Research On Cost Management Of Construction Enterprises Based On Value Chain

Construction industry is one of the most important industries in China and holds special active effect in Chinese economy. At present, cost has been the most important factor in weighing enterprise's competition position since the other factors such as security, technology and quality management have been executed well by most Chinese construction enterprises. For a long time, people have been applying the model of manufacturing enterprises to construction enterprises. However, in the market economy environment, many construction activities have turned to be service activities. So searching a cost management system that suits to construction enterprises is an urgent task. Value-chain method just provides a good idea for the cost management innovation of Chinese construction enterprises.The cost management system based on value chain can get the essential of cost in the view of value. Through the analysis of industrial value chain, enterprise can break away from itself and look upon to cost in a greater background; through the analysis of enterprise inner value chain and competitors' value chain, enterprise can find many chances to lower its' cost in all of company's activities and from the links of all kinds of activities; through the activity-based costing management, enterprise can make cost management go deeply into the lowest level of activities and help make decision for management. So the cost management system based on value chain possesses excellent future to be applied in enterprise.This article mainly discusses the value-chain method applying on the cost management of construction enterprise, based on the reality of cost management on China One Building(COB)company, a typical Chinese state-own construction company. In the first part, the article analyses the characteristics of Chinese construction enterprise' operation and cost management, and then describes COB's cost management situation. In the second part, the article executes the value chain analysis to the cost management of construction enterprise, and then brings forward a cost management model of applying value chain cost management in construction enterprise. In the last part, linking with the practice of COB, the article discusses the topic of Chinese construction enterprise's cost management innovation combined with the perspective of integrating enterprise's cost management system using the method of value chain.