Model essay on strategic cost management

Strengthening strategic cost management is convenient for enterprises to make unified planning at the strategic level in order to develop faster at the right time. Below I will share with you some model articles on strategic cost management. Come and enjoy with me.

Model essay on strategic cost management

Research on Strategic Cost Management

Abstract: Cost management has always been related to the survival of enterprises, and it is also one of the most important factors for every enterprise. It is of the times and urgency to study and discuss the theory of strategic cost management and promote the sustainable development of enterprises. This paper will elaborate the development of strategic cost management theory at home and abroad, and put forward countermeasures and suggestions for the strategic cost management of China manufacturing industry, and put forward a series of measures to reduce costs in view of the value chain.

Keywords: strategic cost management; total cost management

I. Introduction

With the intensification of global economic integration, while facing multiple competitions, enterprises need to explore and create new competitive advantages in combination with changes in internal and external environment, maximize value and consolidate their position in the industry. Strengthening strategic cost management is convenient for enterprises to make unified planning at the strategic level, so as to develop faster under suitable opportunities. In view of the fact that the theoretical research and practical experience of cost management in China started late compared with western countries, this paper will actively explore the development of strategic cost management theory based on the mature western strategic cost management theory, study and analyze the problems existing in strategic cost management in China's manufacturing industry, and put forward suggestions and countermeasures.

Second, the development of strategic cost management theory

Strategic cost management means that accounting managers use special methods to collect and analyze the information of the enterprise itself and its competitors, and help the enterprise management to implement cost management at the level of the overall strategy of the enterprise, thus creating a series of competitive advantages and making the enterprise invincible in the ever-changing environment. From a strategic point of view, the concept of cost management runs through the whole process of production and reproduction. Through comprehensive understanding, control and improvement of the company's cost structure and cost behavior, it seeks long-term competitive advantage and realizes effective cost management.

2. 1 foreign development

Accounting serves the economic development, and its development always depends on the economy, so the highest level or frontier thought of accounting in every era always appears in the country with the strongest economic strength. From Britain and America to Japan, there is no exception.

The idea of cost management was first put forward by British scholar Kenneth Simmons in 1980s. He believes that strategic cost management is "to provide managers with information needed for strategic decision-making by analyzing the relevant cost data of enterprises themselves and competitors." Later, Professor Michael Porter of Harvard Business School in the United States proposed to use the value chain for cost analysis in his two books "Competitive Advantage" and "Competitive Strategy", and this method was widely used later. Many younger scholars in the United States have also made a lot of contributions by stepping on the shoulders of the giant Potter. With the development of Japanese economy, since 1990s, Japanese accounting circles have begun to strengthen the research on strategic cost management, and put forward a representative strategic cost management model-cost plan, which integrates the concept of cost management into the method system of cost management.

2.2 Domestic development situation

After the reform and opening up, China's economy has developed greatly, but it was not until the late 1990s that domestic scholars began to study strategic cost management, which started later than foreign countries. With the increasing importance of strategic cost management in China, the strategic cost management research group of the School of Accounting of Southwestern University of Finance and Economics conducted a systematic study on the implementation of strategic cost management in China. Because most domestic enterprises implement traditional cost management, which can't provide a suitable environment for domestic scholars and break through the bottleneck that research methods are limited to theoretical understanding and analysis and can't be combined with practice, domestic theoretical research is out of touch with practical application, and the existing traditional cost management information system can't provide accurate information guarantee for enterprises to implement strategic cost management.

3. Suggestions on strategic cost management of China's manufacturing industry

The strategic cost management of manufacturing industry is the focus of current research. The ever-changing global economic environment makes the whole manufacturing industry face great challenges. How to control manufacturing cost in fierce competition is the key for manufacturing enterprises to stand out.

From a strategic point of view, enterprises should first analyze the stage of their products and determine different strategies to develop their sustainable competitive advantages. After determining this strategy, enterprises should decide to adopt different strategies to gain competitive advantage, that is, product differentiation strategy and cost leadership strategy. Once the competitive strategy of an enterprise is determined, it is necessary for the enterprise to find out where its own costs come from and understand the relationship between product costs. Then, the enterprise should analyze the motivation, find out the causes of the cost strategically, and then find the strategies to reduce the cost. At the same time, it should be understood that cost management is no longer just the responsibility of management. From the perspective of enterprise strategy, we should instill the concept of cost management into every employee's mind and form the concept of total cost management. Only in this way can the cost be effectively controlled in the four links of product design, procurement, production and sales.

3. 1 Control the cost of the design link

The formation of the final product is attributed to the independent research and design of the enterprise design team, which is often the key point of cost control. Because designers often can't control the market demand well, the utility of products can't be recognized by the market, so they can't create customer value well and maximize the company's interests. This reflects a cost-related problem, that is, products that are out of touch with the market can not only achieve good economic benefits, but also increase the cost of enterprises, which is not worth the candle. The key to solve this problem lies in: designers should conduct sufficient market research before designing, find out the real market demand, and then design and develop according to the enterprise's own situation.

3.2 Control the cost of procurement links

Controlling the cost of the procurement process does not mean asking the purchaser to blindly coordinate with the supplier to reduce the purchase price, which will often lead to kickbacks between the supplier and the purchaser or lead to the decline of the quality of the purchased materials, increase the product rejection rate and directly affect the production efficiency of the enterprise. The key to solve this problem lies in: on the basis of attaching importance to the quality of procurement personnel, enterprises form strategic alliances with suppliers to carry out long-term effective cooperation, so that enterprises can obtain long-term preferential feed prices, and suppliers have long-term stable customers to achieve a win-win situation.

3.3 Control the cost of production links

Although manufacturing enterprises have the richest theoretical and practical experience in cost control of production links, with the development of social economy, the methods used in the past may no longer be applicable. Manufacturing enterprises roughly divide production costs into material costs and labor costs, focusing on the control of raw materials, but this is not conducive to the full use of raw materials. The key to solve this problem is that enterprises should focus on improving production efficiency, make full use of raw materials in the production process, avoid unnecessary waste and achieve the purpose of controlling costs.

3.4 Control the cost of sales and service links

The last important link of cost control is sales and service. In order to sell products better, enterprises often supplement products with high-quality sales services, but it turns out that sometimes high-quality sales services only bring high costs and do not play a big role in product sales itself. The key to solve this problem is that enterprises should understand that the key factor that determines the product market depends largely on the product quality itself, and paying too much attention to other inputs is often a waste of resources.

Four. conclusion

Enterprises should pay attention to cultivating employees' awareness of total cost control from a strategic perspective, so that cost control can penetrate into all aspects of enterprise production and operation activities through employees' awareness within the framework of enterprise strategy, and make cost control an effective reality.

refer to

Shi Dongju, An Xianglin, Zhao. Problems and Countermeasures in Enterprise Strategic Cost Management [J]. China Science and Technology Information, 2007, (02).

[2] Wang Ning. On the strategic cost management of modern enterprises [J]. Friends of Accounting (Interim Journal), 2007, (05).

[3] Li Chunxian, Gao Anji and Liu Junmin. Characteristics and Application of Strategic Cost Management [J]. Enterprise Reform and Management, 2007, (0 1).

[4] Yuan Hua. Basic analysis framework of strategic cost management [J]. Modernization of shopping centers, 2007, (14).

Model essay on strategic cost management II

Analysis on the Application of Strategic Cost Management in China

Abstract: The idea of strategic cost management, which studies the formation and control of cost from a strategic perspective, was gradually formed in the 1980s under the advocacy of management accounting scholars in Britain, the United States and other countries. Since 1990s, the discussion about this idea and related methods has been deepened day by day, and it has been proved by the business management practices in Japan and Europe and America to be an effective way to gain long-term competitive advantage.

[Keywords:] strategy; Cost; cost control

1 the necessity of developing strategic cost management

1. 1 helps to establish and maintain the long-term competitive advantage of enterprises.

In today's increasingly fierce competition among enterprises, just reducing costs is not the ultimate goal of enterprises, and it is more important to find ways to improve the strategic position of enterprises. In other words, enterprises should change the traditional "cost maintenance" and "cost improvement" into "cost prevention", control the cost from the source through enterprise planning, and understand the business decision of enterprises from a strategic perspective. Strategic cost management is produced and developed to meet this demand. The idea of strategic management requires enterprises to take the operating conditions of all products as the decision-making basis for investment and new product development. What matters to an enterprise is not whether a product is profitable, but the final result of all the products it operates.

1.2 helps to update the traditional concept of cost management.

The traditional concept of cost management is to measure the quality of cost management by looking at whether the cost index is reduced and the degree of reduction, while strategic cost management requires managers to update their concepts and look at cost management from another angle. On the one hand, by improving the utilization efficiency of resources, the limited economic resources can be fully developed and utilized, and as much use value as possible can be obtained without increasing the cost; On the other hand, strategic cost management requires cost management to serve the whole enterprise operation, so it is necessary and beneficial for a decision to serve the overall strategic layout of the enterprise even if the cost does not fall but rises to some extent.

1.3 helps enterprises to adapt to the changes of external environment.

Strategic cost management pays more attention to the study of the external environment of enterprises, collects the information of competitors, grasps their relative costs, and knows ourselves and ourselves. At the same time, when studying the different characteristics of production and operation between central enterprises and upstream and downstream enterprises, we can use the value chain analysis method and adopt different methods to cooperate to achieve "win-win". Therefore, enterprises can actively adapt to the changes in the environment, make overall plans, make the current interests subordinate to the overall interests, minimize the impact of adverse environment on enterprises, and strive to achieve the strategic objectives of enterprise management and development.

1.4 is helpful to establish and improve the modern cost management system.

Compared with traditional cost management, modern cost management has a new expansion in connotation and extension: the field of cost management extends from the production stage of products to the whole life cycle of products; The content of cost management has changed from simple economy to the combination of economy and technology; The cost management mode has also changed from manual operation to computerized operation. This requires the way of cost management to change from tactical management to strategic management accordingly, so as to make the modern cost management system more perfect.

2. Problems in the application of strategic cost management

The application of strategic cost management makes some enterprises in China not only reduce their costs, but also gain competitive advantages over their competitors, which shows that strategic cost management is applicable to enterprises in China. However, at present, because most enterprises in China still maintain the traditional concept of cost, even if strategic cost management is adopted, the adopted strategic cost management system is not entirely theoretical strategic cost management, but only the application of a concept of strategic cost management, and there are still many problems, as follows:

2. 1 Implementation subject is incomplete.

The main body of strategic cost management is still the financial personnel of enterprises, and the senior managers of enterprises do not or rarely participate in the strategic cost management activities of enterprises. Financial personnel provide cost information needed for decision-making to senior managers of enterprises, but they do not participate or rarely participate in decision-making; Top managers only make decisions based on the cost information provided by financial personnel, and they do not participate in the cost management process. This will isolate the control of enterprise cost management, and it is impossible to manage and control enterprise costs from a global perspective.

2.2 Lack of cost-effectiveness concept

Most enterprises still hold the simple concept of cost saving in cost management, and the adopted cost assessment index is still the absolute reduction of traditional product cost. One-sided pursuit of product cost reduction may lead to the decline of enterprise efficiency. For example, in order to reduce product costs, enterprises purchase low-quality raw materials, resulting in high product rejection rate, and the decline in product quality may lead to a decline in its sales price or sales volume. Therefore, from the perspective of cost-effectiveness, there are conditions and limits for reducing costs, and the reduction of a certain cost does not necessarily mean that the profits of enterprises will definitely increase; However, increasing certain expenses may improve the overall economic benefits of enterprises or enhance their competitive advantages.

2.3 narrow scope of cost management

Influenced by the concept of planned economy, although the cost management scope of most enterprises in China begins with material procurement and ends with product sales, it rarely analyzes the environment and market environment of enterprises, fails to analyze the internal value chain of enterprises from product development and design to product sales and after-sales service according to the requirements of strategic cost management, and fails to analyze the industrial value chain of upstream suppliers, downstream buyers and competitors. Due to the lack of analysis of the internal and external environment in which the enterprise is located, it is difficult for the enterprise to clarify its competitive position, so it is impossible to accurately seek its competitive advantage.

2.4 Information is not effective enough

Compared with traditional cost management, the amount of information needed and handled by strategic cost management has increased dramatically. Some technical methods adopted by it also make the traditional manual operation difficult to adapt. If the activity-based cost needs to allocate indirect expenses according to a large number of cost drivers, it is impossible for manual operation to complete such a heavy allocation. Therefore, strategic cost management needs special information processing methods to support it. Scientific and advanced information processing methods are directly related to the information quality required by strategic cost management, which determines the breadth and depth of its practical application.

3 the use of strategic cost management should pay attention to matters

Strategic cost management is an organic combination of strategic management and cost management under specific conditions, which is strategic, comprehensive and dynamic. Therefore, enterprises must pay attention to the following matters when applying strategic cost management:

3. 1 change ideas and establish strategic cost management ideas

Strategic cost management is not only a change in management methods, but also a change in thinking. The present situation of enterprises in China and the practice of foreign enterprises show that the traditional cost management concepts and methods can not achieve the effect of strategic cost management. If the enterprise increases at a lower cost and obtains a higher use value, so as to greatly improve the economic benefits of the enterprise, why not? The competitive advantage of enterprises in the market depends on "providing customers with better use value at the same cost" or "providing the same use value at lower cost". What kind of cost strategy an enterprise adopts depends on its overall business strategy and competitive strategy, and cost management must serve its overall management.

3.2 Mobilize full participation and establish the concept of cost-effectiveness.

Enterprise strategic cost management is not only the work of cost managers, it involves all functional departments of enterprises. To effectively implement strategic cost management, it is necessary to mobilize the enthusiasm of all employees to participate in cost management. Through necessary publicity and explanation, different organizations and members can understand the binding force of the strategic cost management system, so as to effectively maintain the implementation of the cost management system and ensure that all staff participate in the strategic cost management. At the same time, employees should change the simple concept of cost saving under traditional cost management and establish the cost-benefit concept of strategic cost management. Remodel the performance evaluation index of the enterprise, so that it is more located in the external factors of the enterprise, such as competitive benchmark. As a decision support system of enterprise strategic management, strategic cost management should be based on the realization of enterprise strategic objectives. The goal of strategic cost management is to use the basic function of cost management to gain and enhance the competitive advantage of enterprises.

3.3 Expand the scope of cost management

One of the main ways to expand the scope of cost management is to attach importance to the development and utilization of value chain. Value chain analysis mainly analyzes the integration of related activities from raw material suppliers to final product consumers. The specific contents include: first, the analysis of industry value chain, so that enterprises can clearly define their position in the whole industry value chain and analyze the possibility of using upstream and downstream value chains. The second is the analysis of enterprise internal value chain. Through analysis, we try to eliminate non-value-added activities and improve value-added activities. The third is the value chain analysis of competitors. By analyzing the value chain of competitors, we can learn from each other. Strategic cost management requires combining the value chains of industries, enterprises and competitors organically, and analyzing the upstream and downstream value activities from a strategic perspective to reduce costs. First find out the basic value chain, then decompose it into individual value activities, and then compare the cost and benefit of unit value chain, so as to weigh and choose between value activities and adjust the relationship between value chains. From the perspective of strategic cost management, each link in the value chain will not only generate value, but also consume resources, that is, the occurrence of enterprise costs has a * * relationship with its value activities, and all costs can be allocated to each value activity. Through value chain analysis, enterprises can reorganize value chain activities and further derive their development strategies, which will have a significant impact on the cost management model of enterprises.

3.4 Improve the accounting information system

Perfecting the accounting information system is beneficial for enterprises to obtain the information support needed for strategic cost management. The information needed for strategic cost management is different from the current financial accounting information and the existing management accounting information. The current cost information provided by cost items and cost elements must be rearranged to match various value activities and comprehensively and accurately reflect the resources consumed, not consumed or expected to be consumed by various products. In addition, enterprises must also expand information sources and provide cost information and other information needed for strategic cost management, such as product development and product cost pricing of various enterprises.

Because strategic cost management involves a wide range and needs a large amount of information, it needs to be analyzed and processed anytime and anywhere, which requires enterprises to rely on advanced information science and technology to establish an accounting information system beyond the scope of enterprises.

3.5 Establish an effective cost incentive evaluation mechanism

Effective incentive mechanism can promote the better completion of the goal. Therefore, a complete strategic cost management system can only be successfully implemented if the incentive evaluation mechanism plays a leading role. Effective incentive mechanism should pay attention to the following aspects:

(1) embodies the concept of "pursuing maximum value". An effective evaluation mechanism should highlight the optimization of the comprehensive value of each department and provide a broad space for each department to create value. When setting evaluation indicators, we should determine key evaluation indicators according to the characteristics of each cost center, establish a special management performance evaluation index system, highlight key points and give consideration to comprehensiveness.

(2) Become the link between "annual budget" and "strategic planning". Annual budget is a systematic tool for the implementation of strategic planning, and the establishment of cost incentive evaluation mechanism should better solve the connection problem between "current budget evaluation" and "strategic planning evaluation".

(3) Scientific formulation of performance evaluation cycle. In the evaluation, we should not only consider the performance of the department this year, but also trace the performance of previous years, not only horizontally, but also vertically, so as to make up for the lack of performance measurement and make the evaluation and incentive system more standardized and scientific.

References:

Yi Zheng, Zhao Donghui, Yin Ying. Research on the Application of Enterprise Strategic Cost Management [J]. Journal of Shanxi Economic Management Cadre College, 2007(3)

[2]____ _, Chi Zheng. On the method and application of strategic cost management [J]. Journal of Dongbei University of Finance and Economics, 200 1( 1).

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