What is the strategic cost management process?

What is the strategic cost management?

Strategic cost management is a process that helps organizations make decisions about how to allocate resources to achieve specific goals. It can be done by analyzing costs and identifying ways to reduce them; organizations can improve their financial performance and competitiveness. There are many benefits to strategic cost management, such as understanding costs and expenses and identifying the methods to reduce them. 

The strategic cost management process includes planning, defining the costs, and cost control. Planning includes identifying the resources needed in a supply chain. Defining the costs is estimating the costs of each resource and evaluating the cost involved. Cost control is the most integral part of the strategic cost management process. The management team focuses on getting the best value for the money and controlling unnecessary costs.