Target Costing is a powerful management concept to support the New Product Introduction (NPI) process.
It is simply expressed as setting a target cost based on the difference between the price the customer is prepared to pay and the profit the manufacturer wishes to make.
Setting cost as an independent variable in this way challenges the firm to drive hard to reduce manufacturing and product life-cycle costs.
Six main principles must be maintained for success:-
The new product life-cycle has four major steps or phases to be managed rigorously:-
Therefore, in many businesses, a step change in performance is necessary to be world class.
Value Driven Design is committed to assist clients to achieve these objectives. Our consultants and engineers have many years of industrial experience as design engineers, manufacturing engineers, managers and consultants. Having worked on many process and change management projects to support business improvement they are able to help you achieve excellent results.