Komatsu Target Costing System

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Komatsu, Ltd. (A)
Target Costing System

Komatsu
• • • • • • • Founded 1917 Takeuchi Mining Co.,Komatsu Ironworks 1921 Komatsu, Ltd. 1991- International Firm Revenue Y989 bn NI Y31bn Construction Equipment, Industrial Machinery- Core Business. Electronics applied products – New Business : 80% • Rest from construction, unit housing, cheimcals, plastics and SW Development • 1989: “3G” : Growth, Globalisation and Group Diversification • 1995 : Exp Y 1.4 Tn; Worldwide production by 2000; Develop electronics, plastics, robotics; By 2000: Non construction products: 50%

Construction Equipment
• World’s second largest Mfr. • 300 models: bull dozers, excavators, wheel loaders, dump trucks • Market leader, Japan 30 % MS: Hitachi, Kobelco, Caterpillar Mitsubishi, Sumitomo. • Komatsu and Caterpillar Mitsubishi only bulldozers • Small country, many infra projects-popularity of excavators: digging,carrying, moving and loading dirt.

Product Development Process
• Approx 2 years: 6 months to 3 yrs • Product Planning Long range production plan: Mix of products and conceptual designs: Detailed description of structure • Design – Prepare product for prototype production – Conceptual drawings: ’A’ study- Feasibility of TC, Manufacturability of design – Layout drawings: ‘B’ Study: Firm’s ability to achieve TC – Detailed parts drawing: ‘C’ study: Real time achievability of TC and Mfg process and facilities

Product Development Process
• Trial Production
– Finalize design. Produce prototype. ‘D’ Study: Ease of production, Assembly of new product, Quality. If problem, trial Manufacture problem Document. Reestimate production cost and tests to ensure quality

• Preparation for full production
– Final TC and various studies to Marketing Committee for final approval for Mass production. Once approved, readied for full production. Production drawings prepared and pre-production plans developed. Confirm and rectify ‘D’ study problems. Released for mass production

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