Nissan Motor Company LTD: Target Costing System
Nissan Motor Company LTD: Target Costing System
Nissan Motor Company LTD: Target Costing System
Sophisticated Japanese consumer and lean enterprise shape the competitive environment Toyota has 45% and Nissan has 25% of market share No brand loyalty Continuous improvement in functionality at the same cost is the confrontation strategy of Nissan
What is the competitive environment that drives the range of products sold?
Target cost is focused on setting the cost Value engineering is to achieve that target cost Allowable cost for components
Increase commonality of parts Reduce number parts in each new model
Boundaries are determined on price, quality and functionality set by target costing restrict the value engineering activity
What role does the consumer play in the target costing system?
Required level of functionality of a product at a given price Project next ten years consumer preferences to get a conceptual design
How does Nissan determine the target margin for a new product?
Price/margin curves for different mixes using simulation Many variations are run to examine combinations of price, volume and product mix Determine robustness mix-probability of new model success and failure
Shorter product life and cost benefit analysis Tweaking done through kaizen
Why is there no attempt to reduce the cost of a vehicle after it enters production?
Process Summary
Process Summary
Overall summary