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DESCRIPTION
A commonly quoted statistics is that 80-95% of the cost of a product is determined by its design and is therefore set before the item enters Manufacturing. This assumption suggests that the dominant focus of Cost Management should be during Product Development and not during Manufacturing.
However, contrary to a widely held assumption, companies can integrate a variety of Cost Management techniques not only in the Design phase, but throughout the Product Lifecycle. This is to ensure that there is substantial reduction in costs. In fact, companies competing aggressively on cost might consider the adoption of some form of an Integrated Cost Management program that spans the entire Product Lifecycle.
This framework captures the 5 Cost Management Strategies that companies can use to reduce costs and still attain the desired level of functionality and quality at the target costs.
1. Target Costing
2. Product-specific Kaizen Costing
3. General Kaizen Costing
4. Functional Group Management
5. Product Costing
Each of the 5 Cost Management Strategies plays a crucial role in the company's integrated approach to Cost Management. These 5 Cost Management Strategies can be applied throughout the Product Lifecycle with 1 technique during Product Design and the rest during Manufacturing.
This deck also includes slide templates for you to use in your own business presentations.
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Source: Best Practices in Cost Reduction, Cost Management, Kaizen, Product Lifecycle PowerPoint Slides: 5 Cost Management Strategies PowerPoint (PPTX) Presentation, LearnPPT Consulting
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OVERVIEW
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ABOUT THE AUTHOR
We are a team of management consultants trained by top tier global consulting firms (including McKinsey, BCG, Deloitte, EY, Capgemini) with a collective experience of several decades. We specialize in business frameworks based on real-life consulting engagements.
We have served 100s of clients that range from Fortune 500 companies to tech startups to $1B+ private companies.
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Cost Reduction Assessment M&A (Mergers & Acquisitions) Target Operating Model Customer Decision Journey Pricing Strategy Consulting Frameworks Organizational Design Business Case Development Financial Modeling Business Plan Example Change Management Value Chain Analysis Strategic Sourcing
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