Kaizen Costing—Exercises
Basic Data Setup
Purpose: The purpose of this exercise is to show you how to
set up the
basic data required for running Kaizen costing.
Windows:
Costing Basic Data
- Adjust the predefined parameters.
- Assign the reduction type.
Kaizen Costing
Purpose: When costs do not fit, it is time for
rationalization. Kaizen costing enables you to record activities that will bring down your
part costs. You will perform Kaizen in the activities below.
Windows:
Part Cost
- Click the
Kaizen Cost tab. Enter required Kaizen cost in the Kaizen Cost field
or set kaizen cost. To set kaizen cost, right-click and click Cost
Calculations and then click Set Kaizen Cost. The
Set Kaizen
Cost dialog box will be opened. In the Reduction Rate field, enter
the reduction rate as a percentage. When you query for the part, the Kaizen cost gap will be
calculated and displayed in the Kaizen Cost Gap field.
- Create a new record in the table. Enter values in the Activity
Description, Reduction Type, Kaizen Status, Planned Due Date and
Cost Reduction Potential fields. If the reduction type is defined as
DTC (Design to
Cost), perform cost value analysis to find out whether cost reduction on the
part or
component can be made without removing any customer features (see the next
chapter).
- Assign a return on investment (ROI) method. Possible values are Payback,
NPV (Net
Present Value), or MIRR (Modified Internal Return Rate).
- To calculate your investment, right-click and point to Cost
Calculations
then click Calculate - ROI Part Kaizen Items. TheROI Part Kaizen Items Calculations dialog box will be opened. You can enter the required values and perform
simulations until you
have an approved ROI calculation.
- Repeat with additional activities to close the Kaizen cost gap.
- Update the Kaizen status from
Initial to Preliminary. When the activities are completed, change the Kaizen
status to Final. The sum of potential reduction considers all cost savings
except verified and canceled activities.
- Verified cost savings consider the verified status with verified date.
- On the planned due date, update your costing data,
calculate, and copy the cost set into Cost Set 1.