The Total Landed Cost Concept. Begging for Answers

TitleThe Total Landed Cost Concept. Begging for Answers
Publication TypeConference Paper
Year of Publication2015
AuthorsPumpe, A, Vallée, F
EditorBlecker, T, Kersten, W, Ringle, CM
Title of ProceedingsOperational Excellence in Logistics and Supply Chains
Conference LocationHamburg
ISBN Number978-3-7375-4056-8
Other NumbersISSN (print) 2365-4430, ISSN (online) 2365-5070
KeywordsImportance-performance Analysis, International Sourcing, Supplier Selection, Total Landed Cost

The Total Landed Cost (TLC) often comprise a large share of the total international
sourcing cost and thereby determine the cost-saving potential. Therefore, the TLC
must become an integral part when making international supplier selection decisions
to be able to make deliberate choices on a case-by-base base. The literature
proposes a number of frameworks to evaluate the TLC, but the ordinary way has not
been examined satisfactorily.
In this research, an online survey was conducted and the importance-performance
analysis (IPA) was applied. IPA is an effective tool that simultaneously analyses quality
attributes of the two dimensions performance and importance to identify areas
needing improvement as well as areas of effective performance. The sample included
264 valid and usable respondents.
As a result, reasons for an overall performance in need of improvement are the accessibility
of required information and the duration of the TLC evaluation process.
Based on a comprehensive literature review, this is probably why TLC frameworks
with sufficient detail to prompt effective decision-making are not present in research.
The authors discuss the resulting, derived research needs to enable an appropriate
TLC evaluation in international supplier selection decisions.