Journal of Social Sciences and Humanities Research Fundamentals
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TYPE
Original Research
PAGE NO.
17-35
DOI
OPEN ACCESS
SUBMITED
22 May 2025
ACCEPTED
18 June 2025
PUBLISHED
20 July 2025
VOLUME
Vol.05 Issue07 2025
COPYRIGHT
© 2025 Original content from this work may be used under the terms
of the creative commons attributes 4.0 License.
The Role of The
Integration Loop Between
Target Costing and The
Theory of Constraints in
Enhancing Competitive
Advantage
Lect. Dr. Basim Mohammed Hussein Al-Zamili
Ministry of Education, General Directorate of Education in Najaf
Governorate, Audit and Internal Control Department, Iraq
Lect. Dr. Taisir Jawad Kadhim Sultan
Ministry of Education, General Directorate of Education in Najaf
Governorate, Iraq
Abstract:
Customers have become more knowledgeable
and demand high-quality products at reasonable prices.
As a result of the intense competition in the business
environment, the decline in available resources, and the
desire of companies to obtain a larger market share and
internal and external growth and expansion, it was
necessary to confront the requirements and use
efficient and effective tools. This is what contemporary
strategic cost management provides. The researchers
combined the techniques of product life cycle cost and
target cost within an integrated framework within a
series of continuous administrative and technical
integration rings to support the company's competitive
advantage. Among the most important tools used are
successive steps to integrate between the product life
cycle cost and the procedures for deriving the target
cost for men's suits in the ready-made men's clothing
factory in Najaf Governorate, and limiting the costs of
the men's suit life cycle and reaching the market target
cost of (48,000) dinars to support the factory's
competitive advantages to achieve the theoretical and
procedural research objectives. The researchers
concluded that the integration ring between these tools
supports and enhances the factory's competitive
advantages.
One
of
the
most
prominent
recommendations was the importance of applying
contemporary techniques and methods to reduce costs
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and improve product quality, in addition to achieving a
competitive advantage in light of the fiercely
competitive market.
Keywords:
Sustainable target costing, theory of
constraints,
competitive
advantage,
and
contemporary strategic costing tools.
Introduction:
With the increasing intensity of
competition in local and global markets, especially
after the opening up of countries' economies to each
other, it has become necessary for companies aiming
to survive and continue to develop and/or develop
their competitive capabilities on an ongoing basis to
keep pace with developments in the contemporary
business environment and thus secure a competitive
position that guarantees their survival. Therefore,
companies operating in a highly competitive
environment must employ more effective and efficient
technologies and methods to reduce costs and
improve the quality of product features early in the life
cycle. This is to meet customer desires, satisfy their
diverse needs, and gain competitive advantages that
provide companies with a superior position in the
market and achieve a larger market share, generating
ongoing profits. This can be achieved by employing an
integrated
approach
between
contemporary
technologies that focus on the cost aspect and the
importance of managing this element efficiently and
effectively. Consequently, this approach links strategic
product life cycle costing and strategic target costing,
both of which are considered among the most
important strategic cost management techniques. This
research aims to shed light on these cost-effective
techniques as supporting tools for achieving and
strengthening a company's competitive advantage.
Chapter One: Scientific Research Methodology
1-1: The Research Problem
Intense competition has become a defining feature of
the contemporary business environment, forcing
companies to reconsider their product structure to
keep pace with the high-quality, low-priced products
offered by competing companies. Hence, the
importance of the role of the integration loop between
strategic cost management tools emerges, most
notably the product life cycle. This contemporary
technology seeks to reduce costs, specifically reducing
product costs throughout its production life cycle. The
goal of the product life cycle technology converges
with the target costing technology for the product, as
long-term planned costs enable companies to enter
and remain in the market and compete successfully
with rival companies. Companies seek to generate
competitive value that distinguishes them from others
by creating new competitive advantages for their
products, both locally and globally. Therefore, the
research problem can be formulated with the following
question: Are traditional costing systems compatible
with the competitive environment? Also, can
companies' competitive advantage be strengthened by
using the integration loop between the product life
cycle technology and the target costing technology? 1-
2: The Importance of the Research
The importance of the research stems from the
increasing intensity of competition witnessed by the
industry at the local and global levels, the need for
companies to keep pace with the latest developments
in production processes in a manner that achieves a
competitive advantage in the contemporary business
environment, and the need to create harmonious
administrative integrations in an attempt to link product
life cycle technologies with target costs to strengthen
the company's competitive advantage.
1-3: Research Objectives
The primary objective is to identify the role of the
integration link between product life cycle technology
and target costing technology in strengthening
companies' competitive advantage by:
1. Introducing the literature on product life cycle
technology at its various stages (before, during, and
after production).
2. Identifying the literature on strategic target costing
and modern approaches to cost reduction, comparing
them with traditional costing.
3. Explaining the literature on competitive advantage,
its importance to companies, and the factors influencing
it, as well as its sources and most prominent
determinants.
4. Explaining the theoretical technical integration that
ensures achieving a competitive advantage in light of
product life cycle and target costing technologies.
5. Harmony and compatibility between theoretical and
practical integration by defining sequential logical steps
that clarify the practical aspect of the research,
accurately arriving at the life cycle costs of men's suits,
and then determining the market target cost for the
suit, which must be adhered to to achieve the factory's
competitive advantages.
1-4: Research Hypothesis
The research is based on the main hypothesis that
"Using the integration loop between product life cycle
technologies and target costing helps companies reduce
costs and achieve efficient management of their
available economic resources in a manner that achieves
a competitive advantage and sustainable survival in
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competitive local and global markets."
1-5: Research Limits
The research limits are divided into spatial and
temporal limits as follows:
First: Spatial Limits: The spatial limits of the research
are represented by the selection of a men's clothing
factory in Najaf Governorate, one of the factories of
the Ministry of Industry and Minerals in the Republic of
Iraq, due to its importance in meeting the needs and
requirements of the local market in Najaf for
contemporary men's clothing (men's suits) of
acceptable quality.
Second: Spatial Boundaries: The financial data for 2023
were selected as they are suitable for application and
have been audited by internal audit, in addition to
being audited by an official div, the Federal Board of
Supreme Audit.
1-6: Procedural Research Model
The researchers designed a procedural model that
illustrates the integration between the three research
variables, as follows:
Section Two: Target Costing - A Conceptual
Introduction
2-1 The Origins of Target Costing
Target costing emerged in Japan in the early 1960s.
Japanese industrial experts developed an American
concept called Value Engineering, which American
industry relied on during World War II as an
engineering approach to rationalizing production costs
and transforming them into a dynamic system for cost
reduction and profit planning. At that time, it was
called Target Costing, and its development had the
greatest impact on the superiority of Japanese
companies and their unique competitive advantage,
giving them a lead in the competition. The United
States began using the target costing approach with its
integrated components in the late 1980s, as a result of
its products losing many markets and its inability to
compete with Japanese competition. The 1990s were
considered one of the most successful periods in the
development of the target costing approach.
Researchers focused on studying and establishing the
conceptual framework of target costing in an attempt
to crystallize its concept and strategic dimensions, and
to determine its suitability in the ever-changing and
evolving modern industrial environment. This led to
the possibility of using it to increase the effectiveness
of the strategic management accounting system and
support the company's competitive position. Its
application expanded to many developed countries
after experiments in Japan proved to be highly
successful, leading some to attribute the superiority of
Japanese industry and its ability to compete with major
industrial nations to the pioneering application of this
costing approach. In light of the fierce competition
facing all companies, and the clear shortcomings of
traditional costing systems and their inability to provide
effective cost control and achieve real cost reductions,
adopting costing systems based on the target costing
approach becomes the most effective means of
achieving competitive costs, which supports the cost
management strategy. The basic requirement of
administrative costing systems and the company's
strategic management is the innovative thinking of
those responsible and the desire to implement radical
changes, or at least significant changes in systems,
processes, and influential activities, with the aim of
continuous improvement in quality and performance
and real cost reduction to achieve customer satisfaction
and happiness (Feil, et al., 2004: 10-11). 2-2 The Concept
of Target Costing
In fact, the process of establishing a specific definition
for target costing appears difficult due to the clear
discrepancy between definitions from one writer to
another. It is noted that many Japanese schools do not
agree on a specific meaning for target costing.
Therefore, there are several definitions that can be
summarized as follows:
Kato, citing Al-Moussawi, defined it as "the process of
determining the cost of new products that meet
customer desires in terms of price and quality by
examining all reasonable ideas regarding cost
reductions during the planning and design phases" (Al-
Moussawi, 2007: 27). Target costing is also defined as a
cost management tool aimed at reducing product costs
during the planning, development, and design phases.
As a result, this tool attempts to reduce costs during the
design phase of the product life cycle due to the speed
and magnitude of savings that can be achieved at that
stage compared to subsequent phases, while
maintaining
production
quality
and
customer
confidence and satisfaction (Ghanimi, 2014: 20). Target
costing is defined as "a cost planning and management
tool aimed at reducing total product costs within the
framework of comprehensive profitability and selling
price planning, given the product's level of quality and
customer satisfaction through the optimal and efficient
use of human resources" (Babker, 2015: 85).
Monden views target costing as a profit management
tool, defining it as "the company's broad profit
management activity during the new product
development phase, which includes:
1. Planning products that meet customer satisfaction.
2. Determining target costs (including target investment
costs) for the new product to achieve the desired target
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profits in the medium and long term, given current
market conditions.
3. Developing methods to ensure that product design
achieves target costs and meets customer needs for
quality and prompt delivery" (Feil et al., 2004: 11).
From the above, it is possible to note the diversity of
definitions of target costing from one researcher to
another. Some view target costing as a costing process
for new products, a cost management tool aimed at
reducing product costs, a cost planning and
management tool aimed at reducing total product
costs, and a profit management tool. However, all
researchers agree on the importance of meeting
customer needs, maintaining required quality, and
reducing costs to achieve a competitive advantage.
2-3 Reasons for the Emergence and Application of
Target Costing
The reasons for the emergence and application of
sustainable target costing can be identified through
the following: (Al-Samarrai et al., 2012: 106)
1. Increasing competition among alternative products.
2. Increasing cooperation with suppliers and the
emergence of large alliances.
3. Improving product quality from the supplier through
to its delivery to the customer.
4. Improving the ability to manage costs and
profitability during the short product life cycle.
2-4 Advantages of Target Costing
The application of target costing technology
contributes to achieving the following advantages (Al-
Khafaji, 2008: 23):
1. Helping to enhance the process of delegation of
authority from upper to lower levels of management,
regarding product development and operational
processes.
2. Helping to achieve competitive advantages for
companies, such as cost reduction and improved
product quality.
3. Helping to shape the company's competitive future
by designing and manufacturing products that achieve
prices that lead to the company's success in a
competitive market.
4. Using numerous methods that work to achieve
targeted cost reduction, such as value engineering,
decomposition analysis, and continuous improvement
of costs.
5. Applying a team approach to achieving target costs.
Team members typically consist of designers,
engineers, customers, manufacturers, marketers, and
accountants, who aim to achieve specific target costs
for the product at a specific level of quality and to
achieve the product's functional characteristics.
2-5 Target Costing Principles
The main principles that form the scientific framework
for sustainable target costing are as follows: (Al-Rakabi,
2010: 10-12)
1. The target market price is the cost driver.
This means that the market price is determined first,
and then the target cost is reached according to the
following equation: Target market price = Target profit
margin + Target cost. The considerations involved in
determining the target market price include that the
price be acceptable to customers, that it be competitive
compared to the prices of other similar products, and
that it cover the cost of the technology used.
2. Focus on customer interests.
Customer needs and desires regarding product quality,
cost, and delivery time are important elements for any
company wishing to maintain its market share and
achieve a competitive advantage. A study should be
conducted before commencing production to answer
some of the following questions:
What are the customer's interests and desires?
What is the importance of the product's functions or
features from the customer's perspective?
Do the product specifications meet the customer's
needs, and which needs are not being met?
How does the product differ from competitors'
offerings?
What additional services does the company offer to the
customer?
3. Control Costs from the Beginning
Target costing is a proactive technique for determining
product costs. It determines the allowable production
cost, sales price, and target profit margin before
production. Therefore, the focus is on the product
design stage, ensuring that it includes functions that
meet the customer's desires and needs while
simultaneously producing within the allowable cost.
This is the complete opposite of the traditional costing
system, which determines the product cost based on
the production stage and subsequent stages, i.e., after
the product is produced.
4. Control Costs at All Stages of the Product Lifecycle
Under target costing, the value chain system, including
the supplier value chain, is analyzed and studied by
forming a team of individuals with expertise,
specializations, and various engineering and non-
engineering functions. The team consists of individuals
with expertise, specializations, and various engineering
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and non-engineering functions. The team consists of
activities
related
to
planning
and
design,
manufacturing, marketing, internal and external
purchasing, distributors, services and equipment, cost
accounting, legal aspects, and others (Al-Rikabi, 2010:
10-12). 2-6 Steps and Levels of Target Costing
Implementation
The product development process using the target
costing technique can be described as a continuous
cycle divided into four successive steps (Al-Moussawi,
2007: 56-62):
1. Product Planning: This involves drawing preliminary
lines based on the expected performance of the
product, as well as size, weight, shape, and color,
which constitute a rough estimate of the target costs.
2. Basic Design: This involves preparing additional basic
plans for the product, including design ideas and the
basic cost reductions that can be achieved in this
process.
3. Detailed Design: After the foundations for product
design are established, a detailed design is developed
for the product components that are drawn and
necessary to achieve cost reductions.
2. Design Implementation: In this process, the initial
product lines are transformed into the assembly process
of components to produce the final product. Figure (1)
illustrates these processes.
Figure (1): Steps of the Target Costing Technique
Source: Prepared by the researchers.
The target costing process is carried out at three levels:
the market level, the production level, and the
formation level, respectively. These levels are
intertwined with numerous influences, some of which
are external, such as customer desires, and others
internal, such as technology. The following is a
discussion of these three levels:
1. Market Level: The first level leads to determining the
target selling price of the product. It represents the
beginning of the target costing process and consists of
a single stage: the idea stage.
2. Production Level: The second level is divided into
two stages: the technical stage and the functional
stage. Through the technical stage, the technical form
of the product is crystallized by defining it in detail to
determine design options. The outcome of this process
is the provision of a clear, technically required strategy
that aligns with functional, quality, and cost issues. The
functional stage, on the other hand, develops the
prevailing products and processes to ensure that the
target manufacturing, quality, and costs are achieved
on time. 3. Formation level: At this level, the target
costing technique begins by creating product
structures and determining the costs of models and
purchase prices for external parts. It is divided into two
stages: the design stage and the implementation stage
(Al-Moussawi, 2007: 62). Chapter Three: The Theory of
Constraints - A Conceptual Introduction
3-1 The Concept of the Theory of Constraints
The increasing competition and industrial and
technological progress that emerged in the last century
presented the management of economic units with
significant challenges. To address these challenges, they
require the use of modern strategic costing techniques,
including what is known as the "Theory of Constraints,"
which stipulates the development of a maximum
production plan in light of multiple constraints (Ahmed,
2014: 60). The Theory of Constraints outlines
techniques that attempt to maximize operating income
when confronted with operational processes, which
generally represent "constraints or bottlenecks"
(Horngren et al., 2009: 1263). The Theory of Constraints
can be defined as a strategic management technique
that helps companies effectively improve the product
life cycle and production time as a critical and important
factor. Through this, raw materials are converted into
finished products and profitability is maximized through
management focused on addressing bottlenecks or
constrained resources (Al-Kawaz and Youssef, 2012:
504). The researchers can define it as a contemporary
strategic cost management technique that focuses on
managing production time within the product value
chain. Addressing any bottlenecks, constraints, or
resources that hinder effective product lifecycle
improvement and increase the company's operating
profits.
3-2 Benefits of Applying the Theory of Constraints
Applying the Theory of Constraints has multiple positive
benefits for the company, perhaps the most notable of
which (Brigawi, 2014: 219) are the following:
1. Working to dramatically increase production while
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implementing some changes in operational processes.
2. The Theory of Constraints is one of the most
important tools for encouraging teamwork across the
company, manifested by the team's awareness of
constraints and the need to work together to prepare
for the process of eliminating these constraints.
3. The Theory of Constraints provides immediate and
tangible benefits.
4. Improving service quality and enhancing the
company's competitive position in the business
environment.
5. Ease of developing an effective market strategy and
making key operational decisions.
6. Achieving and enhancing the company's operating
profits by reducing inventory levels and identifying
bottlenecks.
- 3 Principles of the Theory of Constraints
The Theory of Constraints is based on a set of principles
that form the foundation of its practical framework.
The most important of these principles are the
following (Al-Maamouri, 2020: 415-416):
1. The level of output achieved based on the
unconstrained resources is determined by the level of
the system's constrained resources.
2. The utility and effectiveness of the system are
complementary. Utility represents the full operation of
the unconstrained resources to reduce waste, while
effectiveness represents the system's ability to achieve
its objectives regardless of the level of energy used in
the production process.
3. The time margin achieved at the level of constrained
resources is equal to the increase in the rate of output
of the constrained resources.
4. The time margin achieved at the level of
unconstrained resources is a complete illusion,
because the increase in wasted time means an increase
in inventory.
5. The transfer impulse may not equal the production
impulse, as the transfer impulse indicates the amount
of resources transferred from one production process
to a subsequent production process. It is usually less
than the production impulse, given the amount of
resources produced between work centers and
departments.
6. The production impulse should be variable due to
the difference in capacities between production
processes, which results in bottlenecks or constraints
in the production process.
3-4 Steps for Implementing the Theory of Constraints
The theory of constraints is implemented through a set
of main steps, which are as follows:
1. Identifying constraints or (diagnosing the basic
system constraint): Constraints that may be hindering
the possibility of optimal manufacturing are identified.
In other words, the weakest link is identified. It is also
noted that more than one weak link is identified, and
the weak link is selected through continuous
improvement procedures, and so on for the other weak
links in the system (Al-Kawaz and Youssef, 2011: 504).
2. Determine how to manage constraints or (exploit
constraints): The goal is to ensure full exploitation of all
details related to the constraints, which may in turn be
reflected in increasing the output of the bottleneck
point and, consequently, the output of the company as
a whole. This is achieved by identifying all operational
requirements and determining how to manage the
constraints identified in the first step to increase the
margin of achievement (Surur, 2019: 385).
3. Support all other processes by the necessity of
exploiting the constraints or (employing processes for
the constraints): Activities subordinate to supporting
the exploitation of the constraints are directed by
modifying and controlling all other activities and
components within the system, helping to achieve the
maximum possible effectiveness and productivity of the
constraints, even if it requires reducing the production
speed of resources that are not the centers of the
constraints (Ahmed, 2014: 61).
4. Work to increase the effectiveness, efficiency, and
capacity of constraints (lifting the system constraints),
or more precisely, treating the constraints or
eliminating the constraints, i.e., breaking the constraints
(Horngren et al., 2009: 1272).
5. Referencing Constraints or (Searching for New
Constraints): The concept of continuous improvement
within the theory of constraints requires that when a
discovered constraint is overcome or its impact on the
system is removed, a second constraint may emerge,
but it may not be as strong. Consequently, the first step
must be returned to, and the process of identifying the
causes must be continued and repeated (Al-Yamour,
2010: 416).
The figure below illustrates the five steps of continuous
improvement and addressing constraints using the
theory of constraints.
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Figure (2): Steps of the five-dimensional theory of constraints.
Source: Prepared by the researchers.
Section Four: Competitive Advantage - A Conceptual
Introduction
4-1 The Concept of Competitive Advantage
Competitive advantage has been defined in the
specialized literature in multiple ways. Harvy (1986)
defined it as "the source that enhances a company's
position in the market, achieving profits through its
superiority over its competitors in the areas of product,
price, cost, and production focus."
Czepiel (1992) viewed it as "the ability to deliver
superior value to the market for an extended period of
time, typically longer than the design-manufacture-
market cycle of the industry." McGahan (1994) defined
it as "the performance of companies' activities more
efficiently and effectively than competitors." Others
defined it as "the means by which a company can win
its competition against others" (Bishtawi and Jarrah,
2015: 184). 4-2 The Importance of Competitive
Advantage
Interest in competitive advantage is growing in today's
world with the intensification of competition and the
increase in global trade conflict, which forces various
companies to differentiate themselves and gain new
ground in the large global market. Competitive
advantage refers to the characteristic that
distinguishes a company from other competitors and
establishes a strong position vis-à-vis various
stakeholders. Any company can achieve competitive
advantage in many ways, but the most important
methods are for the company's products to be low-
cost (produced at competitive costs and sold at a low
price), cost leadership, or for the company to be able
to distinguish its products physically (product
innovation),
differentiation,
or
impression
(advertising, name, and reputation) (Al-Bishtawi and
Jarrah, 2015: 185).
Thus, the importance of competitive advantage is
demonstrated through the following (Shaarawy, 2021:
63):
1. Generating and adding value to customers and
meeting their needs, ensuring their loyalty, and
providing and improving the company's reputation and
image.
2. Achieving strategic differentiation compared to
competitors in the products and services provided to
customers, and excelling in resources and competencies
in a highly competitive environment.
3. Increasing market share and profitability, generating
new marketing opportunities, and a strong focus on
creative innovation.
4. Entering a new competitive field, such as entering
new markets, dealing with a new type of customer, or
developing a new type of product or service.
5. Forming a new vision for the future of achievable
goals and exploiting available opportunities.
6. Enhancing the ability to deal with all variables
effectively
and
efficiently
by
possessing the
characteristics and capabilities that qualify companies
to achieve excellence and achieve goals.
7. Constructive shift from a policy of covering the local
market to global markets.
8. Encouraging proactive research and development
activity and shifting from the search for solutions to
existing problems to a policy of seeking elements of
excellence, leadership, and knowledge.
4-3 Factors Affecting Competitive Advantage
Companies work to achieve competitive advantage
through the products and services they offer.
Competitive advantage here refers to the ability to meet
customer needs or the value they desire from that
product. However, achieving competitive advantage is
not always a simple task, as it is subject to two basic
factors, namely (Mohammed, 2004: 26-27):
1. Comparative Efficiency: This refers to a company's
ability to produce products or provide services at a
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lower cost than competitors. This factor is influenced
by several key factors, the most important of which
are:
A. Internal Efficiency: This refers to the internal costs
incurred by the company.
B. Reciprocal Organizational Efficiency: This represents
the costs incurred by the company as a result of its
dealings with other companies.
2. Bargaining Power: This allows the company to
bargain with its customers and suppliers to its
advantage. This factor is influenced by several key
factors, the most important of which are:
A. Costs Associated with Research and Development:
This represents the marketing costs of the company,
suppliers, and customers.
B. Unique characteristics of a service or product: The
characteristics of an organization's products or services
that make them different from those of competing
companies.
3. Switching costs: The costs incurred by customers as a
result of refraining from dealing with those competing
companies. This can be illustrated in the following
figure.
Figure (3): Factors affecting competitive advantage
Source: Mohammed, Suad Jassim, Target Costing: A
Tool for Achieving Competitive Advantage, a study
published in the Journal of the College of
Administration and Economics, Issue 3, University of
Baghdad, 2012.
4-4 Sources of Competitive Advantage
Achieving competitive advantage requires linking a
company's internal capabilities with external
capabilities. This means that the sources of
competitive advantage are internal (representing the
company's capabilities, skills, and resources), and
external (representing the general environment),
activities, skills, and internal material supply, as an
open system consisting of inputs, processes, and
outputs that make any part of the system a source of
competitive advantage. The economic unit must strive
to achieve a competitive advantage that matches its
own capabilities and potential (Hraiga et al., 2023: 4).
Failure to identify a competitive advantage through
which it can compete with other companies operating
within the same environment will threaten its existence
and survival in this intensely competitive environment.
The most important sources of competitive advantage
can be identified as follows (Harrison, 2002: 18):
1. Low costs: A company can achieve a competitive
advantage by offering products and services at
affordable prices. Low or at the same prices.
2. Distinctive Service: This refers to the company's
provision of distinguished products and services,
generating complete customer satisfaction and
preference over competing products. This also includes
the addition of significant features and advantages to
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the product or service provided by the company.
3. Technology and High Performance: This refers to the
company's
production
of
distinguished
products/services with high levels of performance,
service, and growth that competing companies cannot
match. Examples of this include world-renowned
consulting firms.
4. Quality: Quality refers to the degree to which the
design characteristics of products and services are
appropriate for function and use, as well as the degree
to which the product/service matches the design
characteristics. This refers to the company's provision
of high-quality products with an appropriate level of
reliability that is difficult for competing companies to
imitate.
5. Service: This refers to the company's provision of
high-level services that competing companies cannot
offer. An example of this is the services provided by PC,
a personal computer manufacturer.
6. Culture or Leadership: The leadership, training, and
selection methods within a company can be described
as a source of competitive advantage because they
lead the company to provide innovative products with
high levels of service that can keep pace with rapid new
developments in the market. Furthermore, company
culture is also considered a source of competitive
advantage. A source of competitive advantage, as
understanding corporate culture is essential if the
company is to be managed strategically.
7. Growth: This occurs through the company
expanding in size or introducing new products to new
markets, which is reflected in the growth of its market
share, a factor in competitive superiority.
8. Time: Time is a source of competitive advantage
through which companies compete. This is due to the
increasing importance of time to both companies and
customers, especially when introducing new products
to the market. Time plays an important role due to
rapid market changes, which require rapid response.
4-5 Conditions for Achieving Competitive Advantage
Researchers identify five basic conditions for
companies to achieve competitive advantage, as
follows (Al-Samarrai et al., 2012: 131):
1. It must be unique or achieve a significant superiority
over its competitors in the competitive market.
2. It must satisfy the desires and needs of existing
customers for long periods.
3. It must be continuously developed to ensure
customer retention and attract new customers.
4. It must have a market and achieve increased market
share. and profitability.
5. It must be difficult for competitors to imitate within a
short period of time.
-6 The Integration Between Target Costing and Theory
of Constraints and Their Role in Enhancing Competitive
Advantage
Target costing and the Theory of Constraints (TOC) are
two strategic approaches in management accounting
aimed at improving companies' financial and
operational performance. They can be combined in an
integrated cycle to enhance competitive advantage by
monitoring and controlling costs and improving the
company's operational efficiency.
First: The Integration Between Target Costing and
Theory of Constraints
Target costing is a management approach, approach, or
technique based on:
A management approach that determines the maximum
acceptable cost based on the target market price and
desired profit.
It focuses on efficient product design by reducing waste
and improving efficiency in the early stages of the
product life cycle.
This approach requires collaboration between different
departments, such as production, marketing, and
design, to achieve the planned cost without
compromising quality.
Meanwhile, the Theory of Constraints focuses on:
It focuses on identifying the limiting element
(bottleneck) in production processes and improving
process flow to increase productivity and maximize
profitability.
It improves the operational capacity of limited resources
rather than simply reducing costs, leading to increased
returns in the long term.
It relies on a continuous improvement methodology
(diagnosing and analyzing bottlenecks, focusing, and
utilizing resources efficiently).
Second: Integrating the two approaches to enhance
competitive advantage
1. Achieving a balance between cost reduction and
process improvement:
Target costing reduces costs through design and
planning, while TOC enhances productivity by
optimizing process flow and eliminating bottlenecks or
constrained resources.
2. Improving the company's responsiveness to the
market:
Target costing ensures that the final product price
matches customer requirements, while TOC ensures
this goal is achieved through the optimal use of
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resources.
3. Reducing waste and increasing productivity:
Target costing helps eliminate unnecessary costs,
while TOC prevents operational slowdowns and
improves the utilization of constrained resources.
4. Achieving sustainable profitability:
Rather than focusing solely on cost reduction,
combining the two approaches leads to improved
production structure and increased return on
investment.
Therefore, target costing can be applied when
designing a new product or developing an existing one.
Its cost is determined based on market research. The
theory of constraints is then used to identify any
production bottlenecks, such as a shortage of raw
materials or the inefficiency of some machinery.
Operations can be restructured to improve
productivity, reduce waste, and rationalize resources.
With this integrated approach, a company can achieve
a strong competitive advantage by offering low-cost
products without sacrificing quality or efficiency. This
is what the researchers will attempt to demonstrate in
the applied aspect of the research. Section Five: The
Practical Aspect
Introduction
In this section of this research, we aim to apply the
theoretical aspect or framework reviewed in the
previous sections, to clarify the practical procedures
for the integration link between product life cycle
costing and target costing, and to demonstrate their
role in enhancing and strengthening the competitive
advantage of the economic unit. This will be applied to
the men's clothing factory in Najaf, for several reasons,
including the role and importance of this factory in the
industrial sector in Najaf and its support for the Iraqi
economy. The factory contributes to meeting market
demand for men's clothing in Najaf Governorate and
nearby governorates, as well as the factory's need to
develop its strategies to reduce costs and improve
product quality to meet customer requirements, thus
strengthening
and
enhancing
the
factory's
competitiveness. We focused the practical application
on analyzing the factory's data for the year (2024) due
to the completeness and availability of this year's data.
The factory produces a variety of products, as we were
able, through inquiries and questions from the
planning and production departments, as well as our
review of product records and statements.
First - The reality of the production system in the
factory and its prospects Its development
The production system consists of departments
specializing in production operations and other
departments that support manufacturing processes and
provide raw materials and other requirements for the
production
of
standardized
products.
These
departments include:
1-
Design and Template Preparation Department:
This department specializes in model creation activities
(design), relying on the personal innovations of
designers or publications from international and Iraqi
fashion houses. Designs submitted directly by clients are
often adopted. Regardless of the design method,
approval of the implementation of the designed model
or template is granted by an evaluation committee
designated for this purpose.
This is followed by the mold preparation process, based
on which the technical equation (Bill of Materials) is
determined for the materials (fabrics) and other
supplies used in the production of the product. The
department also includes the size development process,
through which the optimal use of fabrics and other
supplies is studied with the lowest rates of damage.
2- The Cutting and Preparation Department: The
department includes seven tables equipped with
specialized machines for spreading fabrics to facilitate
efficient inspection using vertical scissors, according to
the patterns implemented and approved by the Design
Department. This process involves:
Reinforcing certain parts of the pattern with adhesive
lining.
Numbering parts and cutting packages according to
the approved system.
A complete and accurate inspection of the pre-cutting
procedures is carried out, with quality control being
monitored.
3- The Technology Department: This department is
responsible for determining the technological path for
the specific product, i.e., distributing the required
production processes across the necessary production
stages, preparing workers with the required skills, and
determining time and movement details.
4- Programming Department: Prepares annual,
monthly, and daily production plans and programs
production across all departments to achieve balanced
flow. It also provides all sewing supplies, utilizing an
electronic computer system in its operations.
5- Sewing Department: The department consists of (13)
production lines, each specialized in producing a specific
quality of clothing models. Each line includes a clear
division of stages and operations performed using
specialized and conventional machines. The sewing
department includes ironing operations for both parts
and the final product using specialized equipment for
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each type of product.
As for the supporting departments that assist
production processes in achieving the system's
objectives, they are as follows:
1- Quality Control Department: This department
includes a group of workers distributed across the
production departments who carry out inspection
activities and ensure that materials, parts, and the final
product are accurately matched to approved
specifications. The laboratory relies on comprehensive
inspection (100%) of all products and their
components throughout all stages of production and
operations. 02. Training Center: This center trains
employees in sewing and tailoring skills, both at the
start of their employment and through retraining and
skill enhancement.
03. Maintenance Department: This department is
responsible for maintaining machines and equipment
and replacing spare parts.
04. Engineering Services Department: This department
plays a key role in providing electricity, compressed
steam, and lighting, and contributes to providing other
service requirements.
The Product Complexity Network in Figure (1) illustrates
the path to transformation and development toward an
efficient factory. Typically, standardized products that
compete on the basis of price generate only small
profits compared to products produced on demand.
Meanwhile, durable products are described as products
that are not in constant demand, and their production
process must be flexible enough to meet customer
requirements.
Although producing standard products represents the
first essential step for many factories, the transition
from standard products to durable, custom-made, or
highly specialized products is possible by making
changes to adapt the manufacturing environment to
the goals of the philosophy to which they are moving.
The management of the Najaf Men's Clothing Factory
has attempted to adapt its production processes to
remove constraints. This adaptation involves adding
optional parts or components to the original product.
The optional components or changes include
development and design processes, as well as
manufacturing and delivery processes. This makes the
product a custom product, all to address the factory's
severely declining market share.
The factory (the case study) can design new products
for all production processes, according to customer
desires and needs. Such products are of particular value
to customers, who are willing to pay a higher price
because they meet their specific preferences. Second:
Case Study: Production of a Product Without
( لكش
4
)
جاتنلإ يجولونكتلا راسملا يف جتنملا ةايح ةرود جذومن
ثحابلا دادعإ نم :ردصملا
ني
R4/G2
Ring
SW2/R4
ةقلح
S2/SW2 Ring
D2/P1
Ring
D1
لاو
د
ي
S1
شرف ةدضنم
ةيداع
2
cells for packaging, 4 cells for ironing, 18 cells for sewing, 2 cells for brushing and cutting, 2 cells for
preparing templates, 4 cells for design
D4
ر
ر
يلاجر
D2
D3
Brush table
P2
P2
P2
R1
S2
G1
G2
SW2
SW1
P1/S2
Ring
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Restrictions:
The case study involved researchers following the
process of implementing a work order to produce a
product, starting from the direct order's arrival at the
factory until the final product was completed, as
follows:
1. On April 20, 2024, an agreement was reached with
the party that submitted the direct order to implement
a contract to produce a product with specifications
specified by the customer and at specific prices. The
factory determined the delivery time in agreement with
the customer.
2. On April 26, 2024, the Design Department began
preparing and implementing the prototype according
to the following procedures:
Designing the prototype took two days after it was
matched to the specifications agreed upon in the
contract.
The designed prototype was not subject to evaluation
by the relevant committee because it was submitted
directly by the customer. Therefore, the prototype was
approved for implementation on April 28, 2024.
3- Within the same period, the Technology Department
began, specifically on April 27, 2024, preparing the
technological process for the product's operations. The
department also determined the time required for each
process, each stage, and each unit of the product.
4- The process of preparing the molds for the work
product took seven days. Based on this stage, the
quantities of raw materials and additional supplies
required to manufacture the product were determined.
The technical equation for the product was prepared
according to the specified steps and levels of the
technological process, as shown in Table 1, to obtain
accurate results and quantities of materials and parts
used in the product's production.
Table (1)
Technical equation for the product* (work jacket)
Level
Description
Quantity
Time
Minute
Notes
Card
POLCA
0
Final Product (Work
Jacket)
1
72.2
Finished
Product
R4/G2
01
Front of Final Product
1
2.5
Assembly
Part
SW2/R4
002
Zipper Ruler
1
4.5
Assembly
Part
SW2/R4
0003
Cleanse Adhesive
1
0.7
Purchased
Part
S2/SW2
0003
Zipper (50 cm)
1
7.0
Purchased
Part
S2/SW2
0003
Fine Model
3
0.6
Detailed
Part
S2/SW2
0003
Rough Model
3
0.6
Detailed
Part
S2/SW2
002
Right Part
1
2.5
Assembly
Part
SW2/R4
0003
Right Chest Pocket
1
1.48
Detailed
Part
S2/Sw2
00004
Chest Pocket
1
0.18
Assembly
Part
SW2/R4
0003
Right Hand
1
3.2
Detailed
Part
S2/SW2
00004
Right Pocket
1
1.5
Assembly
Part
S2/SW2
00004
Hand Knee
Reinforcement
1
1.2
Detailed
Part
Sw2/R4
002
Left Part
1
3.2
Detailed
S2/SW2
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Part
0003
Left Chest Pocket
1
1.48
Finished
Product
S2/SW2
Table (2)
Technical Equation of the Product
Level
Description
Quantity
Time
Notes
Card
POLCA
0003
Left hand
1
3.2
Detailed
Part
S2/SW2
00004
Pocket/Left hand
1
1.5
Detailed
Part
S2/SW2
00004
Knee reinforcement
1
1.2
Assembly
Part
SW2/R4
01
Back of finished
product
1
5.3
Assembly
Part
SW2/R4
002
Back sole
1
1.0
Detailed
Part
S2/Sw2
002
Elastic
44cm
1.7
Purchased
Part
SW2/R4
002
Hand/back part
2
1.0
Assembly
Part
SW2/R4
01
Collar
1
3.28
Detailed
Part
S2/SW2
002
Cleanse adhesive
1
0.07
Purchased
Part
SW2/R4
002
Label
1
0.03
Detailed
Part
S2/SW2
002
Collar part
2
1.2
Assembly
Part
SW2/R4
01
Jordan
2
6.5
Detailed
Part
S2/SW2
002
Jordan reinforcement
2
0.3
Detailed
Part
S2/SW2
002
Rough model
2
1.2
Detailed
Part
S2/SW2
002
Jordan arrow
2
0.18
Detailed
Part
S2/SW2
002
Fine model
2
1.2
Detailed
Part
S2/SW2
Source: Laboratory data, adapted by the researchers.
*: The term used in the laboratory as a substitute for the technical composition of the
product.
1- On May 16, 2024, the Tailoring and Preparation
Department began laying out the fabrics on the tables
in preparation for cutting the pattern for the jacket. The
cutting process for the full batch, equal to the quantity
required and agreed upon in the contract, took a full
week. The laboratory uses a fixed batch size equal to
the quantity agreed upon with the designated party.
The laboratory uses a transfer batch between stages
equal to the size of the mattress and the number of
approved fabric layers.
2- On May 17, 2024, the production line began sewing
the jacket. Following the production line, it became
clear that the laboratory uses a large production batch,
perhaps equal to the order quantity, and a transfer
batch between stages and sewing operations equal to
the size of the mattress designated for each line, with
strict emphasis on a comprehensive inspection of all
produced parts (100%) before moving between
operations. The sewing stage operations and actual
processing times, in addition to the preparation times
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for each operation, can be indicated as follows:
Real time (processing + preparation) minutes
Table (3): Product production stage times
Process Name
Real-time (processing + initialization)
minutes
01 Oversealing Process for Parts Included in
the Product
7.0
02 Marking Process
2.5
03 Cleaning Processes for Parts of Threads
2.5
04 Sewing Processes
14.5
05 Fitting Process
13.0
06 Jacket Pinning Process
2.5
07 Side Appliqué
4.5
08 Cutting and Turning Parts
2.5
09 Inspection Processes
7.0
010 Ironing Processes
6.0
Real-Time Processing
62.0
Source: Specific times in lab schedules. Regarding the
allocated production capacity, (4) production lines
were used in the sewing phase on the same date (May
17 to June 5), as follows:
Daily production capacity = 7.5 hours 60 minutes = 450
minutes per line
Available production capacity = (processing time for the
critical process in the line) 450 / 7 = 64 units
Therefore, the allocated production capacity for this
product = 64 (4) lines = 256 units per day
Producing 3,000 units took 16 actual working days
Allocated production capacity for the period = 256 16
= 4,096 units
Capacity utilization rate = 3,000/4,096 100 = 73%
1- The product packaging department received the
product after sewing and ironing, and it underwent a
comprehensive inspection of the materials and
components included in its composition. However, the
final product is inspected during the packaging phase,
focusing on specifications. The appearance is then
completed, and the final product is packaged.
2- (3,000) units of final product were delivered on June
5, 2024, to the main warehouse unit, deemed ready for
delivery to the customer.
The lead time is calculated as the average time required
to process the order, i.e., from the date of agreement
on the contract, April 20, until June 5. The following
formula can be relied upon (Leon, 2000, p. 11):
Lead time = Queue time (QT) + Mean time to process a
job (Tj)
Where:
QT: represents the average waiting time for a work
order (i.e., from the time the order arrives until
processing begins).
Tj: is the average time to process a work order,
including the preparation and processing time for all
parts in the production batch.
Lead time to production = Waiting time + Processing
time for all parts in the batch.
3,000 units of product = 5 days + 32 days
= 37 days.
Based on the above, it can be said that waiting times
represent a large proportion of lead times, as the actual
processing time plus preparation time at all stages is
represented by the following:
Table (4): Work time
Model building (design) took place
One day
Mold preparation
One day
Technical route configuration and construction
One day
Sewing department used 73% of the energy
16 days
Packaging
One day
Therefore, after removing a portion of the waiting time in office and production operations, the lead time
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becomes 20 days, and the percentage reduction in lead
time is 46%.
Third - Measuring the Effects of Reducing Lead Time
Reducing lead time is accompanied by economic
savings in costs, according to operational indicators of
the production system, after removing other
constraints, as follows:
1. A significant reduction in work-in-progress inventory
between stages.
2. A reduction in finished product inventory.
3. A reduction in direct labor.
4. A reduction in overtime, perhaps even a complete
non-requirement.
5. A very significant waste reduction.
The researchers adopted the indicators in Table 4 based
on mathematical equations adopted by the Rapid
Response Center as a final step in removing constraints.
However, due to the inability to provide the necessary
data from the application environment, despite
numerous attempts, the table indicates indicators at
the level of overall factory activity and the level of
operational processes, demonstrating the impact of
reducing lead time after removing constraints. As a
result, the floor space used for production operations
can be reduced, especially after arranging and
organizing production facilities according to groups or
"cells," as a primary requirement to eliminate
constraints, rather than production departments in the
factory (case study), which increase the waiting time for
work orders. Figure 5 represents a proposed design for
arranging production facilities according to the
principles of eliminating constraints.
Figure (5): Interlocking loops and POLCA card movement
It works as follows:
01. Establish groups of planned products, focusing on
age groups (boys, youth and girls, men, and women),
with each group focusing on a segment of the market
and attempting to develop the product within that
framework. Each group has its production line
consisting of a group of cells.
02. Implement the POLCA mechanism to control the
flow of materials and parts during production processes
and reduce waiting times by creating a closed loop
linking every two cells together and throughout the
technological process of producing each product
category.
03. Establish a unit called Demand Management,
responsible for receiving direct orders from customers
Source:
Suri, Rajan, Quick Response Manufacturing: A competitive strategy for the 21 st century, proceedings of the
2002, POLCA Implementation wok shop.
F3
P1
P2
F1
F2
A1
A2
A3
A4
[
S1
P1/F2 Ring
A4/S1 Ring
F2/A4 ةقلح
One Shipping Cells
Single cell charging
Four Assembly
Cells
4 cells for assembly
Three Fabrication
Cells
3
cells for manufacturing
Two Printing Cells
Two cells for printing
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and planning their production within a rapid response
framework, utilizing information and communication
technologies to achieve its objectives.
04. Use computer-aided design technology, supporting
the design department in the laboratory with
engineering and design skills and efficient research and
development activities, and utilizing an integrated
database that includes:
A. Product specifications for each of the approved
categories.
B. Engineering standards.
T- Technical Structure (BOM)
05. Building integrated relationships with suppliers
inside and outside the country to achieve rapid
response to customer needs.
06. Activating the role of activities supporting the
production process and implementing continuous
improvements to increase their efficiency in providing
services.
Implementing Target Costing
Target costing is implemented through organized,
sequential, and well-thought-out steps, relying on
realistic data from the market and competitors. These
steps are as follows:
First. Determining the product research sample: The
men's suit was chosen as the research sample based on
the importance of this product among the products of
the "Al-Najaf Ready-Made Men's Clothing Factory." The
target group for this product is employees, university
professors, business people, and youth.
Second. Determining the target price: When analyzing
market prices for competing products, we found a
discrepancy and variation in the prices of men's suits in
the markets and for competing products. Table 3
illustrates the most important competitors' prices, as
follows:
Table (5): Prices of competing products in the Iraqi domestic market
Suit Type
Average price
(in dinars)
Details
Sales
percentage
Turkish Jacket
60,000
They are of medium to high quality and are
among the most attractive and best-selling
suits on the market.
52
%
Chinese Jacket
20,000
They are of poor to medium quality, have a
low price, and have a low sales rate.
17
%
(Second Door)
35,000
They are of medium to high quality, have a
relatively low price, and have a low sales
rate.
31
%
Chinese Jacket
115000
Source: Prepared by researchers based on personal
interviews with some shop owners.
We find variations in the prices of men's suits in the
markets of Najaf based on their source and quality.
Turkish suits are of medium to high quality and are
popular among consumers. Chinese suits are divided
into two categories, as shop owners call them "first-
class" and "second-class" suits. The first-class Chinese
suit is a suitable economical option, characterized by a
variety of designs and quality, and is the best-selling
suit. The second-class suit is characterized by poor
quality, a low price, and low sales. In light of this
information, the target price can be determined based
on the average prices of competing products in the
market. The target selling price for a single men's suit
would be 60,000 dinars. The average price was used
because it represents the most accurate price in this
market and can eliminate price fluctuations and
variations. It was found using the equation:
Third. "Determining the Target Profit": The target profit
is determined based on the desired profitability ratio
within the economic unit. These units set a profit
margin of between 15% and 20% of the target selling
price. Given the intense competition in the Najaf
market for men's suits, a profit margin of 20% of the
target selling price was chosen. Therefore, the target
profit is 12,000 dinars.
x=
〖
60,000
〗
^ ×20%=12,000
Fourth: "Calculating the Target Cost": The target cost is
calculated by subtracting the target profit from the
target price. For the men's suit in question, the target
cost is 48,000 dinars.
x=60,000-12,000=
〖
48,000
〗
_^0
The results of applying product lifecycle costing and
target costing systematically and thoughtfully
demonstrate the precision in analyzing costs and
dividing them according to the product lifecycle stages.
This reflects clarity in tracking and distributing costs,
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which contributes to improved resource management.
The implementation of the target cost and setting it at
(48,000 dinars) achieves consistency with average
market prices, supporting the competitiveness of the
men's suit of the "Men's Clothing Factory in Najaf Al-
Ashraf" in terms of cost efficiency per suit. The cost per
unit (22,035 dinars) based on total costs (3,312,963,898
dinars) and the number of units produced (150,350
suits) indicates the achievement of high production
efficiency, thus enabling competitive profits. This is in
addition to aligning the product with the market and
adopting a target price based on market analysis and
competitor prices, which reflects a realistic
understanding of market trends and consumer needs.
The low unit cost Compared to the target costing, it
provides an opportunity to enhance profitability or
improve the product to support the competitive
advantage of the men's clothing business in Najaf Al-
Ashraf. The success of the application of methods by
applying the product life cycle costs and the application
of the target costing for cost management enhances
production and marketing efficiency. This makes this
application a practical example that can be adopted to
develop other products in the men's clothing factory in
Najaf. This supports and proves the research hypothesis
based on the fact that the application of product life
cycle costs and the application of the target costing in
an integrated manner supports the competitive
advantage of companies.
c Section Six: Conclusions and Recommendations
CONCLUSIONS
1. The total lifecycle cost of the men's suit product
amounted to 3,312,963,898 dinars, with a unit cost of
22,035 dinars. The production phase (manufacturing)
represents the largest proportion of total costs, which
requires a focus on improving production processes to
reduce costs.
2. The target price for the men's suit, using the target
cost, is 60,000 dinars, based on average market prices.
The target profit is 12,000 dinars per suit, resulting in a
target cost of 48,000 dinars, demonstrating the
potential for achieving competitive profitability targets.
3. Competing products (Turkish and Chinese) vary in
quality and price, making the average-quality local suit
a suitable option for most of the target group.
4. Target costing is a tool that emerged as a result of the
continued growth in competition as an applied
approach to cost management. It is a pricing method
whereby a target cost is determined based on the
premise that price drives cost. It also contributes to
focusing on product and process design, taking into
account all costs related to the product's life cycle.
5. Competitive advantage is the extent to which
companies are able to perform their activities in a
manner that surpasses that of their competitors and is
difficult to imitate, leading to the creation of high
perceived value for the customer and value for the
company.
6. Target costing begins with a target price, which
enables it to compete in the market by reaching the
cost and reducing costs to achieve long-term profit.
This is in contrast to other traditional costing methods
that begin with cost to reach price and do not focus on
reducing costs.
7. The goal of companies in monitoring and reducing
their costs, controlling and rationalizing them, and
adopting specific strategies is the essential point that
ensures they maintain this competitive advantage.
However, this can only be achieved through the
company's study and understanding of the target
costing method and the most important steps upon
which it is based, which include setting a target price
and profit margin. 6-2:
Recommendations
Based on the previous findings, the study recommends
the following:
1. It is necessary to find solutions to reduce and lower
production (manufacturing) costs by reducing raw
material waste and improving the efficiency of direct
industrial work.
2. We recommend that the management of the Najaf
Men's Clothing Factory implement modern and
contemporary cost and management techniques to
increase productivity and reduce indirect industrial
costs. They also recommend focusing on techniques
and methods that improve product quality (men's suits)
to reach the level of Turkish products while maintaining
competitive costs.
3. It is necessary for the management of the Najaf
Men's Clothing Factory to adhere to the target price of
60,000 dinars for men's suits to ensure customer
attraction
and
achieve
profitability
and
competitiveness goals. They also recommend offering
competitive advertising and promotional offers to gain
a higher market share compared to competitors.
4. It is necessary to follow a set of steps, including
offering a product that meets customer desires, then
setting a target price based on the customer's
perceived value of the product and competitors' prices,
determining the target profit margin, and then setting
the target cost.
5. Companies need to implement target costing due to
the benefits, advantages, and competitiveness it brings
in light of global economic and technological
developments.
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Journal of Social Sciences and Humanities Research Fundamentals
6. It is essential to activate the elements necessary to
implement this integrated approach further, utilize
currently available elements as a preliminary step
toward its implementation, and work to remove
obstacles to the implementation of this integrated
approach from strategic costing tools.
7. It is essential to adopt new technologies and
methods to reduce costs and improve product quality,
as well as achieve a competitive advantage in the
fiercely competitive market.
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