Strategic Cost Management in Supply Chains, Part 1: Strucural Cost Management

Shannon W. Anderson, Henri Dekker

Research output: Contribution to journalComment/debateResearchpeer-review


Strategic cost management is the deliberate alignment of a firm's resources and associated cost structure with long-term strategy and short-term tactics. Although managers continue to pursue efficiency and effectiveness within the firm, increasingly improvements are obtained across the value chain: through reconfiguring firm boundaries, relocating resources, reengineering processes, and re-evaluating product and service offerings in relation to customer requirements. In this first paper in a two-part series on strategic cost management in supply chains, we review structural cost management. Structural cost management employs tools of organizational design, product design, and process design to create a supply chain cost structure that is coherent with firm strategy. In the second part of the series we will consider executional cost management, which employs measurement and analysis tools e.g., variance analysis, cost driver analysis, supplier scorecards to evaluate supply chain perfor- mance. Using selected studies in accounting, operations management, and business strategy, we provide an overview of strategic cost management in supply chains, highlight contemporary developments, and suggest directions for future research.
Original languageEnglish
JournalAccounting Horizons
Issue number2
Pages (from-to)201-220
Number of pages20
Publication statusPublished - 2009
Externally publishedYes


  • Interorganizational
  • Supplier
  • Supply chain management
  • Value chain

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