• Hiram Phillips could have used benchmarking to assist him in his cost reduction efforts by following the five steps of benchmarking. Initially, an internal study and preliminary competitive analysis should have been conducted to determine its current performance relative to its size. Some of these activities include the cost of labor, delivery of shipments, time spent on the phone to customer service, and the cost of sales commissions to employees. Using internal company data and preliminary analysis of external competition, using industry quality comparisons from reliable consumer reports, the scope and significance of the study for each area would be determined. • In the second phase, a benchmarking team composed of people committed to the Hiram benchmarking project should have been developed. The benchmarking team should include people from all functional areas of Rainbarrel. However, the benchmarking team's commitment needs to be a long-term thing because adopting new methods and procedures can take several years for an organizational culture to fully adopt the change. Additionally, Hiram should have gotten senior management support to give the benchmarking team the authority to drive changes by developing a clear set of goals to guide the benchmarking effort and empowering employees to make changes. • In the third step, Hiram should identify benchmarking partners who are willing participants who have similar businesses and know the process. Finding a company of the same or similar size as the company with specific activities or methods being benchmarked would have been a great benchmarking partner for Rainbarrel. Having a wide range of participants in the benchmarking would have helped the company increase its costs… from the middle of the paper… to suppliers to manufacturing, distribution and services. If distribution, support, training, or other downstream activities significantly impact the cost of a product, then employees with expertise in these areas should be actively involved in product design to minimize these costs. If Rainbarrel uses the target costing system for profit planning and cost management, the company can focus on minimizing product costs in the RD&E phase of a product's total life cycle rather than the more expensive way of trying to reduce them during the production phase. This system will help reduce costs and provide the ability to be more efficient and effective. References: Atkinson, A.A., Kaplan, R.S., Matsumura, E.M., Young, S.M. (2007). Management accounting (5th ed.). Upper Saddle River, New Jersey: Pearson Education, Inc.