The Research Of Value Engineering Innovation In "A" Company Based On Target Cost Method

Recently,due to the increasingly fierce competition in China automobile industry,vehicle prices are dropping,but most of China’s automobile enterprise can’t guarantee profit with low price strategy,the domestic automobile industry is facing severe challenges.In this case,to obtain sustained competitive advantage and survival space,automobile enterprises must formulate scientific and effective cost management strategies.This paper studies the cost management method of a large state-owned automobile manufacturing enterprise——“A” company,analyzes its issues in cost control,and discusses the establishment process of “A” company’s value engineering cost management system,researches the target cost management,and summarizes the effect.It is a great significance for “A” company to establish a competitive cost strategy and achieve development in the highly competitive automobile industry.Based on the research methods of literature review,field investigation and case analysis,this paper combines theoretical analysis with case study on the basis of literature review and practical participation.With the help of practical management methods combined by target cost and value engineering,this paper focuses on “A” company’s cost management strategy.Firstly,the present management status,vehicle development process and cost management of “A” company are summarized.Secondly,according to “A” company’s practice,cost management strategy is divided into four parts: setting target cost,calculating cost gap,realizing target cost through value engineering,continuous optimization and improvement.Then,this paper describes the application of value engineering system based on target cost in “A” company,with the safeguard measures.Finally,the effect of “A” company’s cost management system improvement is summarized.The main research conclusions are as follows:(1)the target cost should be market-oriented.(2)The key to accurately calculate the cost gap is to directly estimate the design cost.(3)Value engineering management based on target cost is an efficient cost control method.(4)Continuous optimization of cost depends on the enterprise’s attention to cost control.(5)The organization and process system are the successful guarantee of the automobile enterprise cost management.Although this paper only studies the case of company “A”,it has some enlightenment on the cost management strategy of the whole automobile industry and provides reference experience for the cost control of some corresponding industries,such as aviation,construction,electronic and other large manufacturing industries.