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Strategic Performance Measurement of Suppliers at HTC

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The case introduces students to the concept of supplier management with scorecard and other performance measures and the concept of Total Cost of Ownership The purpose of this case is to enhance the student's understanding of the role of performance measures in the inter organizational setting - buyer supplier partnerships. In particular their role in managing the purchase allocation decision made by the buyer. · The role of management accounting information in the purchase allocation decision is explained by the total cost of ownership concept. · Purchase allocation decisions are made with respect to various factors including past performance, strategic importance and inventory requirements · Understanding the extent to which these factors are in play in the purchase allocation decision by buyers is important to the development of modern management systems in settings where there is increased outsourcing of non-core value added activities. As more parts of the global supply chain are being located in China, greater responsibility falls on the management to adopt systems that can help them to manage and satisfy international standards for delivery and quality.

Learning Objective:

1.The primary objective of the case is to familiarize management (and accounting) students with the principles of strategic performance measurement and total cost of ownership as it is applied in the supplier management setting.2.The secondary objective of this case is to evaluate the approach adopted by HTC to use performance measurement information to make decisions about suppliers.

Year of Publication: 2011
Ref. No.: 11/482C
Discipline: Accounting & Control, Production & Operations Management
Industry: Consumer Electronics
Country: China (People's Rep. of)
Company: HTC
Languages: English, Italian
Pages of Text: 13