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Logistic Management: A Cost Reduction Exercise by a Malaysian Automobile Company

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Recent discussions of strategic cost management maintain that cost management efforts should encompass the entire value chain from suppliers to the delivery of finished product to the final customer. Indeed, a number of management accounting studies argue that one of the primary reasons for Japanese manufacturers’ success in cost management efforts is their development of logistic management with suppliers using third party services. This paper examines the implementation logistic management in one of the Malaysian automobile company. Using the explanatory case study method, the case analysis reveals that the interactions between the company and its suppliers in utilizing third party services have transformed into an exercise of cost reduction, in line with its objective of becoming a cost leader. The result shows that the strategic collaboration with its supplier and third party service provider in logistical activities is the critical success factor in gaining its competitive advantage by means of cost reduction.

Document Type: Research Article


Publication date: January 1, 2009

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