What are the key skills and tools for effective target costing and reverse engineering?

1 Target costing basics

Target costing is a method of setting the desired cost of a product based on the market price and the required profit margin. It involves identifying the target market segment, analyzing the customer value and willingness to pay, and estimating the competitor's costs and prices. Then, it requires setting a target cost that is lower than the market price minus the profit margin, and aligning the design, production, and distribution processes to achieve it.

2 Reverse engineering basics

Reverse engineering is a process of analyzing an existing product or system to understand how it works, what are its components and functions, and how it can be improved or modified. It involves disassembling, measuring, testing, and documenting the product or system, and comparing it with similar or competing products or systems. It can help you gain insights into the design choices, performance, quality, and cost drivers of the product or system, and identify opportunities for innovation or differentiation.

3 Skills for target costing and reverse engineering

To perform target costing and reverse engineering effectively, you need to have a combination of technical, analytical, and creative skills. Technical skills include the ability to use various tools and methods for measuring, testing, and modeling the product or system, such as CAD, CAM, FEA, CFD, etc. Analytical skills include the ability to collect, process, and interpret data from various sources, such as market research, customer feedback, competitor analysis, etc. Creative skills include the ability to generate and evaluate alternative solutions, and to apply design thinking and brainstorming techniques.

4 Tools for target costing and reverse engineering

There are various tools and software that can assist in target costing and reverse engineering, depending on the type and complexity of the product or system. For instance, benchmarking tools like QFD and FMEA help compare products or systems in terms of features, functions, performance, quality, and cost. Cost estimation tools such as ABC and LCC estimate the cost of the product or system based on materials, labor, overhead, and other factors. Additionally, reverse engineering tools such as 3D scanners and X-rays capture and analyze physical and functional characteristics of the product or system.