ABSTRACT
The lean enterprise typically outsources a high percentage of the value-added of its products. Cost management must be applied across the entire life of the product by everyone involved in its design and manufacture. Interorganizational cost management can be undertaken successfully only when the buyer-supplier relationships are lean—that is, cooperative, stable, and mutually beneficial. In addition, these relationships should be disciplined across the entire supply chain. Such discipline is created by the protocols characteristic of lean supplier networks. Buyer-supplier interface includes all activities and processes associated with the transfer of goods or services from one firm to another. For many firms in the middle or at the end of a target costing chain, the ability to remain profitable is determined, in part, by their ability to manage the survival triplet for their products. Cost leadership and differentiation strategies are successful when the survival zones for a firm's products are large.
