What are the characteristics of modern enterprise cost management and the problems it faces

What are the characteristics of modern enterprise cost management and the problems it faces

As a result of the transformation of the production mode and the development of high technology, the traditional cost management methods have been difficult to provide managers with the cost information they need. These traditional cost management methods combined with new ideas, new theories, new methods derived from a series of modern cost management methods With the development of the economy, scientific and technological progress, the shortening of the product life cycle and the intensification of global competition, many companies to adapt to the new economic environment to take the initiative to change the traditional cost management concepts, and actively adopt modern cost management methods.

This article discusses the characteristics of modern enterprise cost management and the inevitability of the methodology, and proposes an effective way to implement modern enterprise cost management.

An enterprise to seek development and survival in the competition, we must pay attention to cost management, actively update the concept of cost management, explore new methods of cost control, new ways, only in this way can cost management in enterprise management to play the best role. The status quo of enterprise cost management and its system requirements and its own development interests are not adapted to the reality, while the enterprise cost management itself also exists powder many questions.　First, the concept and characteristics of modern enterprise cost management

1, the meaning of modern enterprise cost management

The meaning of cost management in a narrow sense does not only refer to the production and operation process of the actual cost of the explicit cost, but also includes the enterprise to lose the market, the commissioning agency costs and other non-obvious costs. For explicit costs, cost management focuses on seeking reasonable cost levels that maximize the value of the company. Broadly speaking, enterprise cost management refers to the use of specialized methods by managers to provide analytical information about the firm itself and its competitors, to help managers form and evaluate corporate strategies to create competitive advantage for the purpose of effectively adapting the firm to the continuously changing external environment. Cost advantage is the core of enterprise cost management, and traditional cost management is to realize "cost reduction".

2, the characteristics of modern enterprise cost management - long-term, global, extended

Long-term: the purpose of enterprise cost management is to achieve long-term sustainable competitive advantage in order to achieve long-term survival and development of enterprises, based on long-term strategic objectives. The traditional cost management is based on short-term cost management, but not from the long-term continuous cost reduction strategy to consider the tactical cost management. For example, the enterprise to carry out labor cost management, according to the "cost reduction", enterprises should hire relatively older, highly skilled employees in order to reduce labor costs. To the "cost advantage" standard measure of enterprise from the long-term employment of young, highly educated employees, the use of the learning curve, in order to obtain a longer-term cost advantage.

Global: Enterprise cost management to the enterprise's overall situation as the object, according to the overall development strategy of the enterprise and the formulation. It integrates the internal structure of the enterprise and the external environment. The value chain of the enterprise runs through the two-dimensional space of the enterprise's own internal value creation operation and the enterprise's external value transfer operation. The value chain is different from the value-added value, which is a wider value system chain outside the enterprise, and the enterprise is just a link in the chain of the whole value creation operation.

Extensibility: enterprise cost management of the powder eye point is the external environment, the cost management of the extension forward to the procurement process, and even research and development and design process, and must also consider the back also after the service sector. Both, depending on the link with the upstream suppliers, should also pay attention to the link with the downstream customers and distributors. In short, the enterprise cost management should be integrated into the entire market environment to be examined comprehensively. Only the correct analysis and judgment of the environment in which the enterprise is located, in order to predict and control the risk, according to the enterprise's own characteristics to determine and implement the correct and appropriate management strategy, seize the opportunity to actively adapt to and manage the external environment, to take the initiative in competition, and ultimately to achieve the intended strategic objectives of the enterprise. The object of traditional cost management is mainly the production process within the enterprise, and the supply and sales of the enterprise is not much consideration, for the value chain outside the enterprise is even more blind.

Second, the inevitability of the modern enterprise cost management methods

In the modern economy, the traditional primary and secondary industries are gradually declining in importance, and the tertiary industry - the service industry accounted for more and more. The rapid development of the tertiary industry has changed the industrial structure of the whole society, and this influence has expanded with the opening of the markets of tourism, banking, insurance, and telecommunications. Compared with the traditional manufacturing industry, the cost structure of the final products of the service industry is difficult to distinguish, and the traditional variable cost management method is not applicable, because not only are the products themselves difficult to recognize, but also the mixed costs in the products are much larger than the fixed and variable costs that can be easily distinguished. At the same time, many manufacturing industries are facing many new cost issues, such as total quality costs and customer satisfaction, as they transition from a traditional seller's market to a buyer's market. Therefore, cost accountants must spend more energy and time to seek more appropriate cost management methods to provide management with cost information that is compatible with the new economic environment.

In the new situation of high-tech boom, with the computer numerical control machine tools and artificial intelligence tools, computer-aided equipment and other high-tech achievements in the production activities of a wide range of applications, the enterprise's production methods and product cost management methods have shown many fundamental changes. As many enterprises have been transformed from the traditional labor-intensive production to capital-intensive and technology-intensive production, direct labor costs in the total cost of the ratio declined year by year. But its cost components are also more complex, which requires cost accountants must have a deeper understanding of the reasons for indirect manufacturing costs, that is, its cost drivers, to provide management with applicable cost information.

In the wave of global socio-economic changes, the content of management accounting has been greatly enriched and developed. Many advanced enterprises in the West have already utilized new concepts and methods such as job costing, balanced scorecard, economic value added and value chain accounting, and have achieved excellent results. The reintegration of modern management accounting methods has effectively promoted scientific and technological progress and economic development. We must face the forefront of the market economy, systematically summarize a variety of new methods that have been proven effective in practice, abstract for the integration framework, and promote the modern management accounting to keep pace with the times and continue to innovate.

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