They seek more customer input during the product design phase, collect data using formal methods, analyze customer needs and make the information available widely throughout the organization. The main purpose of the site visits was to supplement survey results with an in-depth look at best practices in the U.S. and Japan. Japanese firms companies were identified with the help of Alpha Brain, a Japanese corporation that has extensive contacts with companies using target costing in Japan. We have isolated fourteen important attributes shared by target costing best practice companies. Top management support is a critical success factor in implementing target costing.
Target costing is part of a company's culture.
The exception to this was at Boeing where it was part of the project team's culture, but not the overall company culture. Best practice companies tie target costing to strategy and profit planning. It provides the assumptions and plans for product planning and delivery and establishes a cohesive product realization process throughout the organization. All best practice companies have a high level of accountability and monitoring of target cost achievement. Targets are taken seriously and best practice sites have reporting structures for monitoring progress against targets.