The Integration System Of Enterprise Cost Management Based On ABCM

The globalization of market and motivation of demand of current economic development have make enterprises under more and more market pressure and serious competitive situation. Then how to gain more competitive advantages has been an everlasting topic of theories and practices of enterprise management.Cost is the source of value creation and the driving force of earning profit. The consumption of resources will lead to the creation of value in terms of cost, and cost management is a managerial behavior designated to utilize resources to the maximum and with higher efficiency, which has played more and more important role in the serious competition. Besides, the limit of economic resources and the infinity of Human Beings' demands have made the competition between enterprises become the competition of cost. So it is not exaggerated to say that the management of cost is the key of the success of enterprises. During the past decades, "Made in China" has been the pride of the Chinese manufacturing industry. Unfortunately, the cost advantage of Chinese enterprises can only create the advantage of sales volume rather than profit. Just the comment of McKinsey & Company, the Chinese giants with cost advantages usually are poor in cost management. For example, with the increasing entry of transnational companies into China, the problem of management, especial cost management has been concerned by more Chinese enterprises. So how to construct the suitable cost management system and to combine the advantage of resource and the advantage of management has become the urgent task of Chinese enterprises in order to maintain the long-term competitive advantages. This is also the starting paper of this dissertation.Based on the theories of enterprise resource, value engineering, system science as well as economics, and the methods of Activity-based Management (ABM), this dissertation studies the system of theories and methods of integration system of enterprise cost management based on ABCM in combination with modern information-processing technology and management integration technology systematically and comprehensively. Firstly, through the detailed analysis of research backgrounds, it presents its motives;secondly, with the probe of the relationship between enterprise resource and cost management integration, it lays the theoretical foundation of constructing integration system of enterprise cost management based on ABCM;thirdly, by the introduction of working mechanism of ABM, it analyses the managerial advantages of ABCM system;fourthly, it puts forth the four elements of integration system of enterprise cost management based on ABCM in terms of system theory as follows: goals, conditions, objects and subjects;fifthly, through the analysis of the defects of traditional cost management system and the reasons of lack of cost management information in Chinese enterprises, it explores the necessity of innovating the conceptual structure of enterprise cost management in China andconstructs the conceptual structure of integration system of enterprise cost management based on ABCM;sixthly, it discusses the goals, contents and design principles of integration system of enterprise cost management based on ABCM, develops the basic models of integration system of enterprise cost management based on ABCM, and sets up the viewpoint of two-dimension cost management information system;seventhly, with the establishment of cost evaluation system, it explores the appraisal of efficiency of distributing enterprises resources;offered some evaluate index about activity ability cost, enterprise resource type competition ability and manage type competition ability;lastly, by the case of the application of integration system of enterprise cost management based on ABCM, it tests the practical significance of integration system of enterprise cost management based on ABCM.This dissertation contains following innovative points:Firstly, it sets up the conceptual structure of cost management integration of enterprises and realizes the efficient integration of object cost management, standard cost management, responsibility cost management, activity-based management, strategy cost management and cost planning in the same management process.Secondly, it takes one automaker as the case to design the cost accounting and cost management system with three levels of parent companies, subsidiaries or divisions, and activity departments, which can adapt to both the Chinese Accounting System and the International Accounting Standards.Thirdly, it constructs the model of cost management integration based on ABC/ABM;it realizes the efficient integration of material flow, information flow, funds flow and value flow with the construction of platforms of activities, data-processing and information. Realizes the instant and dynamic acquisition of two-dimension cost management information: One is based on financial statements and the other is based on operating decisions.Fourthly, reconstruct the cost evaluation system;establishment of cost evaluation system based on efficiency of distributing enterprises resources, it explores the appraisal of efficiency of distributing enterprises resources;offered some evaluate index about activity ability cost, enterprise resource type competition ability and manage type competition ability.Besides, this dissertation is based on the practical scientific research items, which is a positive inquiry of the cost management model suitable for the Chinese enterprises and a tentative innovation in theories and methods of cost management. It aims at exploring the efficient combination of resource advantage and management advantage of enterprise cost management.Type of dissertation: Theoretical and applied researchThe research of this dissertation is sponsored by Scientific Research Plan of Hubei Province (No: 2003AA402B05).