A Study On TG Iron And Steel Company’s Management And Control Of Hidden Logistics Cost

China’s steel overcapacity problem has become increasingly prominent with market demand shrinking and profit margins squeezed since "twelfth five-year" in the case of international economic decline and the domestic economic slowdown. Under the new normal of small profit and zero profits or even losses in the current steel industry, TG steel company logistics management was relatively extensive, controlling only to transportation, warehousing and other explicit logistics costs invoiced, lack of system identification and management with the implicit logistics cost, leading to the high logistics cost, what seriously hampered the competitiveness of its products and business development. Therefore, to study its implicit logistics costs and take measures to optimize the management and control is very urgent and important.This paper first analyzed the state of TG steel company logistics cost management from the scope of logistics organization, logistics, business management, logistics management mode, it is concluded that the main problems and the cause of the logistics management. First, There is no special management of the logistics department, and it lack of specialized and centralized management. Second, it only managed the internal logistics of the factory, however a large number of raw materials and product transportation depend on the suppliers and customers. Third, both of business level and financial level are typical of the dominant logistics cost management mode, both usually lack of identification and control for implicit logistics cost, this is the essential question, also is the cause of the first two questions. This paper combed TG steel logistics processes and logistics cost management situation carefully from purchasing logistics, distribution logistics, production logistics, returned logistics four aspects to analyze the logistics, and identified eight major implicit logistics costs:costs of passing on upstream and downstream customers, inventory holding costs, logistics loss costs, etc. For the eight major implicit logistics costs exist in TG steel company, this paper establishing a "joint committee+logistics center" management model to achieve efficient centralized management and control; explicating the implicit logistics cost, establishing the cost management mode of full logistics; establishing logistics integration system of procurement, production, marketing; deepening logistics site management; completing the first-line technical measures. TG steel company would drop more than 5% costs, and the benefit of enterprise could increase doubled or even quadrupled after comprehensive system optimization by pre-evaluation.This paper had two innovations:Firstly, it identified eight major recessive logistics costs systematically, and developed eight major logistics implicit costs explicit solutions innovative that enabling normalization of implicit logistics cost control, expanding TG steel company and even the steel industry logistics cost reduction space. Secondly, it proposed "logistics joint committee+Logistics Centre" logistics unified management and control organizational model, promoting TG steel company logistics continuous optimization ability.Meanwhile it had a certain instructive for other companies in the same industry.