Cost management mode is an integration of cost management technology, which uses a series ofCost management methodReduce enterprise costs from a global and systematic perspective, and ensure thatEnterprise core competitivenessSo as to promote the sustainable development of the enterprise.
Chinese name
Cost management mode
Foreign name
Activity-Based Cost
Part of speech
noun
Definition
Integration of cost management technology
Advantages
Improved accuracy
Prospects
Opportunities and challenges coexist
Content
Value chain analysis, strategic positioning analysis, etc
The traditional cost management mode has great limitations, as shown below:
Low accuracy of cost information
In the modern manufacturing environment, the proportion of direct labor costs has declined, and indirect costs have increased significantly.Before the 1970s, indirect costs were only 50%~60% of direct labor costs, while today most companies' indirect costs are 400%~500% of direct labor costs;In the past, the direct labor cost accounted for 20%~30% of the product cost, but today it is less than 10%.Obviously, if we still use the man hour and output standards in the traditional cost calculation method to allocate the manufacturing expenses, it will inevitably lead to the distortion of cost information, making the cost of products with high output and low complexity higher, while the cost of products with low output and high complexity is lower, which will lead to the failure of cost control and the failure of business decisions.
Insufficient cost information
"Traditional cost management focuses on the value consumption of the enterprise's internal production and operation activities, but seldom considers the analysis of the enterprise's external environment, which shows a strong incompatibility with strategic management." [2] With the progress of technology, the standardization of production will greatly reduce the proportion of product manufacturing costs in the enterprise's overall operating costs, product research and development costsThe proportion of after-sales service costs and costs caused by daily management activities in the overall operating costs of the enterprise will continue to rise.Strategic management emphasizes knowing oneself and the enemy, that is to say, we should pay attention to ourselves and understand others in an open and competitive market environment.We should not only know the situation of upstream suppliers, but also the situation of downstream customers and dealers, and coordinate the relationship with them. At the same time, we need to analyze and study the basic situation of competitors.
Lack of analysis of competitors' cost chain
No matter what kind of business strategy an enterprise adopts, its long-term and sustainable cost reduction is an important source of its sustainable competitiveness.Therefore, cost analysis of competitors should be an important part of analyzing competitors.The traditional cost management only pays attention to the cost reduction in the production stage, and ignores the analysis of the value chain, especially the analysis of the competitor's value chain or cost chain.Competitors' value chain and costEnterprise value chainIt is in a parallel position in the industry value chain.Through the analysis of the value chain of competitors, the cost of competitors is calculated and compared. According to the different strategies of the enterprise, the strategy of developing strengths and avoiding weaknesses is determined to strive for cost advantage.When analyzing the value chain of competitors, financial management personnel should prepare a value chain cost analysis comparison table between the enterprise and its main competitors, find out the differences in operating activities with competitors, and select a competitive strategy suitable for the enterprise itself. Because the traditional cost management model is not adaptable in the new economic environment,There will be many drawbacks in the process of enterprise development.
New environmental challenges
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Great changes in production organization
With the continuous improvement of living standards, the behavior of consumers has become more selective, requiring producers to provide more diversified and distinctive products, thus transforming the traditional mass production mode aimed at pursuing economies of scale into the production organization mode of "flexible manufacturing system" and "mass customization" that can quickly respond to the diversified needs of customers.
The increasingly competitive environment
With the rapid development of transportation and information exchange, enterprises have entered a global market. Both large and small companies are affected by global competition and pay more attention to product quality and production efficiency.In order to control costs, improve productivity and measure the profitability of products, enterprises need timely, relevant and comprehensive cost information.
Application of high technology
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The main feature of high-tech development is the highly computerized and automated production formed on the basis of the electronic technology revolution, includingnumerical control machineThe wide application of robots, computer aided design and computer aided manufacturing, and the formation of computer integrated manufacturing system, which starts from product ordering, and ends at all stages of design, manufacturing and sales, all kinds of automation systems are integrated into a whole, and controlled by computers.With the help of high-tech power, modern enterprises have realized the high efficiency and flexibility of product production through flexible production methods, thus greatly promoting enterpriseslabour productivityAnd the improvement of economic benefits.
Promotion of just in time production system and total quality management
The just in time production system adopts a backward to forward pull production system, that is, starting from the final satisfaction of customer demand, the production is comprehensively arranged from the backward to the forward step by step. It requires the enterprise to achieve "zero inventory" in all aspects of supply, production and sales as far as possible.The focus of traditional quality management is to rely on professional personnel to monitor and remedy after the event. Total quality management is different. It takes the realization of "zero defect" as the starting point of quality management, and focuses on the continuous self-management and monitoring of operators in each processing procedure. Once problems are found in processing operations, immediate measures should be taken to correct them as soon as possible,In order to realize the instantaneous automatic control of defects in the first line of production and ensure the realization of "zero defect" in the entire production process of enterprises, such manufacturing technologies require enterprises to have a perfect cost budgeting system.
Modern mode
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The modern cost management mode should be strategic cost management.Its basic content is to focus on cost drivers, use value chain analysis tools, and clarify the functional positioning of cost management in enterprise strategy.It mainly includes value chain analysis, strategic positioning analysis and cost drivers, forming an interconnected and inseparable system[1]。
Value chain analysis
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The value chain is formed by a series of operations that can lead to a final product or service. It is a collection of internal processes or operations used by an enterprise to design, produce, sell, deliver and maintain its products.An independent enterprise is used as a reference to divide the value chain of an enterprise. The value chain can be divided intoEnterprise internal value chainAnd industry value chain.The internal value chain of an enterprise includes the value chain of the enterprise as a whole, the value chain between business units (such as branches and workshops), and the value chain within each business unit.The value chain activities of each unit affect each other, so the cost of one value chain activity will be affected by another value chain activity;Industry value chainEnterprise value chainIn activities, the relationship between a value chain activity and other value chain activities is called connection.This connection includes not only the internal relationship of the enterprise, but also the vertical connection with suppliers (upstream) and customers (downstream).In order to seek competitive advantage, enterprises must carry out value chain analysis from a broader perspective - industry perspective.Industrial value chainIt refers to the whole process from the initial raw materials to the final products reaching consumers.The production process of an enterprise can occupy the entire industrial value chain. At the same time, enterprises can also integrate forward or backward along the value chain according to their different strategic needs.The information obtained from value chain analysis plays a very important role in formulating strategies to eliminate cost disadvantages and create cost advantages.The enterprise development strategy derived from the value chain analysis will have a significant impact on the enterprise's cost management model.Through the analysis of the enterprise's internal value chain, we can find out the main activities that generate customer value, and quickly respond to customer needs;Improve the connection of the industry value chain, make the enterprise and its upstream and downstream jointly reduce costs, improve the overall advantages of these related enterprises, and find win-win opportunities;By analyzing the value chain of competitors, we can find out which part of the value chain the cost difference between enterprises and competitors occurs.
Strategic positioning analysis
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Value chain analysis provides an analytical framework for strategic cost management, but it does not solve the problem of how to combine cost management with enterprise strategy, which is the core of strategic positioning analysis.Enterprises can use strategic positioning analysis to make strategiesCost management methodThe coordination of management focus and analysis method with the strategic management of the enterprise is conducive to keeping its cost management changing with the change of the enterprise strategy.Through the investigation and analysis of the strategic environment, the enterprise can identify its own opportunities, threats, advantages and disadvantages in the competitive market to determine its competitive strategy.The content of strategic positioning analysis includes: the overall strategy refers toproduct life cycle Based on the principle of product life cycle and market position (taking market share as the evaluation index), the enterprise positions its products through product analysis;Competitive strategy is divided into cost leadership strategy, differentiation strategy and target agglomeration strategy.
cost driver analysis
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Cost driver analysis is to comprehensively understand the cost structure and cost behavior of enterprises from a strategic perspective, find out the factors that cause cost changes, and seek strategic ways to reduce costs to gain long-term competitive advantage through continuous control and improvement. Cost driver analysis runs through strategic cost management.Through value chain analysis and strategic positioning analysis, enterprises can determine the competitive strategy they should adopt, thus determining the direction of cost management.However, it is necessary to clarify the focus of cost management and find out the driving factors of cost to ensure the effectiveness of cost management strategy.Cost driver analysis can meet the requirements of strategic management, find out the factors that affect costs from a strategic perspective, and then seek strategic ways to reduce costs to match the competitive strategy of enterprises.
In a word, due to the changes in the macro and micro environment faced by enterprises, the uncertainties faced by enterprise cost management are increasing day by day, and the drawbacks of the traditional cost management model in this environment are increasingly apparent.The strategic cost management model is the product of the organic combination of cost management and strategic management. It is an adaptive change made by traditional cost management to the changing external competitive environment, and is an inevitable trend of the development of contemporary cost management.
