There is scope for the development of a collaborative form of target cost management that delivers value to all parties in the food supply chain. Although the term ‘target cost management’ is not currently in use in the agricultural industry, it has been identified by several writers as a potential tool for the agricultural industry Humenik et al, 2005; Theussven et al, 2005; Jack and Jones, 2007). In the CIMA project that forms a basis for this discussion paper, it was found that farmers and other land-based business managers are using what could be termed an intuitive form of target cost management, in that primary producers were working backwards from potential market prices to set (usually informal) cost targets and re-engineering their operating practices in order to achieve that target. However, this has not been formally termed target cost management nor developed into a methodology. Furthermore, anecdotal evidence exists that producers in contracting arrangements with corporate customers in the food supply chain – processors, distributors and retailers are working to cost targets.
|Place of Publication||London|
|Number of pages||10|
|Publication status||Published - Oct 2008|