Quality Function Deployment
------------------------------------------------- operatıons management project report
Cost management through product design: target costing approach, Yasemin Zengin and Erhan Ada
In this paper, target costing tool combined with other management techniques, namely Quality Function Deployment (QFD) and Value Engineering (VE), has been focused with a case study. In this case study, QFD-TC (Target Costing) methodology has been executed in a SME (Small and medium enterprises) and it is showed that, integrating target costing with QFD and VE techniques is highly effective on managing the costs of product and overall production process.
Introduction / Motivation
In today’s world, customers demand increased functionality and quality with lower prices. Therefore, standard cost minimization or reduction techniques are not sufficient to satisfy this demand because they do not take quality and functionality demands into consideration.
Target costing differs from other conventional cost reduction techniques as it combines customer’s technical and functional demands and market data with production phase so it enables the remove unwanted functions and consequently reduces costs.
Target Costing
Target costing is a method to satisfy customer’s demands while remaining cost competitive. In other words, it is a “reverse costing” methodology, in which allowed cost is found from selling price and required profit margin. It can be used for both new and existing products.
It needs detailed market research in order to determine customers’ quality and functionality demands and the price they want to pay as well.
Target costing method also requires co-operation of different departments such as marketing, engineering, design and sales teams during and before production phases.
QFD (Quality Function Deployment) – TC (Target Costing) Process
Step 1 and 2 depend on market research data gained by QFD methodology. After having sufficient data, target cost is determined according
Cost management through product design: target costing approach, Yasemin Zengin and Erhan Ada
In this paper, target costing tool combined with other management techniques, namely Quality Function Deployment (QFD) and Value Engineering (VE), has been focused with a case study. In this case study, QFD-TC (Target Costing) methodology has been executed in a SME (Small and medium enterprises) and it is showed that, integrating target costing with QFD and VE techniques is highly effective on managing the costs of product and overall production process.
Introduction / Motivation
In today’s world, customers demand increased functionality and quality with lower prices. Therefore, standard cost minimization or reduction techniques are not sufficient to satisfy this demand because they do not take quality and functionality demands into consideration.
Target costing differs from other conventional cost reduction techniques as it combines customer’s technical and functional demands and market data with production phase so it enables the remove unwanted functions and consequently reduces costs.
Target Costing
Target costing is a method to satisfy customer’s demands while remaining cost competitive. In other words, it is a “reverse costing” methodology, in which allowed cost is found from selling price and required profit margin. It can be used for both new and existing products.
It needs detailed market research in order to determine customers’ quality and functionality demands and the price they want to pay as well.
Target costing method also requires co-operation of different departments such as marketing, engineering, design and sales teams during and before production phases.
QFD (Quality Function Deployment) – TC (Target Costing) Process
Step 1 and 2 depend on market research data gained by QFD methodology. After having sufficient data, target cost is determined according