Research On Cost Reduction System Of M Company Based On Value Engineering

With the increasingly fierce industrial competition and the entry of new competitors from time to time,plus the constant technical innovation and breakthrough,cost is becoming a more and more critical factor in the game between automobile parts enterprises.Therefore,the procurement cost,which accounts for 60%～70% of the total cost,must be controlled,optimized and reduced.However,the price depression through bargaining with suppliers,large quantity or sacrificing quality is far from enough.In order to get a substantial,continuous and more acceptable cost saving,value engineering(VE),has become the most efficient method currently.M company studied in this paper is a medium-sized auto parts enterprise,who is was facing industry slumping and huge price pressure,how to reduce purchase cost(hereinafter referred to as cost reduction)had become a great challenge.By using VE innovatively,M company saved 80 million in three years,greatly eased the cost pressure.The purpose of this dissertation is to summarize and analysis the successful experience of the VE application in M company,so it could be used for reference for other companies.This dissertation firstly reviewed the literature on VE management,purchasing management and cost management home and abroad,then introduced M company’s the cost saving achievement by using VE method.In the fourth chapter,through linking theory with practice,such as literature research,field observation,interview analysis,case analysis.Through these research and analysis methods author presented the M company’s VE cost saving management system,which is composed of 4 parts: the management principle,create virtual organizational structure,normative and clear implementation,performance management and promotion through training.Through the summarization of these critical factors,and the case analysis of M company 013 A auto intake grille VE cost saving,the author approved the practicability and effectiveness of this system.