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mahsa hosseini

on 28 July 2014

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Transcript of Komatsu,Ltd.(A):

Target Costing System

Komatsu VS. Nissan(process)
Komatsu :
attention to design>attention to market
Nissan :
Little flexibility on price
Functional Analysis
Divides a product into several functions
Generates a TARGET COST of a certain component
Realistic but difficult t o achieve
Mahsa Hosseini
Navid Pazhang
Farkhonde Tavousi
Not including the contractor
Linear regression tool
Not sensitive enough
Primarily target costs --> historical data

Cost of entire product
Functional analysis
Target cost of component
Add together
Compare to target cost

Major sub assemblies
Expected cost VS. target cost
Cost reduction target
Manager & Production staff
Relationship of productivity analysis and target costing
Target costing -->sets the cost of entire product
Sets the target cost of components
Komatsu VS. Nissan
Target costing system
Total product cost <Target cost
Excess cost must be taken some where else
Target cost defines functionality
Nissan :
Greater details
Functionality --> price and cost
strong attention to design-for-manufactured
Design study-->manufacture ability and achieving target cost
Internal focus-->design process
Reduce time to market :
Increasing interaction with suppliers
Shifting design process to suppliers
F is increasing
Innovation in functionality
more functionality
faster than competitors
Increase learning
Cost reduction
Reduce the design cycle
Design Analysis:
Prompt engineers to design in ways that improves :
Maximization of F (any given design change)
Historical information
What does the design analysis example show ?
Decreasing maintenance time -->
Improve product quality
Increase functionality
Acceptable at a greater cost
Conflict in PQF:

Target cost -->Price competitive
Target cost is determined based on:
current skills
historical data
availability of production facilities
Trade of on cost and quality or functionality
Komatsu :
Founded in 1917
Revenue in 1991-->989 billion Yens
Japan's largest heavy industrial manufacturer
Major lines of business
Construction equipment
Industrial machinery
Electronic applied products
Competitive environment :
In excavator and bulldozer market
Market share :
komatsu 30%
Hitachi less than 30 %
Kobelco 15%
Caterpillar 12.5%
Sumitomo 10%
Group diversification
Product Planning Process:
Concept design
concept drawing
Layout drawing
Detail parts drawing
Trial production
Marketing committee
Prepare for mass production
Production drawing
Mass production
Komatsu VS. Western Product Planning(Process)
What does Functional Analysis show?
Productivity Analysis
Full transcript