When procurement organizations use Total Cost of Ownership to get a complete picture of the overall costs associated with a product or service acquisition, the benefits go beyond just cost reduction over time. Supplier relationships strengthen because they are no longer strained by extreme cost-cutting measures, competitive advantage improves, and the company gains visibility over its overall performance.
This course introduces participants to Total Cost of Ownership (TCO) which is the total cost incurred through the acquisition, use, support, maintenance and ultimate disposal or disengagement of a product and service. It considers both direct and indirect costs and should be determined to ensure like for like comparisons when evaluating proposals and quotes. It is also useful tool to identify cost improvement opportunities through uncovering the hidden cost in the supply chain and during the life cycle of the products and services.
At the end of the course, participants will be able to learn many of the cost factors that need to be identified which are hidden in the price. Uncovering the hidden cost elements requires skill and an understanding of supplier pricing policies and all the cost elements to deliver informed sourcing decisions and effective outcomes.