A critical analysis of the application of target costing in the development of social housing projects

Abstract

Target costing is an approach widely used in manufacturing and represents an innovation in the product development process, in which cost, quality and functionality are not merely outcomes of the design process, but input parameters. This paper investigates the applicability of target costing in the development of social housing projects (SHP). Such projects have many peculiarities in relation to manufacturing and there is no evidence that this approach is suitable for the development of SHP, or even building projects in general. This paper aims to investigate how and why certain features of SHP – most of them also common in other types of construction projects – influence the applicability of target costing. These questions were analyzed based on the adaptation of concepts from manufacturing to construction and on an exploratory case study conducted in a public housing company. The study suggests to adapt target costing to this context, to concentrate on the most beneficial activities, or to adjust the context in order to maximize the benefits and minimize.