"Total Cost Management – A Great Opportunity"
Increased global competition has forced companies to think aggressively about effective Cost Management. A low cost high quality product has become an object of desire, to gain a competitive edge. It is essential that cost management addresses not just individual activities or cost centres but the entire value chain.
What is Total Cost Management ?
Total Cost Management (TCM) is a systematic and structured approach to understand the costs of an organization, with the aim of providing a holistic framework to control, reduce and eliminate costs. Cost management is a philosophy, an attitude, and a set of techniques to create more value at lower cost. In this fast space competitive scenario, Cost Management information increases customer value.
Some of the important tools and techniques of Total Cost Management are as follows:-
- Activity Based Costing
- Activity Based Management
- Target Costing
Any TCM study is necessitated to answer the following questions:-
How much do our products cost us?
What are our profitable products and what are the profits
Which customer segment is most profitable?
Are our make or buy decisions right?