Optimization Study On Target Cost Management Of ZE Company

With the continuous development of modern science and technology, nowadays, it is very difficult for a company to keep its advantages by just making high-end products with advanced technology and pursuing differentiation, in this increasingly competitive global market. Therefore, cost control becomes essential to enhance market competitiveness and achieve high profits, as well as a good strategy to cultivate enterprise core value. Thus, cost control meant to be the principle for a enterprise's long term development. There have been significant changes in the marking and profit models in China's automobile and parts manufacturing industries, compared to ten years ago. The main competition between automobile and parts manufacturing enterprises has moved from product quality to product price. Therefore, it challenges auto parts manufacturing enterprises with higher request on lowering the cost of products. Under the same standard quality condition, only the enterprises who have lower price are able to obtain orders, generate revenue through large-scale production advantages and win the profits. The target cost management, which is based on enterprise budget and enterprise management goal and achieved by the cost forecast, cost decision, determination of target cost management, has played an important role in promoting the level of enterprise cost management, reducing cost and improving enterprise economic yield and enhancing enterprise market competitiveness. It is through target cost management that a enterprise cost management system is optimized and a stable long-term competitive advantage is maintained.The topic of this article is based on a real research project at the author's work place, analyzing a actual case of target cost management comprehensively. First of all, the implementation background of the company's target cost method is introduced, including basic ZE company introduction, the current cost management situation inside the company and its the main customers, competitors and suppliers, and so on; On this basis, this paper discusses the present situation and existing problems of the target cost management, from the target cost goal set and decomposition to the target cost implementation and feedback; Finally, aiming at the existing problem of ZE company target cost management, this article puts forward optimization measures and safeguard measures to improve the ZE company target cost management, looking forward to obtain a good target cost management effect.Currently, most researches on target cost management are based on large and medium-sized enterprises, whose management systems are relatively mature. Very few attention has been paid to target cost management of small enterprises. This article focuses on the research of small and medium-sized automobile spare parts manufacturing enterprise target cost management. Based on the conclusions and reflections from ZE company case analysis, it not only provides important guidance to ZE company for its subsequent cost control, but also benefits many other small and medium-sized auto parts manufacturing enterprises from learning from this case.