In cost management, many enterprises blindly emphasize cost reduction, without considering the competitiveness of products, without cost-benefit analysis, and without combining cost management with enterprise strategy. The consequence of this is that the unilateral pursuit of cost reduction by enterprises often produces short-term effects, but it is very unfavorable to the long-term effects of enterprises. In fact, people who really know how to do business know that the key to the survival of enterprises is that their products can be accepted by the market. Therefore, enterprises must take into account the continuous innovation of products when controlling costs, especially to ensure and improve the quality of products, and must never unilaterally ignore the variety and quality of products in order to reduce costs. What's more, in order to unilaterally pursue immediate interests, we can't take crooked ways such as cutting corners, counterfeiting or shoddy construction to reduce costs. Otherwise, the result will not only harm consumers, but also make enterprises lose credibility and even go bankrupt.
In fact, when it comes to cost management, we have to consider finding the best combination of cost management and enterprise strategy. Speaking of "strategy", our master strategist Porter mentioned the method of strategic analysis in his works. The most important thing is to be an enterprise. First of all, we should analyze the market life cycle and market share of enterprise products, and then determine the strategy it should adopt instead of blindly reducing costs. The ultimate goal is not to reduce the cost of enterprises, but to complete our cost management on the basis of fully considering the overall development strategy of enterprises. For example, differentiation strategy will cost a lot in the short term, but in fact, these new differentiated products will expand market share and obtain higher cost performance. Therefore, establishing the concept of cost-effectiveness is beneficial to the improvement of efficiency in the future. In this regard, we cannot but admire the foresight of the Japanese in cost management. In order to maintain high production efficiency and improve the technical level of products, Japanese enterprises usually adopt accelerated depreciation and early retirement methods to constantly update and transform equipment, preferring to pay taxes on early retirement of equipment. However, it is a common phenomenon that the equipment of enterprises in China is aging and obsolete, and some enterprises adopt the method of no commission or less depreciation to reduce costs, which makes the competitiveness of products gradually decline. Insufficient cost-based work has brought difficulties to enterprise cost plan management and cost decision-making.
The implementation of cost planning and cost decision depends on many basic tasks of cost management, such as quota management, original cost records, materials and materials measurement, and acceptance management system. If these basic works are not done enough, the cost planning and cost decision-making lack real and reliable basic data, which leads enterprises to make improper or wrong decisions. Generally manifested in:
1. quota management and original records are not perfect;
2. The basic work of measurement is not in place, and the phenomenon of "running, running, dripping and leaking" of water, electricity and steam is still very serious;
3. Waste of production materials;
4. There are some quality and waste problems in the procurement of raw materials and materials;
5. Only pay attention to the cost management of production process, ignoring the cost management of supply and sales process. For example, the phenomenon of "black-box operation" in material procurement is serious and the procurement cost remains high.
The solution to this kind of problem is simple. First, establish and improve the quota management system; Second, establish and improve the original record system; Third, enterprises should make original records of different contents in accordance with the requirements of comprehensively reflecting economic activities and meeting the requirements of comprehensive economic accounting; Four, establish and improve the measurement, acceptance and return system of materials. The cost analysis system is not perfect and it is difficult to make strong support for decision-making.
Influenced by the concept of long-term planned economy, enterprises often only pay attention to the management of production cost in cost management, ignoring other aspects of cost analysis and research, and the cost system is very imperfect, mainly as follows:
1. Limited to post-event analysis, no daily analysis;
2. Limited to production cost analysis, there is no daily analysis and forecast analysis;
3. Limited to economic analysis, it is impossible to conduct in-depth technical and economic analysis;
4. Limited to the analysis of the implementation of the cost plan, there is no cost-benefit analysis.
This concept of cost management is far from meeting the requirements of the market economy environment. In the market economy environment, enterprises should establish the concept of systematic cost management, regard enterprise cost management as a systematic project, emphasize the whole and the overall situation, and conduct all-round analysis and research on the object, content and method of enterprise cost management.
On the one hand, in order to make enterprise products have strong competitiveness in the market, cost management can no longer be limited to the production (manufacturing) process of products, but should expand its vision to the market demand analysis of products, the development trend analysis of related technologies and product design; Extend backward to the use, maintenance and disposal of customers. According to the requirements of total cost management, it will involve information source cost, technology cost, logistics cost, production cost, inventory cost, sales cost, customer maintenance cost, disposal cost and other cost categories. All these cost contents should be managed by strict and meticulous scientific means to enhance the competitiveness of products in the market and make enterprises invincible in the fierce market competition. If value analysis is carried out in the product design stage, it is a cost management method combining technology with economy.
On the other hand, with the development of market economy, intangible products are becoming more and more commercialized. Accordingly, the connotation of cost management should also be extended from material product cost to intangible product cost, such as human resource cost, capital cost, service cost, property right cost, environmental cost and so on.
Furthermore, under the condition of market economy, the focus of enterprise management has shifted from internal to external, from production management to business decision management. Studying and analyzing various decision-making costs has become an important part of enterprise cost management, such as related costs, differential costs, opportunity costs, marginal costs, cash costs, replacement costs, avoidable costs, deferrable costs and future costs. In enterprise cost management, paying attention to and strengthening the research and analysis of these management decision-making cost categories can avoid the huge losses caused by decision-making mistakes and provide a basis for ensuring enterprises to make the best decisions and obtain the best economic benefits. Enterprises do not attach importance to "hidden cost", which leads to "hidden cost" becoming a stumbling block to the development of enterprises.
The focus of enterprise cost management in China is superficial analysis, and China enterprises rarely consider reducing those costs that are easy to be caught and seen.
In my opinion, according to the design purpose of the market economy system, enterprises should be micro-organizations with the goal of maximizing profits, not just "units" that perform certain social functions. Therefore, enterprise managers must attach great importance to and pay attention to the "hidden costs" in enterprise management, take measures to comprehensively rectify those links that may produce "hidden costs" and eliminate some unnecessary interference. The responsibility of business operators and managers lies not only in expanding business, but also in strengthening internal cost control, especially those hidden behind the scenes that are not easy for us to find. Because they are so common, they can be seen in 80% or 90% of enterprises and exist in every corner of enterprises, so that we not only ignore them, but think they are "reasonable", default to their existing state, and call them "existence is reasonable" by borrowing the views of famous philosophers. Former Intel leader Grove said that "only paranoia can survive". In the cost control of our enterprise, especially for those ordinary but hidden cost waste, we must resolutely take measures to reduce it.
The "hidden cost" hidden in the enterprise is terrible, and its impact on the enterprise is cumulative and absolutely fatal. It is a chronic poison, and if measures are not taken to reduce it, the consequences will be terrible. Just like the antelope mentioned in "Wolf Totem", you must never eat too much in a place rich in water and grass. Only experienced and very smart antelopes can know the secret, because they know that the wolf is around and seize the opportunity to be ready to attack at any time. Excessive greed for fertilizer plants will only bring huge potential crisis to themselves. So it can be said that whoever ignores the cost management in enterprise operation, especially the control of "hidden cost", will never be an excellent enterprise! Cost control is limited to manufacturing costs, and there is no cost control in the whole process.
For a long time, cost control has been focused on the production stage, however, 80% of the product cost is locked in the design stage.
At present, the managers of enterprises in China have gradually realized the importance of cost, and also strengthened the cost control and cost planning of enterprises. However, many enterprises can't fully understand their own cost behavior, and there are still many defects in cost management. These defects are mainly manifested in: First, cost management is limited to production activities. Under the traditional planned economy system, production is the basic task of enterprises, decision-making, supply and sales are managed by the state as a whole, and enterprises can only control the cost of production process. Therefore, the traditional cost management only pays attention to the control of various expenses in the production process, while ignoring the control of research and development costs before production, supply costs after production and marketing costs. Affected by this, most managers who mention "cost" will naturally think of production and limit cost management to the cost in production activities. According to the value chain analysis, an enterprise is a collection of "a series of activities" aimed at ultimately satisfying customers' needs, and it is an "output" composed of "a series of activities". Cost is not only related to production links, but also a whole concept. Cost management should be a comprehensive monitoring process of investment, research and development, design, production, sales and after-sales service; Second, the misunderstanding of cost drivers. Many enterprises in China often misjudge the cost drivers.
Traditionally, the distribution of manufacturing costs is based on the working hours of products, which contains an assumption that the occurrence of manufacturing costs is also directly related to the output of products and is directly proportional. Production preparation, material handling and other expenses are directly related to the output (working hours) of non-products in the production times. Therefore, although the unit machine working hours of the direct material cost of products with small batch production and complex technology are almost the same, the unit manufacturing cost of the former is much higher than that of the latter. However, the increase of scientific and technological content in modern products makes the manufacturing cost of products irrelevant to the production quantity, or at least not directly related to the production quantity, but underestimates the cost of high-tech products, and the error of cost calculation leads to the error of production decision.
According to Cooper and Kaplan's "success drivers" theory, cost drivers can be divided into five categories: quantity drivers, batch drivers, product drivers, processing drivers and factory drivers. From this point of view, we should explore and find new cost control methods on the basis of analyzing various cost drivers. For example, according to the analysis of cost drivers by ——ActivityBasedCosting (ABC method), enterprise costs can be divided into short-term variable costs driven by business volume drivers (such as direct materials and direct labor). ) and long-term variable costs (mainly indirect costs) driven by workload drivers.
It can further inspire some new ideas and concepts of enterprise cost management. For example:
1. Take the consciousness of cost control as a part of corporate culture. To eliminate the misconception that the cost can't be reduced any more, and to train and educate all employees of the enterprise, managers at all levels and all employees of the enterprise need to fully realize that the potential of enterprise cost reduction is endless, and everyone should pay enough attention to cost control.
2. Form employees' awareness of democracy and self-management within the enterprise. In the daily cost management, we actively use the research results of psychology, sociology, social psychology and organizational behavior, and strive to introduce an internal restraint and incentive mechanism into the employee behavior norms. According to the hierarchy theory of human basic needs put forward by western psychologist A Maslow, human needs can be divided into five levels from low to high: physiological needs, security needs, social needs, respect needs and self-realization needs. The introduction of internal restraint and incentive mechanism is to pay attention to the highest-level needs of people, that is, the needs of self-development and self-realization. This mechanism emphasizes the self-motivation of human nature and does not need any external factors. It is not only the lowest cost management method, but also the most effective management method to reduce the cost by changing the external constraints and incentive mechanisms commonly used by enterprises through rewards and punishments.
In a word, in enterprise cost management, we should establish the cost management concept based on multiple incentive theory. This concept of cost management based on cost driver analysis can often induce new ideas and effective measures for enterprise cost management. Cost assessment is not fully implemented, so it is difficult to effectively provide enterprise benefits.
The cost assessment failed to be put in place first because some enterprises did not manage the cost responsibility center well. In terms of cost responsibility, there is no management system of responsibility budget, responsibility accounting and responsibility analysis, which is not closely related to the economic responsibility system of enterprises. If the cost management cannot be implemented to the specific responsible subject, the assessment will be out of the question. Therefore, the most clear approach is:
1. Establish a scientific and reasonable cost management system. Establish and improve the cost management team with the heads of management, accounting, supply, sales, production, technology and other departments; All relevant departments should also be equipped with part-time staff to carry out statistics, attendance, quality inspection, storage, accounting and analysis. It is necessary to carry out regular professional training and knowledge renewal and re-education for cost management personnel, improve the professional knowledge of cost management, and open up broad ways to reduce costs;
2. Improve the economic responsibility system of cost management. First, formulate cost management rules and regulations, such as basic management and cost restraint system; The second is to clarify the economic responsibility of each cost and implement the responsibility to the department or individual; The third is to implement rewards and punishments. In the market economy environment, economic benefit is always the primary goal pursued by enterprise management, and enterprise cost management should also establish the concept of cost benefit and realize the transformation from the traditional concept of "saving and saving" to the modern concept of benefit. Especially today, with the gradual improvement of China's market economy system, enterprise management should be guided by market demand, and strive to make enterprises get as much profit as possible by providing products and services with as high quality and perfect functions as possible to the market. Consistent with this basic requirement of enterprise management, enterprise cost management should be directly related to the overall economic benefits of enterprises, and a new concept-cost-benefit view should be used to look at the cost and its control. All the cost management activities of an enterprise should be guided by the concept of cost-effectiveness. From the comparative analysis of "input" and "output", we can see the necessity and rationality of "input" (cost), that is, strive to pay as little cost as possible, create as much use value as possible, and obtain more economic benefits for the enterprise.