Abstract
Supply Chain Management (SCM) is identified and accepted as a competitive advantage. Nevertheless holistic approaches for value-based SCM to leverage this advantage in a value adding way are missing so far. Efficient approaches to quantify and compare value contributions from Supply Chain (SC) value drivers are needed. This paper contributes to this need by proposing a model to efficiently quantify and compare value contributions from SC cost and working capital, that affect the profitability and asset performance. Properties and characteristics of the model, which is based on the Discounted Cash Flow concept, are illustrated by an industrial example of a single company. In this example, the relevance of timing and continuity of developments of SC cost and working capital for value creation is pointed out.
Access provided by Autonomous University of Puebla. Download to read the full chapter text
Chapter PDF
Similar content being viewed by others
Keywords
References
Brealey, R.A., Myers, S.C., Allen, F.: Principles of Corporate Finance. McGraw-Hill, New York (2008)
Christopher, M.: Logistics and Supply Chain Management - Creating Value-Adding Networks, 3rd edn. Prentice Hall, Harlow (2005)
Christopher, M., Ryals, L.: Supply Chain Strategy: Its Impact on Shareholder Value. The International Journal of Logistics Management 10(1), 1–10 (1999)
Christopher, M., Gattorna, J.: Supply chain cost management and value-based pricing. Industrial Marketing Management 34, 115–121 (2005)
Cohen, S., Roussel, J.: Strategic Supply Chain Management - The five Disciplines for Top Performance. McGraw-Hill, New York (2005)
Copeland, T., Koller, T., Murrin, J.: Valuation: Measuring and Managing the Value of Companies. Wiley, New York (1996)
Damodaran, A.: Valuation approaches and metrics: a survey of the theory and evidence, http://www.stern.nyu.edu/~adamodar/pdfiles/papers/valuesurvey.pdf
Geginat, J., Morath, B., Wittmann, R., Knüsel, P.: Kapitalkosten als strategisches Entscheidungskriterium. Roland Berger Strategy Consultants, München (2006)
Grinyer, J.: Earned economic income: a theory of matching. Abacus, 43–54 (March 1985)
Handfield, R.B., Nichols, E.L.: Introduction to Supply Chain Management. Prentice-Hall, Upper Saddle River (1999)
Hawawini, G., Viallet, C.: Finance for Executives - Managing for Value Creation, 2nd edn. South-Western, Mason (2002)
Hendricks, K.B., Singhal, V.R.: The effect of supply chain glitches on shareholder wealth. Journal of Operations Management 21, 501–522 (2003)
Henkel KGaA, Annual Reports 2003-2008, http://www.henkel.de/investor-relations/downloads-archiv-10481.htm
Hofmann, E., Locker, A.: Value-based performance measurement in supply chain: a case study from the packaging industry. Production Planning & Control 20(1), 68–81 (2009)
Lambert, D.M., Burduroglu, R.: Measuring and Selling the Value of Logistics. The International Journal of Logistics Management 11(1), 1–17 (2000)
Lambert, D.M., Pohlen, T.L.: Supply Chain Metrics. The International Journal of Logistics Management 12(1), 1–19 (2001)
Lee, T.Y.S.: Supply Chain Risk Management. International Journal of Information and Decision Science 1(1), 98–114 (2008)
Madden, B.J.: The CFROI Valuation Model. The Journal of Investing 7(1), 31–44 (1998)
Malmi, T., Ikäheimo, S.: Value Based Management practices-some evidence from the field. Management Accounting Research 14(3), 235–254 (2003)
Mentzer, J.T., DeWitt, W., Keebler, J.S., Min, S., Nix, N.W., Smith, C.D., Zacharia, Z.G.: Defining Supply Chain Management. Journal of Business Logistics 22(2), 1–25 (2001)
Ottosson, E., Weissenrieder, F.: Cash Value Added - a new method for measuring financial performance. Gothenburg Studies in Financial Economics 1. Gothenburg University, Gothenburg (1996)
Poston, R., Grabinski, S.: Financial impacts of enterprise resource planning implementations. International Journal of Accounting Information Systems 2, 271–294 (2001)
Rappaport, A.: Creating Shareholder Value. The Free Press, New York (1998)
Ritchie, B., Brindley, C.: Supply chain risk management and performance - A guiding framework for future development. International Journal of Operations and Production Management 27(3), 303–322 (2007)
Ross, S.A., Westerfield, R.W., Jaffe, J.F.: Corporate Finance, 6th edn. McGraw-Hill, New York (2002)
Schilling, G.: Working Capital’s Role in Maintaining Corporate Liquiditiy. TMA Journal, 4–7 (September/October 1996)
Seuring, S., Goldbach, M. (eds.): Cost Management in Supply Chains. Physica-Verlag, Heidelberg (2001)
Shepherd, C., Günter, H.: Measuring supply chain performance: current research and future directions. International Journal of Productivity and Performance Management 55(3/4), 242–258 (2006)
Sridharan, U.V., Caines, W.R., Patterson, C.C.: Implementation of supply chain management and its impact on the value of firms. Supply Chain Management: An International Journal 10(4), 313–318 (2005)
Stewart, G.B.: The Quest for Value: the EVA Management Guide. HarperBusiness, New York (1991)
de Wet, J.H.v.H.: EVA versus traditional accounting measures of performance as drivers of shareholder value - A comparative analysis. Meditari Accountancy Research 13(2), 1–16 (2005)
Suang, H., Wang, L.: The status and development of logistics cost management: evidence from Mainland China. Benchmarking: An International Journal 16(5), 657–670 (2009)
Weber, J., Bramsemann, U., Heineke, C., Hirsch, B.: Wertorientierte Unternehmenssteuerung: Konzepte - Implementierung - Praxisstatements. Gabler, Wiesbaden (2004) (in German)
Winkler, H., Kaluza, B.: Integrated Performance- and Risk Management in Supply Chains - Basics and Methods. In: Kersten, W., Blecker, T. (eds.) Managing Risks in Supply Chains - How to Build Reliable Collaboration in Logistics. Erich Schmidt Verlag, Berlin (2006)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2010 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Brandenburg, M., Seuring, S. (2010). A Model for Quantifying Impacts of Supply Chain Cost and Working Capital on the Company Value. In: Dangelmaier, W., Blecken, A., Delius, R., Klöpfer, S. (eds) Advanced Manufacturing and Sustainable Logistics. IHNS 2010. Lecture Notes in Business Information Processing, vol 46. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-12494-5_10
Download citation
DOI: https://doi.org/10.1007/978-3-642-12494-5_10
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-12461-7
Online ISBN: 978-3-642-12494-5
eBook Packages: Computer ScienceComputer Science (R0)