Case Study To The Approaches Of Implementing Costing Strategy For Manufacture Industry

According to the competition theory, a company's core competitive power is resulted from differentia or lower cost of products.Internal management capability is also can be one sort of core competence.Chinese manufacture industry has been developed for many years and,so far,we still can imagine that better costing will be their core competitive power for a long term.Traditional costing methods were based on general budgeting system. according to the principle of transfer price to define responsibility centres and,the performance of responsibility centre is associated with its financial index. This method is also accompanied with very high statistic cost difficult to be carried out in Fast growing Chinese companies because of poor human resourses . We attempt to start our study from the analysis to a manufactural company's core competitive power and, based on such principles: products-orientated, emphasizing on how to perform, low syatistics expenses, activity-based costing strategy, guidance to operations etc. Contents of this article include how to evaluate a company's potential of cost control, how to establish a cost management framework fast, how to push and,how to organize working groups to obtain continuate improvement (KAIZEN). The approaches of this article is to design a Biz plan which including explicit measurable indicators to measure the operation departments' performance. The approaches was associated with management experience of German "Volkswagon" company.