Beyond Total Cost of Ownership
Strategic Sourcing for Value
There are many types of strategic sourcing decisions, including make vs. buy, offshore vs. onshore, and selecting between suppliers or vendors in various locations. In most of these cases, the decisions involve multiple relevant dimensions and are made under both uncertainty and risk.
Some performance dimensions, like per-unit cost and shipping, are relatively easy to measure. Harder-to-evaluate factors such as future innovation capability and responsiveness, are often more important than cost.
In this half-day workshop, Professors Gray and Helper will take participants through the following topics:
- Evolution of the sophistication of decision making in procurement, from per-unit price, to total landed cost, to total cost of ownership (TCO)
- Challenges of implementing TCO-based decision making in practice
- Tools to incorporate measurable risk in decision making, including an introduction to Monte Carlo simulation
- Tools to incorporate uncertainty, or non-measurable dimensions, including a discussion of heuristic decision making
- A new approach to sourcing decision-making that addresses many of the challenges inherent in TCO
This will be an interactive half-day session, targeted toward sourcing, procurement, purchasing, and supply chain managers. General managers will also benefit from the insights.
Presenters
John Gray is an associate professor of operations at the Fisher College of Business at Ohio State. He joined Fisher after receiving his PhD from the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill. Prior to pursuing his PhD, he worked for eight years in operations and supply chain management at Procter & Gamble, receiving an MBA from Wake Forest University’s evening program during that time. He holds two undergraduate degrees from Dartmouth College and its Thayer School of Engineering. Dr. Gray has taught both core MBA Data Analysis class and an MBA and undergraduate elective called Strategic Global Sourcing, which he developed in 2007. He has a widely-adopted case (Scotts Miracle-Gro: The Spreader Sourcing Decision) which highlights a strategic sourcing decision-making process that considers more than just cost. Dr. Gray’s research is linked to his teaching, in that it focuses on hidden risks and benefits to outsourcing and offshoring.
Susan Helper is the Frank Tracy Carlton Professor of Economics at the Weatherhead School of Management at Case Western Reserve University. She was formerly Chief Economist at the U.S. Department of Commerce and a member of the White House Staff. She has served as chair of the Economics Department, and has been a visiting scholar at University of Oxford, the University of California (Berkeley), Harvard University and the Massachusetts Institute of Technology (MIT). Her research focuses on the globalization of supply chains, and on how U.S. manufacturing might be revitalized. Dr. Helper received her PhD in Economics from Harvard and her BA from Oberlin College in Economics, Government and Spanish.
| When: | TBD |
|---|---|
| Where: | Ohio State University Fisher College of Business |
| PRice: | 1-2 attendees: $475/person 3+ attendees: $425/person |
| Registration: | TBD |
For more information on the program, contact Professor John Gray at gray.402@osu.edu or 614-247-8021.