Cost Management Strategies: Ad Hoc vs. Systematic Approaches PPT

This PPT slide, part of the 27-slide Integrated Cost Management PowerPoint presentation, presents a comparative analysis of 2 strategies in cost management: Ad Hoc and Systematic Application. It emphasizes the implications of using these strategies during the product design phase, particularly focusing on missed savings opportunities.

The left section outlines the Ad Hoc approach, which is characterized by the use of a single strategy applied in an unstructured manner. This method can lead to inefficiencies, especially when product-specific Kaizen costing is applied to products that do not meet their target costs. Despite this, such products may still be launched for strategic reasons, which raises questions about the effectiveness of this approach.

On the right, the Key Considerations section provides insights into how product-specific Kaizen and target costing can facilitate a continuous improvement process aimed at achieving target costs through innovative design. It highlights the potential disruptions that can occur when altering a product’s design during manufacturing, noting that such changes may not justify the expected savings for products that have already missed their target costs.

The slide also points out that product-specific Kaizen costing can be effectively utilized for high-volume products launched above their target costs. However, it stresses the importance of applying this strategy immediately after product launch and only during the early stages of manufacturing to ensure that upfront investments are justified.

This analysis serves as a crucial guide for decision-makers considering the timing and application of cost management strategies in product development. It underscores the need for a systematic approach to avoid pitfalls associated with ad hoc applications, ultimately aiming for more sustainable financial outcomes.

This slide is part of the Integrated Cost Management PowerPoint presentation.

Download the Full Presentation

EXPLORE MORE SLIDES FROM THIS PRESENTATION

EXPLORE MORE PRESENTATIONS ON

Cost Reduction Assessment Continuous Improvement Cost Management Disruption Product Development Kaizen Manufacturing

Are you familiar with Flevy? We are you shortcut to immediate value.

Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations

Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.

The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."

– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.

"As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value."

– David Coloma, Consulting Area Manager at Cynertia Consulting

"I have used Flevy services for a number of years and have never, ever been disappointed. As a matter of fact, David and his team continue, time after time, to impress me with their willingness to assist and in the real sense of the word. I have concluded in fact

... [read more]

– Roberto Pelliccia, Senior Executive in International Hospitality

"As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.

Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I

... [read more]

– Nishi Singh, Strategist and MD at NSP Consultants

"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."

– Michael Evans, Managing Director at Newport LLC

"I am extremely grateful for the proactiveness and eagerness to help and I would gladly recommend the Flevy team if you are looking for data and toolkits to help you work through business solutions."

– Trevor Booth, Partner, Fast Forward Consulting

"If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"

– Debbi Saffo, President at The NiKhar Group

"As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor

... [read more]

– Michael Duff, Managing Director at Change Strategy (UK)