Thursday, July 21, 2016

Target Costing and Industrial Engineering

Target costing is cost estimation and reduction methodology to achieve a target cost set in relation to the target price set by the company as an objective.

Industrial engineering tools were used by the Toyota managers in target costing exercises. Taiichi Ohno specifically mentioned the role of Industrial Engineering in improving the profitability of Toyota Motors by reducing costs.


Methods efficiency engineering and the related operation analysis examine proposed manufacturing processes and eliminate wastes or inefficiencies.

Motion economy principles based design provides for the best motion pattern that minimizes human effort.

Layout efficiency improvement takes care of layout related issues.

Value engineering takes a product and component design analysis approach to reduce costs.

Operations research optimizes various parameters subject to the given constraints.


Implementing Target Costing - IMA Note
http://www.imanet.org/docs/default-source/thought_leadership/management_control_systems/implementing_target_costing.pdf


Current Status and Challenges of Target Costing in Japanese Major Corporations
2006 Article
Masayasu Tanaka,Masao Okuhara, Masao Ariga
http://www.value-eng.org/knowledge_bank/attachments/200631.pdf


Updated  23 July 2016, 28 November 2013

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