Issues in Supply Chain Costing

Introduction There is ample evidence in the literature and in business practice, that the competitive playing field is changing very rapidly. Firms are using the term “Supply Chain” to describe a business process which is focused on relationship outside the enterprise, and in bringing maximum value to the end consumer. This shift from a “zerosum” mentality with vendors and middlemen does not present an easy transition. Embedded infrastructure, rapidly changing technology, deeply rooted culture, and uncertain return all converge to make a dramatically different “go-to-market” strategy a high risk proposition. However, the tidal wave of competition is forcing many companies to consider heroic measures to stay competitive in the marketplace. Some of the very factors that create risk in the transition to a relational supply chain are those factors which are enabling the change. For example, technology has created the possibility of a low cost, efficient, electronic web between buyers, sellers, and third parties in the channel. This process, currently dubbed “Electronic Commerce,” has allowed new competitors to rapidly enter the arena and left old competitors struggling to defend their market position.