A Study On ASM Target Cost Management

As nonprofit scientific research institutions, military research academies and institutes have been heavily supported by state appropriation for a long time. A more attention is paid to the ratio or percentage of scientific research tasks and projects completed, while a less attention is paid to an economic efficiency. Therefore, military research academies and institutes not only have light cost consciousness, but also the cost management level is relatively backward. Moreover, since 2000, Chinese government has required the military research academies and institutes to be transferred from a scientific research mode to a scientific research-production operation mode, has required the military research academies and institutes to be transferred from institution to enterprise, and the state appropriation has decreased gradually. The transition of operational system will force the military research academies and institutes to transfer from planned economy to market economy, or to transfer from completing the scientific research projects given by the state and the governing authorities to asking the market for benefits, thus being in a race for survival. Faced with a hot marketing competition, the research academies and institutes must strengthen the cost management, and adopt the advanced management philosophy and the scientific cost management methodology to reduce the cost effectively, thus improving the capability of survival and competition.In the thesis, the theory relative to enterprise cost management is first elaborated, the status of target cost management for ASM research institute is then analyzed. The thesis pointed out the primary issues on cost management as follow. There is a light cost consciousness. The importance is attached to cost accounting, while the advance control is despised. A single control is regarded, whereas an overall control is disregarded. The potential cost is valued, but target cost is belittled. The yield of product is lower, the expenditure of cost is larger, and there is not a set of complete cost management system. Based on this, by analysis, the paper puts forward that the target cost management is the best solution to cost management of ASM research institute. The concrete measures for ASM research institute to practice a target cost management are specified. The measures include: increasing the cost consciousness of staffs further, establishing a norm management system, strengthening the cost control of procurement links, improving the design level and capability, intensifying the management of production process, setting up a fair and equitable evaluation mechanism, establishing and improving accounting system, etc.