Analytical study of the methods and tools of cost management through design and development stage of new products

shaheen, mohamed 


Introduction: Firms need to manage the costs of products, in relation to their performance and functionality and, thereby, the value they offer to customers. One of the key opportunities for cost management arises during the development phase of new products, when there are still many degrees of freedom regarding the decisions that crucially impact cost, performance, and functionality. Hence, management accounting and other research fields in management, as well as in engineering, have developed approaches that support such cost management during product development notably target costing and empirical research has addressed the use of such methods. The objective of this review is to pay attention to a wide variety of cost management methods and to review research in accounting journals concerning these methods. We include empirical, theoretical, and conceptual studies; the latter put more emphasis on the description of the method itself. The review is limited to accounting research, and so it is intended to be representative for the field of accounting, but not for all research on these cost management methods much research is done in other management areas and in engineering. The focus of the present review is to organize the literature around specific methods for cost management during product development, such as target costing, life cycle costing, or product modularity. It is important (1) to clarify this perspective on the studies that were included and reviewed and (2) to motivate why this perspective provides a contribution of the present review. Clarification: The perspective of the present review is what studies have to say about the content or the use of specific cost management methods. However, many studies published in accounting do not investigate a specific cost management method, but define a more general, theoretical construct that characterizes certain types of cost management methods. A specific method would be mentioned only as an example of a particular type of cost management method. For example, Cadez and Guilding investigated antecedents and consequences of strategic management accounting, using survey data and structural equation modeling. Life cycle costing and target costing were mentioned as examples of strategic management accounting methods. Davila investigated the drivers of management control systems design in new product development. Survey results showed that project uncertainty and product strategy were relevant to explain the design of these control systems. Furthermore, cost information had positive association with project performance. Cost information was measured through the level of detail of cost information, the updating frequency of cost information, and the interactive use of cost information. Baines and Langfield-Smith reported on a survey of manufacturing companies and used structural equation modeling to examine management accounting change. One of the constructs in the model was advanced management accounting practices, which “can assist employees to more easily focus on achieving differentiation priorities, such as quality, delivery and customer service, compared to more traditional financially based accounting practices, as they highlight the need to satisfy customer requirements. Target costing was mentioned as an example of such advanced management accounting practices. Rather than focusing on theoretical constructs, such as strategic management accounting, cost information, or advanced management accounting practices, the connecting tread in the present literature review are specific cost management methods. Hence, for the selection of studies it was required that a study would explicitly address one or several cost management methods. Furthermore, the description of what a study had to say about one or several cost management methods was the selective focus in the present review, even if that would not be main result of the study. Research problem: Gaining this stage importance of being represents the basic structure of the product and where are drafting a large proportion of product costs, which are being implemented during the next stages of its life cycle, so there is an urgent need for these companies for the use of a set of tools that help their own resources, cost management and maximizing the use of them during the this phase following the stages leading to the production of products compatible with the needs of customers and in a way more effective in terms of resources consumed. The researcher noted through a simple review and an in-depth studies and previous research that this area did not take enough attention on the part of the accounting studies and cost-effectiveness, in particular, in spite of its importance and its impact on the product and its ability to reach customers at the price appropriate and cost costs, and that there was a need to attract the attention of researchers in the field of new costs to this area in order to pay for more ideas that contribute to the rationalization of operations costs and optimum utilization of available resources during this phase of the product life cycle stages. That was the primary motivation behind doing this research is to serve as a new effort to help shed light on how they have been handled this issue through cost management tools, and chose a researcher of this form of research (historical Survey Research) to try to analyze and study the largest number of research that dealt with the subject, in order to reach to highlight the special orientation of this research and the tools used to manage the cost and the role of these tools at this stage, in order to support research efforts in this area, both in terms of the target or the quality of the tools required to integrate with each other to get to expand its role at this stage, and consolidate integration with efforts to rationalize costs during the next stages of the product life. Thus, the basic problem is that the researcher wants to exposure and discussion based on the group to shed light on the following aspects of accounting and cost are: 1. Where did the previous accounting research on the use of cost management tools in the development of new product design phase, and what are the aspects that focused upon through this research, and what are the aspects that have not so far been insufficient and we need more efforts to try to cover. 2. What are the main cost that was used during this stage, management tools, and what are the tools that are not suitable for use during this phase, and what are the reasons for lack of suitability for use, is it possible to develop and take advantage of the cost management during this phase. 3. Is in control of the historical cost accounting research management during the development and design of new products phase pattern is theoretical research, surveys or is applied research. 4. Is it possible to propose new ideas and opportunities for research related to this topic in the future by proposing the application of a new set of costs or the instruments of integration between the new combination of cost tools that can be used in order to rationalize the costs of products during this phase. Results and recommendations: The aim of this paper to provide an overview of the accounting studies and research associated with a variety of ways and methods used in cost management in the development of new products such as target costing phase, life cycle cost, shared components, design and other boilerplate. Studies and Researches selected to cover approximately thirteen and have contributed to a method of various cost management methods, using a variety of search terms, published in forty magazines and scientific journals during the historical period from 1990 to 2013, and within these forty magazines, there are a number thirty-seven magazine and academic journal are identical to those contained in the research and accounting journals by Bonner et al evaluated., 2006)), in addition to the number three of the periodicals have been additions to the sample magazines included in the study and survey by searching (European accounting Review, Management accounting research, and Journal of Cost Management). Among the most important observations that have been reached by the research group Experimental associated with the target costs it has avoided dealing with this method as one of the measuring methods and estimate the cost, but I looked at him that it is within the strategic methods that enable dependence on foreign information available on the market and use it to manage operations for the development and design of new products.

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Keywords cost management - Life cycle costing
Issue Date Apr-2015
Publisher مجلة الفكر المحاسبي، قسم المحاسبة والمراجعة جامعة عين شمس
Journal مجلة الفكر المحاسبي، قسم المحاسبة والمراجعة جامعة عين شمس، العدد الأول، السنة العشرون، 2016. 

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