Study On Cost Management In Supply Chains: Categories And Operation Supports

Supply chain management (SCM) is the product of development of socialeconomics. Cost management in supply chains is more important content of SCM. Inrecent years, cost management in supply chains is taken into account. On the onehand, due to competition between enterprises displace competition between supplychains (SC); on the other hand, accompanied by systematic methods of product costmanagement, potentiality of cost optimization is carded out only by managing thetotal cost of SC. That signifies cost management in supply chains is bound to thetrend of modern cost management. But many researches in literatures is scattered inkinds of disciplines and realms, researches in cost management in supply chains arenot focused on, by which people can explore the developing and involved supplychain world.The purpose of this dissertation is that: to raise an operative theoreticalframework of cost management in supply chains and to further integrate and developrelative theories and methodologies based on many research results and to offerenterprises and its SC systematic theories of cost management in supply chains tohelp them gain long-term competitive advantages and create value. The mainresearch method is normative research and the dissertation attempts to combinequalitative analyses and quantitative analyses and tries to connect logical deductionwith historical induction and resort to some mathematical models. All is orientatedthe advanced research results.Cost management in supply chains is inter-organization cost management. Withthat is the importance of transaction cost, on the other hand, it is urgent to managingactivity attribute cost of activity chain of SC. Because cost management patternbased on activities is an important characteristic of cost management orientatedvalue creation. Cost management in supply chains is the new development ofstrategy cost management and oriented value creation.This dissertation divides cost management in supply chains into two attribute categories: transaction attribute cost management and activity attribute costmanagement. Transaction attribute cost main points to transaction cost; whileactivity attribute cost includes activity cost and quality cost and time cost. That is,the cost in SC includes four cost categories.Cost of SC has the feature of total life cycle cost (LCC). The cost chain of SCconsists of cost chain of R & D stage, of product stage, of sale and customer servicesstage. Two "process methods" are used in cost management in supply chains, one issupply chain activity-based costing (ABC), the other is supply chain target costing(TC). The two methods can be integrated into LCC.Due to now it is difficult to use economic measurement, especially usecurrency to calculate, the paper suggests to use four reality ways to manage cost insupply chains. They are listed below: contract management, provision management,channel management and customer relationship management.The dissertation aims for cost management toward activity of differentmembers of SC, and further researches cost management toward quality and towardtime. On the basis of these contents, the evaluation indexes system and methodologyof the effect of activity attribute cost are presented. Of cost management towardactivity, it analyzes cost management of product design and production ofmanufacturer, cost management of providers, distributors and costomers. Of costmanagement toward quality, it analyzes the thinking of "process quality" and itsattainment, and provides provider quality assurance rules and ABC application of theprovider quality cost management. Of cost management toward time, it constructsthe consists of supply chain cycle time and offer five ways to realize reasonably timescheme.It's necessary for Cost management in supply chains to construct its operationbasis and securing mechanism. Of operation bases, cost information system istechnology element, while net and chain structures and organization structures areorganizational element. The two elements form the precedent variables of costmanagement of SC. While trust mechanism, information sharing mechanism,incentive mechanism and income assignment mechanism provide momentum tomanage cost in SC. Cost categories of SC and its operations supports (including operation basis and securing mechanism) consists the whole theoretical frameworkof cost management in supply chains.