Information Sharing Between Automakers and Suppliers in the Process of Target Cost Management
Author(s)
Okano, Hiroshi
Bonzemba, Ekutu
Date Issued
July 18, 2002
Series/Report no.
IMVP;170a
Abstract
In order to survive in today's business environment characterized by strong competition,
it is no longer enough to be an efficient company. The efficiency in the entire value
chain of a company is necessary to satisfy today's demanding customer in term of
quality-cost-time. One of the tools used by many Japanese companies since the 1960s to
satisfy the quality-cost-time requirements is the proactive cost management approach,
widely known as Target Cost Management (TCM).
While many researches related to TCM have been conducted during this last
decade, they are more focused on the TCM process of top companies in a value chain.
The importance of suppliers' involvement into the TCM process of their customers is
recognized, but it is still under-explored. In this paper, an attempt is made to explore
how suppliers in the Japanese automobile industry contribute to the effectiveness of
TCM process of the auto-makers through information sharing between the two parties.
Subjects
target cost management
information sharing
value chain
suppliers
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