In the last decade, many US manufacturers have experienced fierce global competition
and have adopted a lean manufacturing philosophy in order to compete in the
international market. Many US firms have used traditional standard costing systems
to control costs during the manufacturing process. These systems are insufficient
in supporting lean manufacturing objectives and are often in conflict with strategic
goals of the firm. Kaizen costing has increasingly been adopted as a new cost
management tool and philosophy to support lean manufacturing in order to
remain competitive. The focus of kaizen costing is on continuous cost reduction.
Two objectives of this article were to describe a method of setting kaizen costs and
to propose financial measurement metrics essential to the successful implementation