Applied Research Of Target Cost Management In China’s Manufacturing Based On The Perspective Of Product Life Cycle

Under the background of unstable international financial situation and increasingdecisive role played by our market economy, enterprises are facing tremendous test andthe pressure of management transformation. In order to cope with the changingdomestic and international situations, enterprise’s cost management is a particularlyimportant part of enterprise’s management, and the cost management methods as thecore of cost management should keep up with the times for reducing unnecessary costs,and enhancing the competitiveness of enterprises. Currently, enterprise’s concepts andmethods’ of cost control in our country are lagging behind, so it is difficult to provideeffective support for the development and implementation of the scientific enterprisebusiness strategy. Therefore, the enterprises must solve the problem on how tostrengthen cost management in order to find survival and development and cultivatelong-term competitive advantage. Traditional cost management methods exist all kindsof drawbacks, which cannot meet the requirements of the new era of cost control; it isimperative to convert the existing concepts of management, expand content ofmanagement and explore the advanced cost management under new environment. Inthis context, a variety of new cost management methods are constantly emerging.Currently, some of the industries have entered the era of meager profit and theprofit space is very limited, so better cost management has a crucial effect on improvingthe economic of enterprises efficiency, in a sense, the competitiveness of enterprises inthe final analysis is the level of cost management, but a large number of the enterprises’cost management still focus on manufacturing costs and give less concern on researchof the cost management on the design phase, sales stage and service stage, which isdifficult for enterprises to make correct business decision. This paper is based on targetcost management perspective and breaks limitations of the traditional cost control,which focus on the production phase. It will extend the range of cost managementforward to the stage of product sales and consumption and back to the stage of productdesign and finally established a full life cycle philosophy. Target cost management is akind of management concepts which see target cost as a management object. It is animportant part of enterprise management by objectives, control costs and expenses’occurrence by determining and implementing the target cost, then mining enterprises’ potential of reducing costs, thus achieving the goal of improving enterprises’ economicefficiency. Now a growing number of enterprises are on the use of target costmanagement thought in varying degrees, and achieved good cost control, but there aresome common problems in practical application. The paper takes typical manufacturingparts producers ZD company for instance to analyze the current situation and carry on asimple prospect, and provide some experience for those enterprises in the same industrywith similar problems and inspire them.In this paper, based on the content of cost management objectives, I take the formof combining standard research and case analysis for study. Firstly, carry on a moreexhaustive elaboration of the background and significance of the research status and theachievements at home and abroad, research ideas and content of the paper, cost andtarget cost management theories, principles and characteristics. Secondly, discuss howto carry out the target cost control from design to service stage systemically. Finally, ZDcompanies, for example, on the basis of introducing the enterprise’s products’ design,production, marketing, sales and other aspects of cost control situation, then summed upthe effect of the company’s cost control efforts and the way to go in future.