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Contents

Foreword by Theresa Metty xi

Preface by Dave Nelson xv

Acknowledgments xix

1. Introduction 1

2. The AIM & DRIVE Process of Cost Management 7

3. Agreeing on the Need to Manage Costs 29

4. Identifying Critical Costs in the Supply Chain 55

5. Measuring Secondary and Tertiary Costs 79

6. Defining the Key Cost Drivers and Developing Strategic Options 101

7. Reducing, Eliminating, or Changing Activities That Cause Costs 123

8. Implementing an Action Plan 161

9. Verifying the Plan with Cost Monitors 185

10. Eternally Improving and Leveraging the Process 205

Index 225

For most supply chains, cost reduction is imperative to long-term survival. Yet identifying the costs that can be eliminated---and then doing so effectively---can prove impossible without the right method. This book introduces the same process the author has used to save companies like IBM, Kodak, and DuPont billions of dollars, simply by harnessing the knowledge of suppliers

For most supply chains, cost reduction is imperative to long-term survival. Yet identifying the costs that can be eliminated--and then doing so effectively--can prove impossible without the right method. This book introduces the same process the author has used to save companies like IBM, Kodak, and DuPont billions of dollars, simply by harnessing the knowledge of suppliers. Using real-life case studies and examples, the book takes readers step-by-step through the process, showing them how to move beyond negotiation and: - identify critical costs in the supply chain - measure secondary and tertiary costs - develop strategic options - reduce, change, or eliminate activities that produce costs - implement an action plan - verify the plan with cost monitors - continually improve and modify the process The book gives readers everything they need to implement this powerful system, and bring genuine and permanent savings to their company.