TARGET COSTING & VALUE ENGINEERING TRAINING COURSE

Course Introduction

Target Costing & Value Engineering Training Course is a comprehensive and practical professional programme designed to equip finance professionals, management accountants, cost accountants, financial controllers, procurement professionals, product managers, engineers, operations managers, and business leaders with advanced skills in target costing, value engineering, strategic cost management, product cost optimization, profitability management, and cost-effective product development. The programme focuses on integrating market expectations, customer requirements, competitive pricing, desired profit margins, product design, procurement, production, and lifecycle costs to establish achievable target costs. Participants will learn how target costing can be applied during product and service development to manage costs proactively rather than attempting to reduce costs after production has commenced.
The programme provides extensive coverage of target costing principles, target selling price, target profit, allowable cost, target cost gap, cost tables, functional analysis, value analysis, value engineering, design-to-cost, life-cycle costing, cost-driver analysis, and cross-functional cost management. Particular emphasis is placed on customer value, competitive benchmarking, product functionality, quality, reliability, procurement costs, manufacturing costs, logistics, maintenance, and total cost of ownership. Participants will examine how organizations can balance cost, quality, functionality, customer expectations, and profitability while developing competitive products and services.
Participants will develop practical capabilities in calculating target costs, identifying cost gaps, analysing product functions, evaluating alternative designs, optimizing components, negotiating supplier costs, and developing cross-functional cost reduction strategies. The training addresses value engineering techniques, functional analysis, cost-benefit analysis, supplier collaboration, design optimization, material substitution, process improvement, cost modelling, lifecycle costing, and profitability analysis. Relevant general case studies will demonstrate how organizations can redesign products, optimize components, reduce production costs, improve functionality, and achieve required profit margins without compromising customer value or quality.
By the end of the training, participants will be able to develop and implement target costing and value engineering programmes that integrate finance, marketing, engineering, procurement, production, supply chain, and management functions. The programme is suitable for organizations seeking to improve product profitability, reduce development and production costs, strengthen competitiveness, and create greater customer value. The course can be customized for manufacturing companies, banks, insurance companies, telecommunications companies, retailers, government institutions, NGOs, development organizations, engineering firms, construction companies, and other organizations involved in product, service, project, or process development.

Course Objectives

1. Understand the principles, concepts, methodologies, and strategic applications of target costing.
2. Calculate target selling prices, target profits, allowable costs, and target cost gaps.
3. Apply market-based costing, competitive benchmarking, customer value analysis, and profitability assessment.
4. Understand the principles and applications of Value Engineering and Value Analysis.
5. Identify product functions, cost drivers, unnecessary costs, and opportunities for value improvement.
6. Apply design-to-cost, life-cycle costing, total cost of ownership, and cost optimization techniques.
7. Develop cross-functional cost reduction strategies involving finance, procurement, engineering, production, marketing, and supply chain teams.
8. Evaluate alternative materials, components, designs, processes, suppliers, and production methods.
9. Apply financial modelling, cost-benefit analysis, scenario analysis, and sensitivity analysis to value engineering decisions.
10. Develop sustainable target costing and value engineering frameworks that improve profitability, competitiveness, quality, and customer value.

Organization Benefits

1. Improves product and service profitability through proactive cost management.
2. Reduces product development, production, procurement, and lifecycle costs.
3. Strengthens competitiveness through market-driven pricing and cost management.
4. Improves alignment between customer expectations, product functionality, quality, and cost.
5. Identifies unnecessary costs and non-value-added product features.
6. Strengthens collaboration between finance, engineering, procurement, production, marketing, and supply chain functions.
7. Improves supplier negotiation and strategic sourcing opportunities.
8. Supports better product design, resource allocation, and investment decisions.
9. Enhances cost transparency and profitability forecasting during product development.
10. Creates sustainable value through continuous cost optimization and customer-focused innovation.

Target Participants

The course is designed for Chief Financial Officers (CFOs), Finance Directors, Finance Managers, Management Accountants, Cost Accountants, Financial Controllers, Product Managers, Product Development Managers, Engineers, Value Engineers, Procurement Managers, Supply Chain Managers, Production Managers, Operations Managers, Commercial Managers, Pricing Managers, Project Managers, Business Analysts, Financial Analysts, Auditors, Finance Business Partners, and professionals responsible for product development, cost management, procurement, profitability, pricing, engineering, and strategic decision-making.

Course Outline

Module 1: Target Costing Foundations and Strategic Cost Management

1. Introduction to target costing, strategic cost management, market-driven costing, and profitability management.
2. Target selling price, target profit, allowable cost, target cost, and target cost gap analysis.
3. Market research, customer requirements, competitive pricing, competitor benchmarking, and market positioning.
4. Linking target costing with corporate strategy, product strategy, financial objectives, and customer value.
5. Cross-functional target costing teams, responsibilities, governance, communication, and decision-making.
6. General Case Study: Developing a target costing model for a new product using competitive market prices, customer expectations, desired profit margins, and estimated product costs.

Module 2: Cost Analysis, Cost Drivers and Target Cost Gap Management

1. Product cost structures, direct and indirect costs, fixed and variable costs, overheads, and cost drivers.
2. Cost estimation, cost modelling, historical costing, standard costing, and cost forecasting.
3. Identifying target cost gaps and analysing their financial, operational, and strategic causes.
4. Cost tables, component costing, supplier costing, manufacturing costs, logistics costs, and distribution costs.
5. Developing cost reduction alternatives and prioritizing opportunities based on financial impact and customer value.
6. General Case Study: Analysing a significant target cost gap and developing a structured cost reduction plan covering materials, labour, overheads, procurement, logistics, and product design.

Module 3: Value Engineering and Functional Analysis

1. Introduction to Value Engineering, Value Analysis, functional analysis, and value management.
2. Identifying basic and secondary product functions, customer requirements, and functional performance.
3. Function-cost-worth analysis and identifying opportunities to eliminate unnecessary costs.
4. FAST diagrams, functional decomposition, creative problem-solving, and alternative solution development.
5. Evaluating design alternatives based on cost, quality, functionality, reliability, safety, and customer value.
6. General Case Study: Applying Value Engineering to redesign a product component and reduce cost while maintaining required performance, quality, reliability, and customer functionality.

Module 4: Design-to-Cost, Life-Cycle Costing and Total Cost of Ownership

1. Design-to-cost principles and integrating cost considerations into product and service development.
2. Life-cycle costing from research and development through production, distribution, operation, maintenance, and disposal.
3. Total Cost of Ownership (TCO), acquisition cost, operating cost, maintenance cost, logistics, and disposal costs.
4. Material substitution, component redesign, process redesign, technology selection, and manufacturing optimization.
5. Supplier collaboration, strategic sourcing, cost transparency, supplier development, and procurement cost management.
6. General Case Study: Comparing alternative product designs using life-cycle costing and Total Cost of Ownership to select the most economically and operationally efficient solution.

Module 5: Strategic Cost Reduction, Pricing and Profitability

1. Strategic cost reduction, cost optimization, process improvement, Lean principles, and waste elimination.
2. Pricing strategy, target margin, contribution analysis, customer value, and competitive positioning.
3. Product profitability, customer profitability, channel profitability, and portfolio analysis.
4. Make-or-buy, outsourcing, insourcing, supplier selection, capacity utilization, and resource allocation.
5. Scenario analysis, sensitivity analysis, cost-benefit analysis, and financial modelling for strategic decisions.
6. General Case Study: Evaluating alternative pricing, sourcing, and production strategies to close a target cost gap while protecting profitability and customer value.

Module 6: Digital Target Costing, Analytics and Continuous Improvement

1. Digital target costing, ERP integration, cloud accounting, product lifecycle management, and finance transformation.
2. Excel, Power Query, Power BI, financial modelling, cost databases, and value engineering analytics.
3. Developing target costing dashboards covering target cost, actual cost, cost gaps, profitability, supplier costs, and savings.
4. Using data analytics and scenario modelling to evaluate product cost, design alternatives, supplier performance, and profitability.
5. Establishing continuous improvement, cost monitoring, governance, performance measurement, and target cost maintenance.
6. General Case Study: Developing an integrated digital target costing and value engineering framework that connects product design, procurement, production, finance, supplier management, cost analytics, and profitability.

General Information

1. Customized Training: All our courses can be tailored to meet the specific needs of participants.
2. Language Proficiency: Participants should have a good command of the English language.
3. Comprehensive Learning: Our training includes well-structured presentations, practical exercises, web-based tutorials, and collaborative group work. Our facilitators are seasoned experts with over a decade of experience.
4. Certification: Upon successful completion of training, participants will receive a certificate from Foscore Development Center (FDC-K).
5. Training Locations: Training sessions are conducted at Foscore Development Center (FDC-K) centers. We also offer options for in-house and online training, customized to the client's schedule.
6. Flexible Duration: Course durations are adaptable, and content can be adjusted to fit the required number of days.
7. Onsite Training Inclusions: The course fee for onsite training covers facilitation, training materials, two coffee breaks, a buffet lunch, and a Certificate of Successful Completion. Participants are responsible for their travel expenses, airport transfers, visa applications, dinners, health/accident insurance, and personal expenses.
8. Additional Services: Accommodation, pickup services, flight booking, and visa processing arrangements are available upon request at discounted rates.
9. Equipment: Tablets and laptops can be provided to participants at an additional cost.
10. Post-Training Support: We offer one year of free consultation and coaching after the course.
11. Group Discounts: Register as a group of more than two and enjoy a discount ranging from 10% to 50%.
12. Payment Terms: Payment should be made before the commencement of the training or as mutually agreed upon, to the Foscore Development Center account. This ensures better preparation for your training.
13. Contact Us: For any inquiries, please reach out to training@fdc-k.org or call us at +254712260031.
14. Website: Visit our website at www.fdc-k.org for more information.