ABSTRACT
The more radical design changes possible under interorganizational cost investigations require more intense interactions among the design teams. Interorganizational cost investigations derive their power from the increased scope of the design changes that can be made to both the end product and the components it contains. The ability to initiate an interorganizational cost investigation can be likened to the ability of any worker in a just-in-time production setting to stop the line whenever a defect is encountered. In interorganizational cost investigations, the interactions between the buyer's and suppliers' design teams are more extensive than in chained target costing. The objective is to identify product and component designs that reduce the total of the buyer's and suppliers' costs. Such investigations were observed between Komatsu and Toyo Radiator and among Tokyo Motors, Yokohama, and Kamakura. At Komatsu, they were called cost balance verifications and, in the Tokyo-Yokohama-Kamakura chain, minimum cost investigations.
