Target And Kaizen Costing Implementation In Construction

The challenge of implementing a combined target and kaizen costing approach has been recognized as a promising strategy for construction companies seeking to increase their profit margins, efficacy of production process and relationship with suppliers. Construction companies use to perform their services in a competitive market and can apply this combination to reduce construction costs, while at the same time assuring their profitable business margins. This research sought to implement a combined target and kaizen costing approach along the planning and construction phases of brand retail units (BRU). A context specific case study with four BRU has been devised. The main idea was firstly to design and to specify the units to reduce historical product development costs by means of product's definition interventions. On the target costing application the "customers care service center" of the company has been consulted about possible product conception interventions that were not perceived as value by customers. Later, the kaizen costing approach sought continuous improvements on production processes mostly based on suggestions originated by the main sub-contractors. The case study results show cost reductions around 13% compared with previous cost data of the company for these facilities.91105Ansari, S., (1997) Target Costing: Management Accounting - A Strategic Focus, p. 288. , McGraw-Hill, New York, USABallard, G., Reiser, P., The St. Olaf college fieldhouse project: A case study in designing to target cost (2004) Proceedings. . . of the 12th Annual Conference on Lean Construction, , Elsinore, DenmarkCooper, R., Slagmulder, R., (1997) Target Costing and Value Engineering, p. 379. , Productivity Press, Portland, USACooper, R., Slagmulder, R., (1999) Supply Chain Development for the Lean Enterprise: Interorganizational Cost Management, p. 510. , Productivity Press, Portland, USAFong, P.S., Shen, Q., Is the Hong Kong construction industry ready for value management? (2000) International Journal of Project Management, (18), pp. 317-326Granja, A.D., Picchi, F.A., Robert, G., Target and kaizen costing in construction (2005) Proceedings. . . of the 13th Annual Conference on Lean Construction, , Sidney, AustraliaKern, A.P., Formoso, C.T., Guidelines for improving cost management in fast, complex, and uncertain construction projects (2004) Proceedings. . . of the 12th Annual Conference on Lean Construction, , Elsinore, DenmarkKoskela, L., (2000) An Exploration Towards A Production Theory and Its Application to Construction, p. 296. , Ph.D. Diss., Civil Engrg., VTT Technical Research Centre of FinlandMonden, Y., (1995) Target Costing and Kaizen Costing, p. 373. , Productivity Press, Portland, USANicholas, J., Edwards, D.J., A model to evaluate materials suppliers' and contractors' business interactions (2003) Construction Management and Economics, 3 (21), pp. 237-245Ohno, T., (1988) Toyota Production System, p. 143. , Productivity Press, Cambridge, USARooke, J., Seymour, D., Fellows, R., Planning for claims: An ethnography of industry culture (2004) Construction Management and Economics, (22), pp. 655-662Thakur, D., 9 Reasons to switch to a single supplier system (2002) Quality Progress, pp. 61-64. , March, 2002Thomas, C.J., Dean, T.B., Fowler, D.R., Quality time: The art of qa program development for research sites (2003) Research Practitioner, 6 (4), pp. 219-225Toyota Motor Corporation (2002). The Toyota way in accounting & finance. Technical ReportWinch, G.M., Models of manufacturing and the construction process: The genesis of re-engineering construction (2003) Building Research & Information, 31 (2), pp. 107-118. , 200