The Research With Problems And Countermeasure On Inventory Cost Control Of Shida Locomotive Manufacturing Company

The cost advantage is the main method for enterprises to gain competitiveadvantage. Under the current circumstances, due to the particularity of the railequipment manufacturing industry, enterprises are under huge inventory costpressures. It is a difficult problem for enterprises in rail transportation equipmentmanufacturing industry to reduce inventory costs in the fierce competition.Shida Locomotive Manufacturing Company, as China’s one of the best main railtransportation equipment manufacturing enterprises, has the world’s largest electriclocomotive manufacturing base with strong technical advantage and highly relativelymarket share. However, there are still some problems in terms of inventory costcontrol for Shida. If not get better control, Shida would weaken its competitiveadvantage.Basing on summarizing the domestic and abroad research results as well astheory of the rail equipment manufacturing, this paper considered the actualsituation of Shida Locomotive Manufacturing Company, then provided a detailedanalysis of their inventory cost control problem. The problems happened in ShidaLocomotive Manufacturing Company are mainly concerning of lagging inventoryaccounting work, not accurately reflecting the cost of inventories; flawedinformation management, low degree of sharing information; inadequate internalcontrol. Further it is quite shallow for enterprises to know how to control theinventory cost and there is no coordination of related management aspects place andother issues. To address these issues, It is better from financial accounting, IToptimization, strict internal control, cooperative control costs, and human resourcesbuilding perspectives as well as combining with the actual situation, to strengthenthe accuracy of corporate financial accounting and control; further to strengthen thesupporting role of IT optimization in order to effectively underpin internal controls,reduce administration loopholes, concerted effort to minimize the total cost of theinventory, and strengthen qualified personnel.