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

Authors: Effnu Subiyanto; Somayeh Asadi

Addresses: Widya Mandala Surabaya Catholic University (UKWM) Surabaya, Graha Widya Mandala, 6th Floor, Jl. Dinoyo 48A, Surabaya, 60265, Indonesia ' Department of Architectural Engineering, Pennsylvania State University, USA

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.

Keywords: total cost of ownership; TCO; corporate strategy; procurement; project management; cement project; purchasing.

DOI: 10.1504/IJPM.2023.132177

International Journal of Procurement Management, 2023 Vol.17 No.4, pp.421 - 442

Received: 11 Mar 2021
Accepted: 01 Nov 2021
Published online: 12 Jul 2023 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article