• Hiram Phillips could have used benchmarking to assist in his cost reduction efforts by following the five steps of benchmarking. As a first step, an internal study and preliminary competitive analysis should have been conducted to determine its current performance in its dimensions. Some of these activities include the cost of labor, delivery of shipments, time spent on the phone in customer service, and the cost of employee sales commissions. Using internal company data and preliminary external competitive analysis, as well as industry quality comparisons from reliable consumer reports, would help determine the scope and importance of the study for each area. • In the second step, a benchmarking team should have consisted of committed people. to Hiram's benchmarking project. The benchmarking team should include people from all functional areas of Rainbarrel. However, the benchmarking team's commitment must be long-term, as adopting new methods and procedures can take several years before an organizational culture fully embraces the change. Additionally, Hiram should have secured support from senior management to give the benchmarking team the authority to lead the changes, developing a clear set of objectives to guide the benchmarking effort and by empowering employees to make changes. • In the third step, Hiram should have identified benchmarking partners who are willing participants who have similar activities and are familiar with the process. Finding a company of the same or similar size as the company with a specific activity or method being evaluated would have made a great benchmarking partner for Rainbarrel. Having a wide range of benchmarking participants would have helped the company increase costs across paper suppliers, manufacturing, distribution and services. If distribution, service, training, or other downstream activities have a significant impact on the cost of a product, then employees who are experts 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 will be able to focus on minimizing the costs of its products during the RD&E phase of the total life cycle of a product. product rather than the more expensive way of trying to reduce them during the manufacturing phase. This system will help reduce costs and also provide the opportunity to be more efficient and effective. Reference: Atkinson, AA, Kaplan, RS, Matsumura, EM, Young, SM (2007). Management Accounting (5th ed.). Upper Saddle River, NJ: Pearson Education, Inc..