The Cost Control Of DCC Hoist Machinery New Product R&D Project

In today’s constantly changing information era, if an enterprise wants to surviveor achieve long-term development, the most critical factor is whether its productscan bring lasting reputation and profits. Nowadays, the world is undergoing thevigorous development of science and technology. How can an enterprise outstand inthe market full of new products? It depends much on the continuous R&D at a highrate of speed.Market competition has become increasingly fierce. Usually, it is almostimpossible for the enterprise to decide the product price only by itself. Therefore,expense control and cost cut are the best ways to improve the competitiveness of theproducts and profits. Any manufacturing or selling enterprise starts the business fromdesigning and developing new products. The total actual cost of the products hasbeen basically determined in the design and development process. In addition, forthe manufacturing technique and process during mass production, such as theproduct assembly, raw materials outsourcing and machining, etc., the mostcontrollable part is only to improve the efficiency of the machining and assembly,and to reduce the losses as well as the use-costs of raw materials in the process ofproduction.That is to say, once the product R&D is completed, its target labor cost andmaterial cost have been basically firmed. It is quite difficult for the manufacturingcenter or other relevant departments to change birth defects of design. As a result,the fundamental way in all technical and economic solutions for leading product iscost control at the beginning of the new product R&D process.This paper is aimed at cost control through studying new product R&D processof hoisting machinery industry, and exploring the related methods and models of cost control in new product development process. Quality cost, product component cost,labour cost and time cost are primary costs in the R&D of hoisting machineryindustry. However, due to the particularity of the industry, those cost factors are aptto show with specific data. In general, there are three levels: high, medium and low,to describe and define the various levels, and each level has certain fuzziness.In this paper, the application of AHP and Fuzzy Comprehensive EvaluationMethod classifies and concludes these factors. Basic data for model is obtained bythe Delphi method, and the relative level of importance among cost factors is byAHP. Besides, each level of R&D cost factor and the overall level of cost control canbe gained through Fuzzy Comprehensive Evaluation Method. Thus the cost analysisKPI system for hoist product R&D is established.And on this basis, the Earned Value model is adopted for real-time tracking andmonitoring the status of key cost control in the R&D progress, so thatdecision-making level can clearly know the cost at all stages. It is beneficial toformulate after-cost control improvement measures so as to win the opportunity ofhigher profit value and market position for the enterprise.In the end of this paper, the above-studied knowledge of project cost control issuccessfully applied to the new product R&D project for DCC hoisting company. Itprovides the staff working in hoisting machinery industry with the effective ideasand ways of cost control both theoretically and physically.