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2023/2024  KAN-CCMVV1725U  Performance Measurement in Procurement Organizations

English Title
Performance Measurement in Procurement Organizations

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Quarter
Start time of the course First Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for cand.merc. and GMA (CM)
Course coordinator
  • Melanie Lucia Feldhues - Department of Accounting (AA)
Main academic disciplines
  • Managerial economics
  • Accounting
  • Supply chain management and logistics
Teaching methods
  • Blended learning
Last updated on 15-02-2023

Relevant links
Learning objectives
  • Understand and explain the relationship between different roles of procurement and analysis techniques rooted in management accounting.
  • Explain how management accounting methods can be applied to solving specific decision problems within procurement.
  • Critically reflect on financial and non-financial performance metrics and evaluate in which context they are suitable to manage the procurement function.
  • Recommend courses of action to management with respect to the performance measurement system of their procurement organization.
Examination
Performance Measurement in Procurement Organizations:
Exam ECTS 7,5
Examination form Oral exam based on written product

In order to participate in the oral exam, the written product must be handed in before the oral exam; by the set deadline. The grade is based on an overall assessment of the written product and the individual oral performance, see also the rules about examination forms in the programme regulations.
Individual or group exam Oral group exam based on written group product
Number of people in the group 2-4
Size of written product Max. 10 pages
Written product to be submitted on specified date and time.
10 pages 12 pt Times New Roman (excluding reference list)
Assignment type Synopsis
Release of assignment An assigned subject is released in class
Duration
Written product to be submitted on specified date and time.
20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Grading scale 7-point grading scale
Examiner(s) Internal examiner and second internal examiner
Exam period Autumn
Make-up exam/re-exam
Same examination form as the ordinary exam
Re-take exam is to be based on the same report as the ordinary exam:

If a student is absent from the oral exam due to documented illness but has handed in the written group product she/he does not have to submit a new product for the re-take.

If a whole group fails the oral exam they must hand in a revised product for the re-take.

If one student in the group fails the oral exam the course coordinator chooses whether the student will have the oral exam on the basis of the same product or if he/she has to hand in a revised product for the re- take.
Description of the exam procedure

During the oral exam students present a revised solution of the Live-Case based on the synopsis emphasizing the theoretical basis and priorly received feedback.

The presentation should be structured according to the learning objectives.

 
Course content, structure and pedagogical approach

The overall aim of the course is to outline how decision problems in the procurement function of an organization can be solved based on analysis techniques rooted in management accounting and control.

 

The course begins with a discussion of the different roles of the procurement function. Subsequently, management accounting methods to derive and analyze key performance indicators of the procurement function are discussed and illustrated based on Harvard Business School case studies and a business game. In addition to strategic cost management in procurement with a focus on financial metrics, non-financial performance indicators are covered in the course.

 

The course covers the following topics:

*Different roles of the procurement function and link to management control

*Spend analysis

*Procurement organization structures, responsibility centres, and transfer pricing

*Performance measurement in procurement

*Target costing and Kaizen costing

*Total cost of ownership

 

 

The special feature of the course is the Live-Case. In the Live-Case, selected theoretical content of the course will be applied to a practical problem. Students receive a presentation by company representatives in the beginning of the course and get the opportunity to ask questions to the company representatives. Thereafter, they have to define and delimit the problem and to work on a solution throughout the course in their group. The Live-Case consists of three elements:

 

1) The synopsis is intended to describe the theoretical basis to the solution of the case

2) A presentation in front of case company representatives enables students to prepare for the oral exam and to receive practitioner and lecturer feedback to the solution of the case

3) During the oral exam the students present a revised solution based on the feedback and discuss and evaluate the theoretical basis for their solution.

 

 Prior case companies were: Danske Bank, Mærsk and Leo Pharma.

 

 
Description of the teaching methods
This course is delivered in a blended format and focuses on both theory and problem-solving skills:

- Classical lectures
- Exercises and a workshop based on the research articles in the reading list
- Harvard Business School case studies
- Lego business game
- Guest lectures by procurement professionals
- Live-Case presentations and discussions


All elements are linked to the learning objectives and emphasize different forms of learning, reflecting and applying theory to practical issues.

Overall, the class is very interactive and focuses on both theory and problem-solving skills. Each student will be assigned to a group from the beginning of the course. Students are supposed to use their group homepage on Canvas for case work.
Feedback during the teaching period
The blended course format offers ample possibilities for feedback:
During lectures and exercises, students are provided with overall feedback relevant to every student.
During case presentations and discussions, students receive group feedback and individual feedback (optional) to improve the content of their solutions and their individual presentation style. In addition, peer feedback on content and presentation style is emphasized.
Sstudents also receive feedback by company representatives during their presentation of the Live-Case.
Student workload
Lectures 36 hours
Reading and preparation of cases 170 hours
Further Information

The course is part of the Minor in Strategic Procurement consisting of the following courses:

- Global Sourcing Management

- Performance Measurement in Procurement Organizations

- Procurement Value Creation
Expected literature
  • Cooper, R.; Slagmulder, R. (2003a): Interorganizational Costing, Part 1. In Cost Management Sept/Oct, pp. 14–21.
  • Cooper, R.; Slagmulder, R. (2003b): Interorganizational Costing, Part 2. In Cost Management Nov/Dec, pp. 12–24.
  • Cooper, R., and R. Slagmulder. 2004. Interorganizational cost management and relational context. Accounting, Organizations and Society 29 (1): 1–26.
  • Ellram, L. (1995): Total cost of ownership - An analysis approach for purchasing. In International Journal of Physical Distribution & Logistics Management 25 (8), pp. 4-23.
  • Hofmann, E.; Maucher, D.; Kotula, M.; Kreienbrink, O. (2014): Performance measurement and incentive systems in purchasing. More than just savings. Heidelberg: Springer.
  • Kaplan, R.; Norton, D. P. (2001): Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I. In Accounting Horizons 15 (1): 87-104.
  • Kaplan, R. S.; Norton, D. P. (2008): Mastering the Management System. Harvard Business Review January: 1- 16.
  • Lockamy, A.; Smith, W. I. (2000): Target costing for supply chain management: criteria and selection. In Industrial Management & Data Systems 100 (5), pp. 210–218.
  • Mena, C.; van Hoek, R. I.; Christopher, M. (Eds.) (2014): Leading procurement strategy. Driving value through the supply chain. London, Philadelphia: Kogan Page. Chapter 1.
  • Trent, R. J., and L. R. Roberts. 2010. Managing global supply and risk: Best practices, concepts, and strategies. Fort Lauderdale, Fla. J. Ross Pub. Chapter 4.
  • Wouters, M., J. C. Anderson, and F. Wynstra. 2005. The adoption of total cost of ownership for sourcing decisions - a structural equations analysis. Accounting, Organizations and Society 30 (2): 167–91.
Last updated on 15-02-2023