Research On Cost Manangement Of LR Company’s Car Seat Based On DFC

"The father of competitive strategy" Michael Porter listed the cost product leadership strategy as one of the three major strategies for the company’s sustainable development,all management activities of the company are reflected in product profits,expanding sales revenue and reducing product costs are the only way for companies to maximize profits.After car sales peaked in 2017 showed a downward trend.OEM transmitted the cost pressure to their suppliers;cost competition is the main direction of competition for a long time in the future.In recent years,LR company has been impacted by local seating companies with low cost development,which lead to business with negative changes,so LR company urgently needs effective cost management methods.After reading many literature and investigating the cost management methods of enterprises in the industry,design for cost(DFC)is more suitable for the needs of LR company,DFC considers the full life cycle cost of the product from the design stage,this stage has the greatest freedom to design products with minimal cost,and fix the cost into the drawings.This dissertation sorted out the cost management problems of LR company through case and process analysis,found out the root causes of high seat costs and inadequate cost control,thereby building the DFC cost management system as the solution,the main achievement in the following four aspects.(1)Established DFC cost management operation system.This system has clarified the thought and direction of cost management for LR company,its closed-loop mode with circle optimization function,the longer the operating time,the better the effect.(2)Established DFC cost management process and organization.After the reengineering of the management process,which realized control cost in earlier stage.The newly set organization integrates the two major fields of engineering and finance,which strengthens the control of costs.(3)Established target cost control mechanism.The mechanism set up a cost communication bridge between the engineering department and the cost management department,meanwhile proposes a guarantee system for achieving the target cost.(4)Established cost analysis system.The total cost is separated into the design structure cost and the financial cost,the design structure cost is estimated by the engineering management department,and the engineering department can refer to the cost information at any time to select the best solution.In the manufacturing stage create a cost accounting model,the cost management department lead the team to analyze cost deviations,find out the reasons,and propose improvement measurement.