • Identify the major costs drivers to recommend cost control measures and strategies
  • Analyse the Elements of Cost In Supplier’s Price
  • Evaluate total life cycle costs
  • Analyse costs within the organisation
  • Create an approach to Strategic Cost management

Training Methodology

This training course will utilise a variety of proven highly interactive adult learning techniques to ensure maximum understanding, comprehension and retention of the information presented. The training course is highly interactive and will prompt delegates to reflect on their current practices and goals. The instructor will guide and facilitate learning using a wide range of methods including direct input, discussions, case studies and exercises in groups and pairs.

Organisational Impact

  • Understand the impact of Cost Management in Supply Chains
  • Understand how cost/management accounting information affects the strategic and operational decisions within the organization
  • Understanding of profitability of key customers, and how this effects strategic cost management in the supply chain
  • Evaluate how the strategies in place are delivering quantifiable value to the organisation
  • Analyze an organization’s current spend strategy
  • Understand the need for change to more strategic and innovative approaches

Personal Impact

  • Be aware of the range of strategies available to achieve cost reduction / value realisation objectives
  • Understand the rationale required for a cost reduction strategy
  • Implement strategies to work with the supply chain to reduce costs in a pragmatic way
  • Conduct spend analysis on all categories
  • Implement long term saving initiatives
  • Evaluate suppliers - developing key measures for a total cost and value approach

Who Should Attend?

This training course is suitable to a wide range of professionals but will greatly benefit the following individuals who belong in the Oil, Gas & Petrochemicals Industry:

  • Purchasing, Procurement, Contracts, Contract Administration, Projects personnel
  • Professionals who are engaged in planning either at strategic or operational level
  • Professionals who are responsible for the management of costs
  • Those engaged in the management or operation of projects
  • Those responsible for developing, managing or working with budget/cost constraints
  • Those with an interest in strategic planning and costs management

Seminar Outline


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 – Analysing 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


Driving Cost Out – Supplier Engagement and Cost Elimination

  • Inventory, warehousing and shipping costs inc. Economic Order Quantity
  • Cost-Volume-Profit Analysis and Break-Even Analysis
  • Cost engineering
  • Fixed and Variable Costs Defined
  • Checking Supplier Value
  • Profit and risk sharing
  • What-if Analysis to build scenarios and Test Sensitivity


Implementing and Measuring Strategic Cost Management

  • Barriers to Strategic Cost Management
  • Key Performance Metrics
  • Cost cutting traps and how to avoid them
  • Types of Budgets, their Purpose/Benefits & Problems & Limitations
  • Types of Controls - Personnel Action & Results Controls


A Certificate of Completion will be issued to those who attend & successfully complete the programme.


  08:30 – 10:15 First Session

 10:15 – 10:30 Coffee Break

10:30 – 12:15 Second Session

 12:15 – 12:30 Coffee Break

12:30 – 14:00 Third Session

 14:00 – 15:00 Lunch


 The Fee for the seminar, including instruction materials, documentation, lunch, coffee/tea breaks & snack is: