FOREIGN EXPERIENCE IN MANAGING PRODUCTION COSTS

Abstract

This article examines foreign experiences in production cost management and assesses their potential adaptation to the Ukrainian economic context. The study focuses on three prominent approaches: the Japanese target costing model, the American “Activity-Based Costing” (ABC) method, and the European “lean production” concept. Target costing is explored as a tool for cost forecasting at the product development stage, enabling cost reduction through early planning and cross-departmental integration. The ABC method is analyzed as a precise mechanism for allocating overhead costs, facilitating the identification of inefficiencies and resource optimization, particularly in complex industries such as aviation and machinery manufacturing. “Lean production” is investigated as a strategy for minimizing waste, enhancing operational efficiency without significant capital investment. The research draws on an extensive literature review, including works by A. Atkinson, R. Kaplan, E. Matsumura, S. Young, R. Cooper, R. Slagmulder, C. Drury, as well as reports from McKinsey & Company and Deloitte. The analysis reveals that each approach offers distinct advantages: target costing is market-driven, ABC emphasizes accounting precision, and “lean” prioritizes operational flexibility. However, implementing these methods in Ukraine faces challenges, including limited resources, technological gaps, and the need for organizational culture shifts. The conclusions provide recommendations for adapting these practices, suggesting pilot projects at high-potential enterprises as a starting point. The study underscores that leveraging international expertise can serve as a foundation for modernizing Ukrainian production and enhancing its global competitiveness, while also highlighting the importance of a comprehensive approach that considers both economic and socio-cultural factors to ensure sustainable development of the industrial sector in the long term.