Research On Cost Control Of Autoparts Milkrun Project Of Jingbei Motor Company

Nowadays, automobile manufacturing companies usually spend60%to70%oftotal sales on purchasing activities, and supply and logistics costs account for20%to30%of whole purchasing cost; Milkrun logistic mode, as the most effective means ofcost reduction throughout the integrated supply chain, could cut the inventory level ofparts and components, reduce the risk of autoparts activities and the possiblity ofproduction line stop, and has been widely used in oversea motor groups. In Chinadomestic market, the implementation of the mode are basically picking up by jointventure brands, the local brands have very few successful experiences.The main goals of taking strategies of milkrun mode in supply logistics of partsand components are reducing the transportation and inventory cost, therefore the keyindex of successful projects is cost control. With respect to the advantages of jointventure brands in the overall planning, project experience and capabilities ofsuppliers’ dealing, the largest advantage of local brand is cost performance, costadvantage is an effective way to maintain the existing market share. But as the laborcost is not a cost advantage like before, the price rising caused by high resourceconsumption and the relatively low customer loyalty, resulting in reduction overallprofit margin of local brands, eventually the price is still a major factor in customerchoice. The foreign brands have begun to use the platform advantages to achieve theeconomies of scale and gradually possess the market, which will provoke a massiveand unavoidable price war again. To maintain profit and enterprise competitiveness,only way is deeply mining other profit sources.The main body of this article is to through the analysis of the cost problems in parts and components supply underneath milkrun mode taking by local automobilecompanies, find out the shortcomings and deficiencies of cost estimating and budgetmanagement in starting and planning phases of the project. According tocharacteristics and limitations of local brands, to analyse reasons from internalprocesses and external environments and to determine the direction for improvement,finally effectively controlled the cost relying on the scientific method. From how tochoose the suitable mode of transport, the appropriate choice of vehicle, the use ofstandardized packaging, pallet unitization and other functional factors such as workefficiency enhanced, and the use of activity-based costing, factor analysis and otherscientific methods to estimate total logistics costs, and ultimately determine theoverall solution, maximum improve the loading rate and shorten the window time. Inthe planning phase of the project, it needs to establish contingency plans for costcontrol, cost control requires preprocessing, then use the successful experience of theproject to improve the completeness and accuracy of the project budget so that thebudget cost could be the key points of actual cost. The estimated cost can notbreakthrough the actual cost, when one can not be reached, only could maketrade-offs between quality, cost and time. In concessions through several aspects toensure the smooth progress of the project. To through the accumulation of projectsexperience, gradually formed local brands for parts packaging, transportation andwarehousing control rules. Only to achieve the scale of operations, the facilitate ofspecialized technology, mechanization and automation of operations could be used,thus greatly improving the operating efficiency and reduce the unit cost of services,improve the core competitiveness of logistics services, meanwhile won morethird-party logistics services profit source and other logistics profit. The premise ofenhancing the manufacturing capacity is logistics support, if no fully pre-planning,nor logistics standardization implemented, it will bring normous waste of resourcesand duplication of investment in the latter part of the logistics optimization, it is difficult to achieve companies health and rapid development goals. Logistics costsreduction provide local brands competitiveness, it has important practicalsignificance.