Fixed Cost, also known asFixed expenses）Relative toVariable costIt refers to the cost that the total cost can remain unchanged during a certain period and within a certain range of business volume without being affected by changes in business volume.
(1) The total cost does not change with the business volume, which is a fixed amount;
(2) The fixed cost borne by the unit business volume (that is, the unit fixed cost) changes inversely with the increase or decrease of the business volume[1]。
Range
The total fixed cost is fixed only in a certain period and within a certain business volume, which means that the fixed cost is conditional.A certain range mentioned here is called the relevant range.If the business volume changes beyond this range, fixed costs will change.
Costs necessary to maintain the business ability of the enterprise to provide products and services, such as depreciation of plant and machinery equipment, property taxes, house rent, salaries of management personnel, etc.This kind of cost is also called capacity cost because it is associated with maintaining the business ability of the enterprise.Once the amount of such costs is determined, they cannot be easily changed, so they are quite restrictive[1]。
discretionary fixed cost
The management authority of the enterpriseFiscal yearBefore the startbudgetThe fixed costs, such as new product development costs, advertising costs, staff training costs, etc.Because of this kind of costbudgetThe budget amount is only valid in the budget period. Enterprise leaders can determine the budget amount in different budget periods according to the change of specific circumstances. Therefore, it is also called self determining fixed cost.The amount of such costs is not binding and can be determined according to different circumstances.
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Traditional cost management
Traditional cost management
Traditional cost management is mainly through reducing various service items or contentsraw materialTo save moneyControl costsThe purpose of.It essentially uses“Add value”In order to reduce costs, we have not combined cost management with competitive advantage.
Strategic cost management
Strategic cost management
Strategic cost managementMainly through mining enterprisesHidden cost, the analysis and utilization of cost information through strategic managementKey stepsProvide strategic cost information and obtain it from beginning to endCost advantageSo as to form the competitive advantage of the enterprise and improveCore competitiveness, ahead of your opponent.Strategic cost management emphasizes knowing oneself and the other, revealing the relative cost position of enterprises compared with competitors, and seeking ways to continuously reduce costs.It can also be said that cost management is carried out to obtain and maintain the lasting competitive advantage of enterprises[1]。
The main purpose of strategic management of enterprises is to seek growth and return in sustainable development.It is also called "seeking benefits from management".As an important part of strategic management, strategycost control It has replaced the traditional cost management and become a favorable weapon for enterprises to strengthen cost management and gain competitive advantage.
Value chain analysis is a tool for seeking to determine the competitive advantage of enterprises.Enterprise value chainThe analysis is based onEnterprise activitiesBreak down toValue activitiesTo determine costs and benefits based on the enterprise'sstrategic targetMake trade-offs to determine the competitive advantage of the enterprise.When all activities in the enterprise value chain accumulatetotal costWhen it is smaller than the competitors, it has a strategic cost advantage.
Competitor Analysis
The competitor analysis method is to analyze the information and evidence of competitors in terms of value chain, advantages and disadvantages, reaction mode, competitive strategy, and even core competitiveness, and consider their situation in the competition, actions and reactions adopted, so as to provide a reference basis for enterprise decision-making and business activities.
Strategic cost driver analysis method
strategyCost driver The analysis method is to analyze the root cause of cost occurrence, so as to control a large number of potential cost problems in the daily operation of enterprises.Including the analysis of executive cost drivers at the micro level and the analysis of structural cost drivers at the overall level of the enterprise[1]。
Range
Strategic cost management includesFixed cost strategic managementandStrategic management of variable cost。The former is generally understood as fixed and has no room for management, let alone from a strategic perspective, so it is not valued by managers.But in fact, fromInvestment in fixed assets, make full use ofsupplierTo light asset structure;fromOverheadUnreasonableAmortizationTo the use of activity-based costing;From expanding production to increasingEquipment utilizationOverproduction to increaseFixed expensesAmortization and reduction ofUnit costAnd so on, which can be managed and establishedEnterprise cost advantageandCore competitivenessEffective methods.Therefore, fixed cost strategic management has new value.
scientific management
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Different industries have different asset investment ratios and different returns.For example, the investment in fixed assets in the aviation, post and telecommunications industries is far higher than that in the correspondingcurrent assetsinvestment;The mining and chemical industries have high requirements for investment in fixed assets and current assets;The industries with large investment in current assets are mostly concentrated in the field of consumer goods;However, the retail industry generally does not have high requirements for investment in fixed assets and current assets.At the same time, share capitalprofitThe rate tells us that there is no significant correlation between investment and return among different industries;In the same industry, the investment in fixed assets is generally related to the rate of return.Facts can prove that we can also foresee that the greater the investment in fixed assets, the moreAmortizationThe more fixed costs, the higher the total cost per unit product, the less profit, and the lower the return on investment.Among them, the measurement standard isFixed assets turnover。For enterprises, making up for large investment in fixed assets brings low investmentprofitThe method of production is to produce products with high added value (high price) and obtain higher labor productivity.However, due to the fierce competition in industries with large investment in fixed assets (such as star rated hotels and airlines), it is not feasible to raise prices. Therefore, to improve returns, gain growth, and improve labor productivity, tapping the potential of people is the main business approach, while scientific design and reasonable reduction of investment in fixed assets are the key strategic approach.
Adopt asset light structure
We should not blindly seek for the big and advanced in fixed asset investment, and invest in fixed assets on the premise of ensuring science and rationalitycost controlIn the minimum range, reduce the share of fixed costs in total costs and increase the contribution to profits.Realize cost driven investment scale and gain cost advantage.For example:
(1) For new investment, every small link should be considered.ToyotaautomobileEvery time the company invests in a new automobile factory of the same scale in the world, the investment amount is at least 10% less than that of the previous automobile factoryGross profit marginIt is the highest in the global automotive industry, reaching 8.5%;GM only has 1.5%.When designing the new factory, Toyota fully considered every link that needs to spend money, including plant, equipment, production process, layout, etc.In particular, logistics, from raw materials to finished products, adopts scientific design in every link to save time and efficiency.According to statistics, a screw in a Toyota automobile factory was moved for 25 kilometers in the factory from purchase to assembly.
(2) In terms of equipment investment, there is no need to pursue the so-called reputation. As long as it is suitable, it is not necessary to import the domestic ones if they can be used.For example, the equipment of a private paint companyDomestic procurementA set of equipment cost 2 million yuan, while a listed company spent 11 million yuan to purchase a set of equipment of the same scale from abroad.Isn't it a joke about shareholders' money?
(3) The functions of the equipment shall be subject to the applicability, and the redundant functions and luxury shall not be pursued.For example: cement production equipmentelectric control system It should be able to adapt to high temperature and dust environment, with low failure rate and easy operation as its main functions.It is also a production line with a daily output of 1000 tons of cement,GansuAn enterprise invested 70 million yuan to purchase equipment, andShaanxiAn enterprise has invested 130 million yuan, and the electrical control system is partly used forAmerican Space ShuttleTechnology on.Just imagine, in a cement production enterprise, is it necessary to use cutting-edge technology like aerospace control?
(4) The imported equipment is mainly mature and easy to master operation, combined with the actual control level of the enterprise's own engineers, technicians and workers, and it is not suitable to choose the most advanced and unpopular new equipment.There are numerous cases of failure in this regard.A beverage enterprise purchased the most advanced equipment from abroad. Due to the difficulty of operation technology, the enterprise spent nearly two years debugging, and finally failed to reach its design capacity.
(5) Should the factory choose steel concrete brick structure or steel structure?Even light steel structure in steel structure?Enterprises can adopt the most appropriate steel proportion structure through reasonable design and feasibility demonstration to reducesteel productsTo reduce the investment amount.
(6) Make reasonable use of fixed asset leasing business.No matter for short-term use or long-term use, plant and equipment can be leased, especially the equipment with low efficiency.For example, equipment for large-scale project construction is generally rented.Hong Kong and Taiwan businessmenTaiwan High Speed RailwayAfter the completion of the construction of the airport in Hong Kong, a large number of used construction machinery and equipment will be leased to the mainland andThailanduse.This is a very normal phenomenon in the more developed regions.
(7) Timely deal with enterprisesIdle assetsIt is also necessary.Although this will cause current one-time losses, it can bringcashTo increase operating cash flow and reduce future depreciation.
(8) In addition, investment in the establishment of large factories can gradually put the funds into place as needed, and there is no need to complete the investment at one time.Because investment projects are easy to formSunk costOnce the project is established and the investment is completed, there will be no repetition.For the investment of funds by stages and batches, there is also the possibility of regular review to ensure that no possible losses will occur or the losses already incurred will be minimized.such asU.S.AChryslerAuto partsThe self-made rate is only 35%, and the rest are supplied by Volkswagen (OEM).
Mengniu Dairy in China is a typical example of adopting asset light structure.Mengniu CompanyStart from zeroAfter four years, the sales revenue reached more than 2 billion yuan.Their approach is to invest limited funds in core technology relatedKey equipmentUpper;The more than 500 vehicles needed for its supporting facilities are all invested by the supporting suppliers themselves, and all the assets needed by farmers to raise cattle are also invested by farmers themselves;The enterprise has no big burden, so it can develop faster than its competitors in the same industry.
fromfixed assetsFrom the perspective of investment, the corresponding strategic management indicators that enterprises need to consider include:businessRelationship with scale, integration of internal and external resources, cost reduction indicators brought by learning, geographical location selection indicatorsSupplier managementIndicators, etc.
Improve utilization rate of fixed assets
As we all know, in thecost structure The larger the proportion of fixed costs,fixed assetsEfficiency versus unitManufacturing costThe greater the impact.For example, the ratio of fixed costs to variable costs in the automobile and parts industry is about 10:90;The ratio of fixed costs to variable costs in steel, cement, garden machinery, tomato food, sugar and other industries is about 20:80;The ratio of fixed cost to variable cost of fruit juice drinks is about 52:48;The ratio of fixed costs to variable costs in the water industry is about 98:2.fixed assetsUsageThe higher the turnover, the faster the profitability of the enterprise.
There is such an example that a small steel enterprise has strong profitability despite its backward equipment.Through research, it is found that the actual output of this enterprise exceeds the design capacity by 2.2 times, which means that the output of one set of equipment of this enterprise is more than that of two sets of equipment of other steel enterprises, which is equivalent to saving the investment of one set of equipment.Iron and steel enterprisesAverage fixed costThe ratio to variable cost is about 20:80, while this enterprise has reached 11:89. The unit manufacturing cost is 90 yuan/ton lower than the industry average, and this contribution is mainly from the enterprise's contribution tofixed assetsManagement of.
Another example: the production of tomato sauce, sugar and other products is seasonal. There are only 2-3 months of production in a year, and the equipment is idle at other times.However, through research and development, breeding early or late maturing tomato varieties, starting 10 days earlier or ending 10 days later, can increase the output of ketchup by about 14000 tonsDepreciation of fixed assetsThe reduced cost is about 10 yuan, so the production of 300000 tons can reduce the cost by about 3 million yuan.In addition to the idle equipment can be reused through various ways, the flexibility of production equipment can also improve the utilization rate of equipment.Shanghai General Motors CorporationThe car assembly line is flexible. Buick Regal series, Sail series, GL8 commercial vehicle series and new car Excelle series can all be assembled on the same assembly line.
For another example, through the simulation of a small auto parts enterprise, the total assets (includingfixed assetsandcurrent assets）If the turnover rate is accelerated, the profit growth rate will be faster.
From improvingfixed assetsFrom the perspective of use efficiency, the corresponding strategic management indicators that enterprises need to consider include:throughputApplication mode indicators, internal enterprisesOrganizational efficiencyIndicators, product development indicators, etc.
Manage and analyze fixed costs from the perspective of production links
In fact, it is difficult to analyze and calculate fixed costs from the perspective of strategic management.Traditional fixed costs are mostly adoptedCost volume profit, break even and other analytical methods, and the data is not accurate, which is also the reason why management accounting methods are less applied in practice.
Fixed cost（cost）Not only depreciation, but also fixed costs in ChinaIndirect costsTraditionalcost accountingIt is usually calculated according to the output.Even if some equipment is not used, its depreciation will beAmortizationWIPIn the cost, it just covers up the productactual costTherefore, it is easy to be ignored, which makes managers neglect management.If the activity-based costing method is adopted, the actual cost will beCost allocationIn terms of actual behavior or homework, this shortcoming can be remedied.
For example, a certain agricultural machinery productionEnterprise benefitsIt has declined year by year and suffered serious losses.according totraditional accounting Analysis shows that the reasons for most enterprises' losses are the same: the market is depressed, competition is too fierce, raw material prices rise, the 911 incident, SARSIraq WarEtc.However, the fact will be found after the attribute of manufacturing cost is re verified with the activity-based costing method.
The fundamental problem of this enterprise isproduct mixunreasonable,Equipment utilizationToo low, production replacement is too frequent, production preparation time is long, single product output is small, product output value is low, labor productivity is too low to make up for relatively high fixed costs, and the essence of its products is that developed countries first transfer production to developing countries.
From the perspective of fixed costs of production links, the corresponding strategic management indicators that enterprises need to consider include output rate indicatorsplanExternal shutdown indicators, machine hour occupancy indicators, production preparation time and manpower, product qualification rate indicators, procurement quality qualification rate and supply timeliness rate indicators.
Fixed cost means that the total amount of this part of cost is fixed in a certain period, but the cost allocated to the unit output changes with the change of output.
