Skip to main content

A Model for Quantifying Impacts of Supply Chain Cost and Working Capital on the Company Value

  • Conference paper
Advanced Manufacturing and Sustainable Logistics (IHNS 2010)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 46))

Included in the following conference series:

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.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Brealey, R.A., Myers, S.C., Allen, F.: Principles of Corporate Finance. McGraw-Hill, New York (2008)

    Google Scholar 

  2. Christopher, M.: Logistics and Supply Chain Management - Creating Value-Adding Networks, 3rd edn. Prentice Hall, Harlow (2005)

    Google Scholar 

  3. Christopher, M., Ryals, L.: Supply Chain Strategy: Its Impact on Shareholder Value. The International Journal of Logistics Management 10(1), 1–10 (1999)

    Article  Google Scholar 

  4. Christopher, M., Gattorna, J.: Supply chain cost management and value-based pricing. Industrial Marketing Management 34, 115–121 (2005)

    Article  Google Scholar 

  5. Cohen, S., Roussel, J.: Strategic Supply Chain Management - The five Disciplines for Top Performance. McGraw-Hill, New York (2005)

    Google Scholar 

  6. Copeland, T., Koller, T., Murrin, J.: Valuation: Measuring and Managing the Value of Companies. Wiley, New York (1996)

    Google Scholar 

  7. Damodaran, A.: Valuation approaches and metrics: a survey of the theory and evidence, http://www.stern.nyu.edu/~adamodar/pdfiles/papers/valuesurvey.pdf

  8. Geginat, J., Morath, B., Wittmann, R., Knüsel, P.: Kapitalkosten als strategisches Entscheidungskriterium. Roland Berger Strategy Consultants, München (2006)

    Google Scholar 

  9. Grinyer, J.: Earned economic income: a theory of matching. Abacus, 43–54 (March 1985)

    Google Scholar 

  10. Handfield, R.B., Nichols, E.L.: Introduction to Supply Chain Management. Prentice-Hall, Upper Saddle River (1999)

    Google Scholar 

  11. Hawawini, G., Viallet, C.: Finance for Executives - Managing for Value Creation, 2nd edn. South-Western, Mason (2002)

    Google Scholar 

  12. Hendricks, K.B., Singhal, V.R.: The effect of supply chain glitches on shareholder wealth. Journal of Operations Management 21, 501–522 (2003)

    Article  Google Scholar 

  13. Henkel KGaA, Annual Reports 2003-2008, http://www.henkel.de/investor-relations/downloads-archiv-10481.htm

  14. 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)

    Article  Google Scholar 

  15. Lambert, D.M., Burduroglu, R.: Measuring and Selling the Value of Logistics. The International Journal of Logistics Management 11(1), 1–17 (2000)

    Article  Google Scholar 

  16. Lambert, D.M., Pohlen, T.L.: Supply Chain Metrics. The International Journal of Logistics Management 12(1), 1–19 (2001)

    Article  Google Scholar 

  17. Lee, T.Y.S.: Supply Chain Risk Management. International Journal of Information and Decision Science 1(1), 98–114 (2008)

    Article  Google Scholar 

  18. Madden, B.J.: The CFROI Valuation Model. The Journal of Investing 7(1), 31–44 (1998)

    Article  MathSciNet  Google Scholar 

  19. Malmi, T., Ikäheimo, S.: Value Based Management practices-some evidence from the field. Management Accounting Research 14(3), 235–254 (2003)

    Article  Google Scholar 

  20. 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)

    Google Scholar 

  21. Ottosson, E., Weissenrieder, F.: Cash Value Added - a new method for measuring financial performance. Gothenburg Studies in Financial Economics 1. Gothenburg University, Gothenburg (1996)

    Google Scholar 

  22. Poston, R., Grabinski, S.: Financial impacts of enterprise resource planning implementations. International Journal of Accounting Information Systems 2, 271–294 (2001)

    Article  Google Scholar 

  23. Rappaport, A.: Creating Shareholder Value. The Free Press, New York (1998)

    Google Scholar 

  24. 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)

    Article  Google Scholar 

  25. Ross, S.A., Westerfield, R.W., Jaffe, J.F.: Corporate Finance, 6th edn. McGraw-Hill, New York (2002)

    Google Scholar 

  26. Schilling, G.: Working Capital’s Role in Maintaining Corporate Liquiditiy. TMA Journal, 4–7 (September/October 1996)

    Google Scholar 

  27. Seuring, S., Goldbach, M. (eds.): Cost Management in Supply Chains. Physica-Verlag, Heidelberg (2001)

    Google Scholar 

  28. 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)

    Article  Google Scholar 

  29. 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)

    Article  Google Scholar 

  30. Stewart, G.B.: The Quest for Value: the EVA Management Guide. HarperBusiness, New York (1991)

    Google Scholar 

  31. 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)

    MathSciNet  Google Scholar 

  32. 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)

    Article  Google Scholar 

  33. Weber, J., Bramsemann, U., Heineke, C., Hirsch, B.: Wertorientierte Unternehmenssteuerung: Konzepte - Implementierung - Praxisstatements. Gabler, Wiesbaden (2004) (in German)

    Google Scholar 

  34. 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)

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints 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)

Publish with us

Policies and ethics