1	Product Cost Analysis Pavan Kumar Vijay President, the ICSI
2	The Key Developments Effecting Costing Decisions Technological Advances Globalisation – WTO and Free Economies Changing Focus from Production to Customer – Going back to Mahatma Gandhi School of Thought Changing Organisational Structures Social, Political and Cultural Changes Corporate Governance and Rethinking Ethics
3	Corporate Governance and Ethics Creditability and Trust lead to Customer Loyalty - People prefer trusted products and companies Transparency in Costing - leading to development of industry best practices The Cost of Capital is lowest for well governed companies (Mckinsey Survey) Wealth Sharing leads to growing society - thus increasing market demand and economy of scales Reduction is Wastage saves costs as well as Natural Resources
4	Strategic Costing Decisions SWOT Analysis Identifying Critical Success Factors Value Chain Analysis Cost of Adhering and Not Adhering Ethics Use of Appropriate Tool to Analyse Costs Assumptions to be made in Product Costing
5	Developments in Cost Analysis QCT Based Decisions – Quality, Cost and Time Life Cycle Costing – Analyse the costs of activities that occur over the life cycle of the product Target Costing than Cost Plus Costing – Target Costing is the product cost that must be achieved for a product to be viable in the long term Activity Based Costing/ Management - analysing activities, cost drivers and performance so that customer value and profitability are improved
6	Developments in Cost Analysis… Contd. Value Engineering –an organized approach to the identification and elimination of unnecessary cost Business Process Reengineering – Fundamental rethinking and redesign of critical processes Increasing Importance to Quality Costs – Prevention Costs Quality Control Costs Cost of Poor Quality Risk Management and Pricing
7	The Costing Strategy No single method is used in ISOLATION to analyse costs There is always possibility to reduce costs and add value, so continue research Involve employees at all levels in generating more ideas to reduce cost Knowledge Management is key to reducing costs Ethics pay in long run so be transparent and accountable
8	The Role of Professionals - CS, CWA and CA
9	For Strong Corporate Citizenry
10	Company Secretary is Vital Link
11	Company Secretary at Centre Stage
12	Company Secretaries and Product Cost Analysis Company Secretaries specialise in corporate governance, legal and ethical dimension of Product Costing Company Secretaries advice Board on Strategic Costing Decisions due of multi-disciplinary Knowledge Being Secretary to the Board and Audit Committee company Secretary consolidates all information and takes necessary approvals Company Secretaries have access to confidential information that may be critical for Product Costing
13	The Future Ahead Survival of the Fittest is punch line The WTO – Opportunities and Challenges Ahead Customer is more educated and demanding than ever No Compromise on Quality and Ethics Shift from ‘Divide and Rule’ to ‘Unite and Rule’ Tough time ahead for Small Consulting Firms of CSs, CWAs, CAs and Lawyers – few takers for their limited expertise
14
15
16
17
18
19
20
21
22	Global Benefits Access to Global Markets Access to Global Suppliers Access to Global Financial Resources Access to Global Manpower Access to Global Best Practices Access to Global Research
23	Global Challenges Quality of Service with Time Commitment International Operational Infrastructure High degree of competition among professionals Enhanced responsibility towards international community International language and cross-cultural issues Key Relationships in Foreign Countries
24	"Coming Together is Beginning" Coming Together is Beginning Meeting Together is Progress and Working Together is Success
25	"Success can be achieved globally..." Success can be achieved globally by synergising on core competencies i.e
26
27
28	Multinational Mega Firms Global Reach of Professionals Wider Area of Expertise Active Networking and Public Relations Global Infrastructure Sharing Best Practices/ Expertise in Management of Firm
29
30	"Let Us Come Together" Let Us Come Together to Grow Together