1. Strategic Cost Management (SCM)
Presenter: Dr Ruvendra Nandan
Professor and Dean, SOBE, UoF

2. Introduction Recent Government budget Global downturn
Manage and control expenditures
Need for strategic cost management approach
A closer look at business strategy
Strategic cost management techniques

3. What is Strategic Cost Management?
Strategy – direction over long term
Strategy concepts: vision, mission, goals, strategies
Major strategic decisions:
what business to operate?
how to compete?
what systems and structures to adopt?
how to fund operations?

4. Stages of Strategic Cost Management

5. Components of SCM

6. Common Strategic Cost Management Techniques
ABC/ABM
Target costing and life cycle ideas
Value engineering
Benchmarking
Just-in-Time purchasing and production
Managing bottlenecks and theory of constraints
Managing cost and quality issues
Strategic performance measurement systems

7. From Supply Chain to Value Chain
Series of links, processes and activities – suppliers and customers
For competitive advantage
Upstream, primary, downstream processes and activities
Think of the value chain in Fijian Hotel Industry or a big 4 accounting firm or a private hospital

8. From Value Chain to Extended Value Chain

9. Relationship Between Trust and Information
Trust - a very soft and fragile concept !
Confidence that expectations will be realised – people as well as things (accounting systems)
Capacity to act otherwise is always there
Nature of social bonds, trust and the need for information
Fundamental to social and organisational life
The concept of Trust and its link with information within relationships

10. Trust and Information Needs
Inverse relationship between information and the level of trust
Request for excessive information may reduce trust
More information may be needed to create more trust early in the life cycle
Whatever the level of trust, information may still be needed in a collaborative relationship

11. Relationship Between Trust and Information

12. Summary and Conclusion
Business environment – complex and unpredictable
Global, regional and local forces operate
Government regulations and budget
Implications for the business world
Customer value and shareholder value for long-term survival
MACS to support strategy