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"Cost" = "selling price"-"profit" reflects the customer's request.

I talked about cost planning activities as essential product development activities.

Cost planning is the "profitable mechanism" of the actual manufacturing industry.

I introduced.

I did not simply emphasize the "profitable mechanism".

A company cannot survive without making a profit.

At Toyota, the idea of ​​"meeting the needs of our customers" is the starting point.

I heard the words, "Customers are lighthouses that illuminate the darkness," in a peace treaty by Honorary Chairman Zhang during my active career.

There are an unspecified number of different people who buy cars. We take the opinions of various customers seriously and make and deliver good cars.

I've been doing this for many years. So Mr Zhang told us Toyota is now there and that there are customers, and thanks to the customers, Toyota can survive.

Of course, this way of thinking is shared with Toyota Motor Corporation itself and with business partners who can participate with us, and we always remember to work.

At Kanto Motor, the predecessor of Toyota Motor East Japan, the company's basic policy was to take actions based on the customer's opinions with the keyword "customer-oriented".

In the article on April 1st,

By setting a target cost based on the formula of "cost" = "selling price"-"profit" and sharing it with all members involved in product development, collective efficacy will enhance, and they will achieve various ways to achieve the cost planning target. We have introduced examples of how new ideas were born.

Collective efficacy

The moment I got angry that the goal was not just to number but "what we should do", everyone's feelings began to aim for that height.

It sprouted into an engineer who had the feeling that "we can do it!" And spread it to everyone.

If you are memorable, we recommend that you reread it.

For example, "The background of the target value fostered collective efficacy."

Now, compare the following two equations.

  1. "Cost" = "selling price"-"profit"

  2. "Selling price" = "cost" + "profit"

"Cost" = "selling price"-"profit"

"Cost" + "Profit" = "Selling price" ... It's the same as moving profit to the left side!

If you say that, it's up to that point, but please think as follows.

  1. The price that the customer approves is the "selling price". The seller does not decide the "selling price" on his own. In a sense, it's the market price. The cost planning target is the one that subtracts the "profit" that the company can survive.

  2. It is a profit added to the "cost" incurred in product development. However, it makes it difficult for customers to approve it, so you will have to buy it even if you discount it.

Looking at it this way, it's an entirely different formula, and the basic idea is entirely different.

Furthermore, the basic idea is to determine the "selling price" based on the market price. We assume a price that customers can accept.

As I explained at the beginning that the idea of ​​"meeting the needs of customers" is the starting point, this idea is also flowing at the basis of goal setting.

While obtaining customer satisfaction, we can secure profits for the company's survival.

All concerned are the goals set from this idea. In other words, we share the idea that customer satisfaction is the goal behind us.

Each designer has a goal assigned to each part he is in charge of, so his role is clearly shown. If you can achieve the target cost assigned to each person, you can feel the sense of accomplishment that you were able to "meet the needs of our customers."

In this way, if the cost planning target, as shown in the above figure, can be achieved before the launch of the new product, the profit as expected in the planning can obtain at the manufacturing stage so that they will further spend the money on the subsequent product development. You will be able to guess.

In manufacturing, we look at the actual product while making it and continuous cost reduction activities.

The Toyota Production System has a policy of not having inventory as much as possible, so we will carry out production activities based on the basic idea of ​​"do not make things that cannot sell."

Since the market price is high, there is a high possibility that customers will accept it, so the number of sales will remain as planned, and efforts will make to reduce costs. The profits generated by cost reduction activities will be used for the subsequent product development.

It is reported in newspapers that "removing waste is Toyota's speciality", but it is evaluated in this way due to cost planning for product development and cost reduction activities at the production stage.

Through these KAIZEN activities, employees will enjoy a sense of accomplishment and continue their activities daily.

Profit To the last, the results of development and production activities will rotate to continue the company as a result of being recognized by customers.

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