Target Costing Research Analysis: Reflections for Construction Industry Implementation

Ana Mitsuko Jacomit1, Ariovaldo Denis Granja2 & Flavio Augusto Picchi3

1Postgraduate research student, Construction Management and Technology Research Group (GTE), Department of Architecture and Construction (DAC), School of Civil Engineering, Architecture and Urban Design (FEC), University of Campinas, Brazil (UNICAMP), 13083-852, Campinas, SP, Brazil;, anamjacomit@gmail.com;
2Asst. Professor, Construction Management and Technology Research Group (GTE), Department of Architecture and Construction (DAC), School of Civil Engineering, Architecture and Urban Design (FEC), University of Campinas, Brazil (UNICAMP), 13083-852, Campinas, SP, Brazil; adgranja@fec.unicamp.br
3Director, Lean Institute Brazil, Rua Topázio 911, São Paulo/SP, Brazil, CEP 04105-063, Phone +55 11/5571- 6887, FAX 11/5571-0804, fpicchi@lean.org.br

Abstract

Target costing or Genka Kikaku, as originally named in Japan, is not only a tool for managing costs, but a strategic approach for development of new products, that aims to reduce costs, ensuring quality, reliability and other attributes that will add value to the customers. This paper presents a framework that summarizes a product development process with the literal application of target costing, and seeks to compare this framework to three implementations of it in the construction industry. It started with elaboration of a flowchart that allowed the definition of the parameters to be used in the analysis. Results show that none of the cases studied covers a completed target costing implementation as envisioned in manufacture. Finally, this work points out some issues that need further development such as studies about alternative ways of obtaining the target cost – based on the current market price instead of historical data.

Keywords

target costing, target cost, cost management, value engineering

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Reference

Jacomit, A.M. , Granja, A.D. & Picchi, F.A. 2008, 'Target Costing Research Analysis: Reflections for Construction Industry Implementation' In:, Tzortzopoulos, P. & Kagioglou, M., 16th Annual Conference of the International Group for Lean Construction. Manchester, UK, 16-18 Jul 2008. pp 601-612

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