MM Automotive Components Enterprise Procurement Research Base On Objective Costing Management

With the rapid development of global economy and drastic competition in the market, for the automobile parts industries, the enterprises have paid attention and attached increasing importance to the optimization to scientific cost management model. The objective costing management is the achievement of the strategic management for industry cost, which expands cost management to the life cycle and value chain of the entire product, then management is implemented to all the phases of the product life cycle. Besides, the internal cost management activities inside the enterprises will be extended both towards the suppliers and customers. The procurement cost has fundamentally influenced the total cost of enterprises, as well as the potential profits. Therefore, enterprises have come to realize that suppliers will also affect the value created by final products and services in enterprises from different perspectives. Thus, effective management of the procurement activity and suppliers have risen to be the strategic task during the process of enterprise production and management.The paper applies theories, such as supply positioning model and target costing management, and methodologies combined with theories and cast studies, to analyze the current situation of procurement management in Marilyn Automotive Electronics Guangzhou co. Ltd(hereafter refers to MM), and the existed problems and solutions during MM procurement management in aspects, like the organization situation,management process and procurement strategies. On the basis of the above analysis,the paper will further discuss about the factors and causes influencing MM target costing, and come to the conclusion that flexible supply positioning model lead to the implementation of target costing management in MM corporation.Based on the reached conclusion, through analyzing the implementation of objective costing in MM Jeep 55 X Project, application suppliers manage the previous involve in designation, VA/VE activities, and supplying chains and reach the target costing. Through the study of the corporation on the target costing management system and tool applications during all the phases in the life cycle of Jeep 55 X Project,the strengths and weaknesses in target costing management are made clear. Aiming at present construction and improvement of target costing management system in domestic automotive components enterprises, the paper works on giving several suggestions. The paper provides a new way of thinking for objective costingmanagement system in domestic automotive components enterprises through researches on the practical cases of target costing management activities during all phases in MM Jeep 55 X Project. Besides, based on that, it aims to achieve a comprehensive improvement of the objective costing management of domestic automotive components enterprises.