Research On Cost Control Under The Lean Production Implementation Of Y Company

With the increasingly fierce market competition, pursuing differentiation andcost leadership to seek the maximize corporate profits become the basis of mostcompanies. Cost control has become one of the most important determinants ofenterprises to participate in market competition to win. Therefore, for China, as acountry is on the construction of a conservation-oriented society, how to effectivelycontrol and reduce costs, as well as strengthen enterprise cost management hasbecome an important topic in the study of contemporary business.In today’s open global integrated information economy, the competition is notonly a race on modern enterprise products and services, it has expanded the contestbetween companies throughout the supply chain. The idea of traditional costmanagement is mass manufacturing. However, this idea is only fit for traditionalbusiness model because it blindly seek to maximize production efficiency withoutfully considering the total cost of the enterprise, resulting in a great waste. Massproduction, high inventory and low quality are not conducive to the sustainabledevelopment of enterprises. Changing the original product process, strengthening costcontrol, and improving cost management are imperative in today’s manufacturingenterprises. We must create a new mode of production and cost control due to thetraditional way has many limitations. Lean manufacturing is a proven, structuredapproach, which is working from the perspectives of the design, procurement,inventory, quality and on-site in the course of business operations, in a bid to analyzeand improve operational costs. With the combination of cost strategy and cost control,it improves the cost control system, reduce production costs and eliminate waste, bestto meet customers’ diversified needs.However, in China, some of the enterprises which have implemented leanmanufacturing often focus only on changes in production management while costreduction methods rarely call an attention. Therefore, for this kind of phenomenon,we choose the costs control under lean manufacturing for the study. First, this paper study on the lean manufacturing and cost control theory, laying the theoreticalfoundation of this study. Secondly, through the introduction of the application of leanmanufacturing in the domestic automotive industry, analyze the feasibility andnecessity of promoting cost control under lean manufacturing in China’s automobileindustry. lean manufacturing has become a trend of the automotive industry needs anddevelopment. Again, this paper make a in-depth analysis of the company Y switchingfrom traditional cost management to lean cost management. Company Y took theadvantage of the essence of the theory of lean manufacturing-eliminating the "sevenwastes", and obtained significant improvement in cost control. This paper is toemphasize the importance of the combination of lean manufacturing methods andcost control and raise some questions which should be noted in the practicalapplication.