Zero Based costing for suppliers
Refer to the article link by McKinsey & Company - Matt Jochim, Rehana Khanam, Cecilia Martensson, and Curt Mueller. In our new system development context, we can utilise the information about zero based productivity.
https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-productivity-going-granular-and-end-to-end-across-the-supply-chain
But what exactly we shall provide? In my opinion, suppliers should provide cost based on all the four factors mentioned. By using periodic regional surveys and data, we can set a benchmark for each category. This information will be useful for a customer to set a base for their purchasing price.
Moreover, if the customer has implemented zero based productivity system at his organization, it will help that organization monitor the value of component versus value of warehousing. Organization can use such information to transfer the component to a third party for storage and in turn can make their value chain efficient
Professionals, requesting you to respond to my opinion about including such system for development of ‘supplier performance monitoring system’. We can build it to the next level by incorporating your thoughts.
Reference
Jochim, M., Khanam, R., Martensson, C., and Mueller, C. (2019). Zero-based productivity: Going granular and end-to-end across the supply chain. Retrieved from https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-productivity-going-granular-and-end-to-end-across-the-supply-chain
