TCL project research and development cost control

1 cost in a broad sense contains the design (R & D) costs, manufacturing costs, sales costs of the three major parts, that is, many people in the cost control tend to focus only on manufacturing costs, sales costs and other aspects of control. If the cost control of the R & D process as the starting point for the cost control of the entire project, which is the key to product cost control. R & D cost control is effective We know that a product life cycle contains three stages of product growth, maturity, decline, these three stages of cost control management focus is different, namely, design costs, production costs, sales and service costs. In fact, product development and design is the source of our production, sales where the target cost of a product in fact after the success of the design has been basically shaped, as the later production of products and other manufacturing processes (the actual cost of manufacturing), the maximum degree of control can only be to reduce losses in the production process as well as to improve the efficiency of the assembly and processing (to reduce the cost of manufacturing). There is a generally accepted view that 80% of the product cost is binding cost, and has been determined in the design phase of the product. In other words, once a product has been developed, its target material costs, target labor costs have been basically determined, the manufacturing center is difficult to change the inherent shortcomings left by the design. There are many products that are destined to have higher manufacturing costs than the market price at the design stage. 2 How to ensure that our products are designed to achieve an acceptable level of profitability under the given conditions of market price, sales volume, and functionality, we have introduced target cost and R&D cost control in the product design and development phase. Target costing is also known as "price-guided costing", which is the opposite of the traditional "cost-guided pricing" (i.e., calculating prices from cost plus). The price of a product usually takes into account a number of factors, including the function and nature of the product and its competitiveness in the marketplace. Once the product's target is determined, including price, function, quality, etc., the designer will deduct the target profit from the target price to arrive at the target cost. The target cost is the center of attention in the design and production phase, and is also the motivation for the design work, but also for the design of products and processes to indicate the direction and provide a standard of measurement. In the product and process design phase, designers should use target costing to drive improvements in design solutions to reduce future manufacturing costs. 3 One of the keys to TCL's success is the control of project development costs. TCL Group Ltd. was founded in 1981 and ranked fifth among China's top 100 electronic information enterprises in 2000. 2001 TCL Group had a sales revenue of 21.1 billion yuan, a profit of 715 million yuan, 1.084 billion yuan in taxes, exports of 716 million dollars and a brand value of 14.5 billion yuan, making it one of the largest industrial manufacturing enterprises and one of the most valuable brands in Guangdong Province. TCL's development not only relies on keen observation, strong R&D, productivity and sales force, but also benefits from the effective control and management of project R&D costs, so that once the product enters the market, it quickly captures the market with a superior performance-price ratio, and realizes a steady increase in economic benefits.