I am writing to inform you about the stages of life cycle stages in evaluating the cost of ownership. The issue is on the agenda now since there is a great necessity to analyzed all the assets and liabilities of the ownership, as controlling the total cost provides the company to consider such aspects as budgeting and capital management. The analysis is also urgent, as an accurate assessment of the hidden assets of a company will significantly foster successful management and decision-making process. The staff has to consider all assets resulting from costing.
First of all, it is obligatory to assess the capital investments to evaluate the business opportunities and the major revenues. Please pay attention to this point, as it is basis of organization and defined the economic stability of the company. Therefore, the company should strive to achieve the balance between investments, production, and revenues (Turner 2004). It is especially important due to the rise of customer demand. In that respect, you should find some alternative ways for investment growth. In that regard, please, consider the price policy and cost-efficiency of the existed products and analyze budget planned for the new launching.
Secondly, take a close consideration to the methods of life cycle cost of ownership and single out what measures should be taken for the improvement of financial planning and cost control (Siegel et al. 2006). The cost of ownership requires an understanding of the supply chain management and the stages of life cycle. The primary concern of the management is to analyze the preliminary stage of acquisition to avoid extra expenditures. This major stage demands urgent and consistent decisions so that the company could eliminate further losses. In that regard, the managerial department must be aware of future losses in case the company decides to purchase the equipment, hardware, or software.
The next stage requires the analysis system procurement where the team member should consider the target cost of the present and planned ownership. In this case, acquisition requires a thorough examination at this stage so that the staff must draw their attention to the needs of the acquired real estate. To do that, the working team must make a detailed research of the market that would grant possibility to estimate the financial limitations. In addition, it is important to gather data concerning other manufacturers. That stage would guarantee the effectiveness of outsourcing operations. The last stage, which is the use stage implies the design and manufacture taking into account the previous examples (Jones 2006).
The effectiveness of assessment of supply chain management should be carried out by using the incorporated knowledge of the team. I would to the most of attention to that point as it includes planning, sourcing, making, and delivering that excludes the individual work (Hugos 2006). Secondly, please draw attention to the appropriate way to conform the supply chain to business strategy. This is especially important if to consider the outsourcing decision that is not possible to make individually. Regarding the current situation, you should resort to the incorporate policy to put forward a comprehensive analysis of total life costs for the fulfillment of the operations. Because Blue Jay’s economic situation has been rapidly improved, your analysis must contain an overall examination of all the departments’ activities for the manufacturing process and new product assembly lines.
The devised concept proves its efficiency by numerous examples. Hence, many advanced companies use the methods of detailed planning and sourcing in supply chain management where incorporate knowledge is crucial. In that regard, most companies that specialize in mobile phone manufacturing tend to introduce the life-cycle costs to a supply chain management that greatly contributes to in-house revenues increase. Moreover, it is beneficial to the outsourcing companies owing to the industrial revolution and thus constant emergence of corporations. The partnership approach and incorporate efforts are profitable both for the buyers and for the suppliers. For instance, one of the biggest companies, Motorola, applied supply chain strategies considering the cost of the ownership and acquisition process. By simplifying the product line and introducing the cost analysis, Motorola was significantly advanced in producing; this approach allowed the manufacturers to promote their key product in the most effective way. The evidence showed that the company managed to facilitate the market research due to the segment narrowing. In addition, the supply chain production excludes the producer from additional inventory. Furthermore, the introduction of life cycle cost analysis grants the possibility to avoid excessive expenditures and losses, as the product can be easily resold. Finally, supply chain management makes the production process less time-consuming (Blanchard 2007).
As practice shows, the supply chain management integration is successfully applied in the manufacture. In our case, the introduction of the life cost of owner will ameliorate the company’s profitability and promote the production and design at the upper stage. Therefore, Blue Jay Company’s new approach is rather appropriate. Hence, the previous points should be immediately put into practice.
Reference List
Blanchard, D. (2007). Supply Chain Management: best practices. US: John Wiley and Sons.
Hugos, H. M. (2006). Essentials of supply chain management. US: John Wiley and Sons.
Jones, J. V. (2006). Integrated logistics support handbook. US: McGraw-Hill Professional.
Siegel, J. G. & Shim, J. K. (2006). Accounting Handbook. US: Barron’s Educational Series.
Turner, W. C. (2004). Energy management handbook. US: CRC Press.