Kaizen Costing System and Product Cost Reduction: Evidence from Selected Manufacturing Companies in Osun State, Nigeria

Abstract

The hub of survival of any manufacturing company depends on how best it could manage its cost of Production without negative effects on production quality. To achieve this, the management needs strategies that will improve performance in terms of quality, cost and service delivery.  Such strategy should entail the process of redesigning measures aimed at cost reduction with resulting effect on the market price of the product. One of such strategies is Kiazen which has to do with activities that continually improve all business functions and processes at a reduced cost and without compromising the expected standards.  The study therefore examines the effect of implementation of Kiazen Costing System on production cost reduction in manufacturing Companies. It also examines the effect of Accountants skills in relation to implementation of Kiazen Costing System and product cost reduction.  The study adopted primary data with a sample of 85 respondents comprising accountants across selected Manufacturing Companies in Osun State, South-West, Nigeria.  Two hypotheses were formulated and tested in the study.  In addition, descriptive statistics, kolmogorov-smirrov, Shapiro-wilk and chi-square were used in analyzing the primary data.  The result of the data analysis showed that the implementation of Kaizen Costing system has significance effect on product cost reduction in manufacturing companies.  The study further revealed that qualifications of an accountant (whether B.Sc., M.Sc. or PhD) have no significant effect on the use of Kaizen Costing system.  The Study recommends that manufacturing firms in Nigeria should adopt and implement Kaizen Costing system as it reduces the cost of production without as well as enhancing profitability.