Kaizen Costing
Finance
Kaizen Costing
Continuous cost-reduction approach applied during production after target cost has been established.
Examples
- 01After launch of a new e-bike motor, kaizen costing sets a target to reduce its unit cost by 3 % per year through shop-floor improvements.
- 02The monthly cost meeting tracks each kaizen costing idea, such as a cheaper fastener or a shorter test cycle, against the yearly target.
- 03An idea counts toward the kaizen costing target only after the lower cost appears in the actual unit cost for two months.