Companies tend to believe that little can be done to reduce the cost of production once the design is set. This belief has shaped many cost management program in cycles of different products life. Because of this, companies often focus on reducing costs during the design and cost containment in the production process. But much of the product cost is really locked in the design process? Recent research suggests otherwise. In an extensive study in the field of consumer products division of Olympus Optical Company, the authors found that the company could obtain a significant reduction in production costs. In fact, studies have shown that costs can be aggressively managed throughout the product life cycle. In addition, the authors found that Olympus Optical methods used by cost management in an integrated manner, with the outputs are some methods that act as input to the other, thus increasing the overall efficiency of the program. Observations show that companies compete aggressively for value may consider taking some form of comprehensive cost management program, which covers the entire life cycle of the product. "Hide
by Robin Cooper, Regina Slagmulder Source: MIT Sloan Management Review 10 pages. Publication Date: 01 Oct 2004. Prod. #: SMR153-PDF-ENG
Related Case Solutions & Analyses:
Personal Selling and Sales Management
Reputation in Online Auctions: The Market for Trust
Managing the Chicago Public Schools
Collaborating with Activists: How Starbucks Works with NGOs
Scenario Planning: Tool for Strategic Thinking
O.M. Scott & Sons Co. Leveraged Buyout
General Electric Co.: Preparing for the 1990s
Euroleague Basketball: The Challenges of Growing a New League
From Hero Honda to Hero versus Honda: Going their Separate Ways
Mass Retailing in Asia (A): The Markets (French) French
