Functional Cost analysis and Strategic Performance Measurement

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The current year research is based on the original plan, and also an extension of the last year's. The research implemented this year is a field study of cost management systems and performance evaluation systems in both Japanese and UK companies. The research of this year is concentrated on both manufacturing and non-manufacturing companies. Therefore, the research has done at a manufacturing company of hi-tech parts as a manufacturing company and at a public transportation company as non-manufacturing company in UK.The research in Japan has done the same ways at a precision machine company and an automobile parts company as manufacturing companies, and at a food service company as a representative of service industry.The result of the research is that traditional performance measurement insisting only financial performance has a limitation because of rapid change of business environment. Therefore, it is needed to have new integrated performance measurement such as balanced scorecard which cares both internal and external of the company. There are some possibilties that functional analysis-based ABC might be applicable for the purpose of cost management at both manufacturing and non-manufacturing companies in Japan. Actually it is recognized that it has been implemented as one of the cost management tools in practices. It is also possible to recognize that the total cost management through new production system might be able to contribute for increasing profits, because the system can reduce all kinds of waste and integrate order getting activities, production activities and distribution activities to a set of business activities and manage them as one process to reduce a lead time.These research results will be published in research papers and a book in the near future.