Modification History
New unit, superseding MSACMT630A Optimise cost of product* - Not equivalent
* Prerequisite MSACMT631A Undertake value analysis of product costs in terms of customer requirements- removed
Unit Descriptor
This unit of competency covers the skills and knowledge required to examine the costs of a product or service and determine methods of reducing costs.
Application of the Unit
This unit applies to an individual a who is required to undertake a detailed study of a product or service’s costs, including analysing it by its cost components to determining the best method of lowering the cost overall. This unit differs from MSS405031A Undertake value analysis of a product or process costs in terms of customer requirements, in that it looks at all costs, including overheads and takes a wider and more traditional approach to the cost of the product. Information and cost reduction strategies gained from the application of this unit may support other cost approaches in the enterprise, including value stream costing.
This unit primarily requires the application of skills associated with communication in gathering, analysing and applying information. Problem solving, initiative and enterprise, and planning and organising are required to calculate cost components and determine cost optimisation strategies. This unit also requires aspects of self-management and learning to ensure feedback and new learning is integrated into costing methods.
Licensing/Regulatory Information
Not applicable.
Pre-Requisites
Not applicable.
Employability Skills Information
This unit contains employability skills.
Elements and Performance Criteria Pre-Content
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Elements describe the essential outcomes of a unit of competency. |
Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide. |
Elements and Performance Criteria
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1 |
Analyse total cost components of a product or service |
1.1 |
Identify all cost components of product or service |
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1.2 |
Allocate cost components to major categories, such as overhead, depreciation, energy, consumables and labour |
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1.3 |
Distinguish between costs which directly deliver customer features/benefits and waste |
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2 |
Optimise costs |
2.1 |
Analyse causes of costs which lead to customer features/benefit |
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2.2 |
Determine methods of increasing the customer benefit/cost ratio |
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2.3 |
Analyse causes of waste costs |
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2.4 |
Determine methods of reducing/eliminating waste costs |
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2.5 |
Analyse interactions between cost components |
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2.6 |
Check that one method of reducing costs does not cause an increase in another cost/reduction in consumer benefit |
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2.7 |
Check that cost reduction plans do not reduce required levels of regulatory compliance or occupational health and safety (OHS) |
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3 |
Implement cost optimisation |
3.1 |
Develop cost optimisation plans |
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3.2 |
Negotiate with relevant people to agree on implementation plans |
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3.3 |
Take actions to implement the cost optimisation |
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3.4 |
Monitor the implementation of the cost optimisation |
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3.5 |
Make adjustments to the plan, as required |
Required Skills and Knowledge
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This section describes the skills and knowledge required for this unit. |
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Required skills |
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Required skills include:
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Required knowledge |
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Required knowledge includes:
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Evidence Guide
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The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package. |
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Critical aspects for assessment and evidence required to demonstrate competency in this unit |
A person who demonstrates competency in this unit must be able to provide evidence of their ability to:
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Context of and specific resources for assessment |
Assessment of performance must be undertaken in a workplace using or implementing one or more competitive systems and practices. Access may be required to:
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Method of assessment |
A holistic approach should be taken to the assessment. Competence in this unit may be assessed by using a combination of the following to generate evidence:
In all cases it is expected that practical assessment will be combined with targeted questioning to assess underpinning knowledge. Where applicable, reasonable adjustment must be made to work environments and training situations to accommodate ethnicity, age, gender, demographics and disability. |
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Guidance information for assessment |
Assessment processes and techniques must be culturally appropriate and appropriate to the oracy, language and literacy capacity of the candidate and the work being performed. |
Range Statement
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The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included. |
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Competitive systems and practices |
Competitive systems and practices may include, but are not limited to:
Competitive systems and practices should be interpreted so as to take into account:
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Waste |
Waste (also known as muda in the Toyota Production System and its derivatives) is any activity which does not contribute to customer benefit/features in the product. Within operations, categories of waste include:
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Cost |
Cost includes:
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Cost optimisation plans |
Cost optimisation plans should include:
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Unit Sector(s)
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Unit sector |
Competitive systems and practices |
Custom Content Section
Not applicable.
