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Implementing total costs of ownership in procurement stages: learning from Indonesia cement projects

Author

Listed:
  • Effnu Subiyanto
  • Somayeh Asadi

Abstract

This paper introduces a new methodology for processing procurement stages using total cost of ownership (TCO) as the latest finding in project construction. A total of 30 experts participated in developing the method, shared and exchanged their skill and knowledge in the FGD and expert judgement (EJ), then sharpened the findings by forming an analytical hierarchy process (AHP) before concluding. The results show TCO is the most acknowledged, the simplest and the easiest way to evaluate procurement processes. TCO for cement projects consists of nine variables: 1) equipment under vendor's scope of supply; 2) local fabrication; 3) local purchase; 4) local adjustments; 5) engineering and design services; 6) training and supervision services; 7) civil/building/structure construction; 8) operational costs; 9) maintenance costs. These findings should be helpful to design the procurement process in complex projects, especially heavy projects. The professional views in this paper contribute to the literature.

Suggested Citation

  • Effnu Subiyanto & Somayeh Asadi, 2023. "Implementing total costs of ownership in procurement stages: learning from Indonesia cement projects," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 17(4), pages 421-442.
    • Handle: RePEc:ids:ijpman:v:17:y:2023:i:4:p:421-442
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