Inputs for Successful Target Costing

Abstract

Cost management is becoming as widespread as quality control was in the 1970’s and 1980’s1. Target Costing is an effective, structured approach to cost management. We have all faced the limitations of trying to reduce costs when a product is already designed and in manufacturing. This is the most expensive phase of the product realization cycle to make a change, so often good cost reductions ideas are not implemented. Target Costing addresses this limitation because it brings the strength of the whole enterprise into the early stages of a product’s development cycle.