Development of an Effective Cost Management Method for Malaysian SMEs
Cost management is essential to manufacturing company for sustaining market share, competitive position and profit growth. In the past, many SMEs had made mistakes during their cost management process. Two of these major mistakes were due to lack of knowledge in cost management and not knowing the right technique to use for monitoring all production costs. This paper has two main objectives: first, to present a case study on cost management method at a local SME; and secondly, to point out their mistakes and weaknesses of its cost management system. Later, the authors will present a case study of an effective cost management method practiced by a Japanese multinational company. Based on the findings of both case studies, the authors shall propose an effective costing management method that may be applicable to local SMEs for monitoring their production costs. The authors believed this costing management method will be able to help local SMEs to improve their cost management system, which eventually giving them the opportunity to achieve more profitable sales and sustainable competitive position in global market place.
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