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Kaizen Costing
Kaizen costing is a cost reduction system used after a product's design has been completed and it is in production. Business professor Yasuhiro Monden defines kaizen costing as The Shogakukan Dictionary’s original definition of Kaizen is translated as ''“The act or making bad points better”.'' In English, the more popular definition of Kaizen is “Change for Better”. Many believe that the Kaizen meaning is “continuous improvement” but, Kaizen is a result of continuous improvement. It exists at the employee’s level. The employee’s goal is to reach their potential, challenge the status quo and achieve continual improvement. Prior to kaizen costing, when the products are under the development phase, target costing is applied. After targets have been set, they are continuously updated to display past improvements and the projected (expected) improvements. Monden has described two types of kaizen costing: * Asset and organization-specific kaizen costing activities pla ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Reduction
Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or products, the strategies can vary. Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project or the construction of a building. Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and price becomes a differentiator in the market. The importance of cost reduction in relation to other strategic business goals is often debated. Cost reduction strategies * Supplier consolidation: see examples in the aerospace manufacturing industry * Component consolidation * Low-cost country sourcing * Request for quotations (RFQ) * Supplier cost breakdown analysis * Function cost analysis / Value analysis / Value engineering * Design for manufacture / Design ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |