What are the methods of cost management?

1, value chain analysis \x0d\\x0d\ Value chain is a method used to describe the relationship between a company's operations and the value of its products in the process of researching, developing, designing, producing, and selling products. For example:Inventory only plays a preventive role in the production activities of an enterprise to be prepared, its existence does not increase the value of the enterprise's products, so the cost of this operation should be minimized. \x0d\\\x0d\ Semi-finished products in the production department of the enterprise transmission operations can not increase the value of the enterprise products, should be used in the network planning of the scientific method of rational layout of the enterprise's production plant, to reduce the semi-finished products transmission operations to minimize the cost of transmission. In the process of product value formation, enterprises must strictly distinguish between value-added operations and value-added operations, and should minimize value-added operations to reduce production costs. \x0d\\\x0d\ 2, zero inventory and just-in-time production \x0d\\x0d\ As inventory management is a value-added operations, so many enterprises are currently pursuing zero inventory, however, zero inventory to the enterprise product production brings great risk, once the supplier default delayed delivery or the materials supplied with quality problems, when the loss to the enterprise is not negligible. Therefore, the premise of zero inventory is that there must be a good relationship between suppliers and customers. \x0d\\\\x0d\\\ Related to this is the Just-In-Time (JIT) method of production. Under the guidance of this production concept, a company only produces on time when it receives an order, and the various production components of the production line are produced when they are needed for the next production step. This production method requires companies to not only obtain orders and develop and design products in a timely and orderly manner, but also requires high quality and high standards for various components and a high level of proficiency for production workers. \x0d\\\x0d\\ because if one production step goes wrong, the whole production process has to come to a halt. Therefore, under this type of production method, the company must also have the ability to respond quickly and flexibly, and to deal with any malfunction or scrap in a timely manner. \x0d\\\\x0d\ 3, job costing method \x0d\\\x0d\ Job costing method is a costing method that uses jobs as the basis of management, calculates the production cost of a product by analyzing the cost drivers of the job and provides more relevant and relatively accurate cost information for the management of the enterprise's operations. \x0d\\\x0d\\ Job is a collection of raw materials, technologies, methods, and environments, etc., consumed by an enterprise to provide a certain amount of products or services, which are standardized methods and techniques that are performed repeatedly independent of the uniqueness of the finished product. Each operation completed by the enterprise consumes a certain amount of resources, and the output of the operation forms a certain amount of value that is transferred to the next operation, and accordingly gradually transferred until the product is finally provided to customers outside the enterprise. \x0d\\\x0d\\ Therefore, the production process of the enterprise is the process of operations consuming resources and products consuming operations, and at the same time, it is the process of value formation. However, not all operations are value-adding operations. The objective of job costing management is to maximize the elimination of non-value-adding operations, maximize the operational efficiency of value-adding operations, and reduce resource consumption to the point of ultimately reducing costs. \x0d\\\x0d\ 4, total quality management \x0d\\x0d\ Total quality management is considered to be one of the most important cost management research topics at the end of the last century, and it centers on the idea that the product should fully satisfy the customer's needs. At present, a major management concept in the western manufacturing industry is "quality is free (Quality is free)", that is to say, high-quality products gained far more than the product quality problems gained revenue problems, because the product quality problems such as repair, sales return, etc., to pay additional costs, a substantial reduction of The problem is that quality problems in products, such as return for repair and sales return, incur additional costs and significantly reduce returns. \x0d\\\x0d\ It means that "it is the duty of the enterprise to provide customers with zero-defect quality products". The traditional cost-benefit analysis must be applied in the context of the long-term interests of the enterprise in dealing with quality issues. The pursuit of zero-defect quality products is a goal that the enterprise must achieve at all costs, because poor quality products or substandard products in the current buyer's market conditions means that the enterprise is going to lose its customers, lose its share of the market, and the end result is imaginable. \x0d\\\x0d\ Total Quality Management starts with designing products in response to customer needs and ends with ensuring that such products satisfy customers. \x0d\\\x0d\ Quality is the degree to which consumers are satisfied with a product or service. The pursuit of quality, of course, comes at a cost. The costs of quality generally include the costs of prevention, the costs of inspection, the costs of internal defects and the costs of external defects. They are the costs incurred by a company to ensure that a product meets a specified level of quality. Many large and successful companies in the world such as Ford Motor Company in the United States, British Communications in the United Kingdom, Fuji and Toyota in Japan, etc. have taken total quality management as the most important factor in their great success in the 1990s. Second, the modern cost management concept \x0d\\\x0d\ 1, cost management idea innovation \x0d\\\x0d\ The traditional counting and reporting type cost management model only calculates the financial cost, not calculate the management cost; only pay attention to the aftermath of counting, do not pay attention to the ex ante prediction and decision-making; only manual operation, do not take into account the advanced management tools; only rely on the enterprise financial department, do not pay attention to play the majority of employees' enthusiasm, and therefore difficult to adapt to the socialist market, the majority of the staff. Activity, so it is difficult to adapt to the requirements of the development of the socialist market economy. This requires a revolution in the concept of cost management, to establish a new concept of competition, efficiency, management, legal system and pioneering concepts. \x0d\\\x0d\ 2, cost management organization rationalization \x0d\\\x0d\ This is a guarantee of management modernization. There is no organizational guarantee, it is difficult for enterprises to organize the existing human, material and financial resources, it is impossible to play the maximum overall efficiency. Cost management organization is the requirement to implement the principle of unified leadership, hierarchical management, to establish a cost management responsibility system to ensure the smooth realization of the target cost. At the same time, it is also necessary to establish a scientific cost index system, cost accounting system, cost decision-making system, cost control system and cost assessment system in accordance with the functions of cost management. \x0d\\\x0d\ 3, cost management methods scientific \x0d\\x0d\ to summarize China's good experience in cost management, the introduction of foreign modern cost management methods, mutual integration, development and improvement. The main target cost management, responsible cost management, plant economic accounting, cost-volume profit analysis, value engineering, cost-benefit analysis, cost forecasting, cost decision-making, cost control, team cost management, job cost management and other methods. \x0d\\\x0d\ 4, cost management tools electronic \x0d\\x0d\ In cost management, the application of electronic computers, not only can replace some of the heavy transactional labor, but also accelerate the information processing, to facilitate the establishment of the cost management information system, so that managers can make timely and correct decisions. At the same time, it should also promote the application of advanced detection means and display monitoring devices to strengthen the control of material consumption and flow, to create conditions for cost control and calculation. \x0d\\\x0d\ 5, cost management personnel specialization \x0d\\x0d\ to train a professional cadre that can adapt to the needs of cost management modernization. Only in this way can we push cost management work forward and ensure the early realization of cost modernization. \x0d\\\x0d\ Three, ERP standard cost management \x0d\\\x0d\ In the traditional manual management mode, the cost control of the enterprise is affected by a number of factors, and it is often not easy or possible to realize the optimal control of each link. Modern cost management requires a fully integrated system that can coordinate the planning, monitoring and management of the various costs incurred by the enterprise, thus assisting the enterprise's various business activities are market-oriented to operate. \x0d\\\x0d\\ Enterprise Resource Planning (ERP) system - ERP as the internal management platform of modern enterprises, in addition to providing a full set of logistics solutions, monitoring and optimizing the entire production process of the enterprise, ERP also provides a powerful control and a wealth of analytical functions in the field of enterprise funds management. The implementation of ERP standard cost system in enterprises can optimize the cost control process and reduce a large number of cumbersome daily accounting and reconciliation work. \x0d\\\x0d\ 1, conducive to enhance the staff's cost awareness \x0d\\x0d\ The establishment of the standard cost system requires the grass-roots managers *** with the participation of scientific methods to develop the standard cost, and as a goal of staff efforts and performance evaluation scale prompted the majority of employees to care about the cost of cost accounting, enhance the awareness of the cost of the completion of the predetermined cost control goals have a positive driving The role of cost control is positively promoted to accomplish the intended cost control objectives. \x0d\\\x0d\ 2, conducive to cost control \x0d\\x0d\ ERP standard cost system through the ex ante development of cost standards, the consumption of various resources and various expenses to set the quantitative boundaries, can be in advance to limit the occurrence of a variety of consumption and expenses; in the process of the formation of the cost, according to cost standards to control expenditures, at any time to show the savings or waste, and timely discovery of more than the standard cost of consumption. Consumption, conducive to enterprises to quickly develop improvement measures to correct the deviation, in order to achieve the purpose of reducing costs; product cost formation, through the actual cost compared with the standard cost, the enterprise can carry out regular analysis and assessment, and summarize experience in a timely manner, for the future to reduce the cost of pointing out the way. \x0d\\\x0d\ 3, conducive to simplifying accounting work \x0d\\x0d\ In the ERP standard cost system, the products in process, finished goods and cost of goods sold are valued at standard cost, and at the same time record the cost differences, which can greatly reduce the workload of the end-of-period costing and simplify the day-to-day handling of accounts. At the same time, the use of ERP cost management, in the inventory system, payroll system, fixed asset system, etc. to take out the relevant cost data or manually enter the data, the system can automatically carry out cost calculations, to generate the completed product cost statements, cost of products in the product cost statement, cost variance analysis of the table and other reports, and to ensure that the uniqueness of a variety of sources of data, to ensure that the collocation between the data the correctness of the relationship between the data, so as to avoid manually The heavy workload of doing reports. \x0d\\\x0d\ 4, conducive to price decision-making \x0d\\x0d\ The standard cost of a product is an important basis for price decision-making and bidding and bargaining. This is because the standard cost provides timely and consistent cost information, it can eliminate the process of business management due to inefficiency or waste as well as contingent factors on the cost of avoiding price fluctuations due to fluctuations in the actual cost of the situation. As a basis for pricing, standard cost is more responsive to the market's demand for timeliness in pricing than actual costs derived after the end of the accounting period. \x0d\\\x0d\ Four, Summary \x0d\\\x0d\ In short, the driving force and ultimate purpose of business survival is to make a profit, i.e., to make a profit, and it must be ensured that the formula for survival of the business:Profit=Revenue-Costs is valued at >zero and within a certain reasonable range. In addition, the external and internal environment facing the enterprise are constantly changing, in order to be able to stand firm in the fierce competition in the market, it is necessary to strengthen cost management, cost management throughout the entire process of production and operation.