Supply Chain Cost Management Studies

In the 1980s of the 20th century, great changes have taken place in the internal and external environment of business operations. The formation of economic globalization leads to the fierce competition on a global scale. Scientific and technological progress and the rise of knowledge economy have made the high technology used and developed continuously in the new manufacturing environment. The pace of technological change has been greatly accelerated, meanwhile the needs of people has become increasingly diversified with technological advances and the development of the times. Technological advances and demand diversification make the ever shortening product life cycles, and enterprises are facing short delivery time, improvement of product quality, reduction of costs and improvement of service. All of these require enterprises to respond quickly to market to meet the diversified needs of customers. Under these new circumstances, the traditional "vertical integration" model which adapted to the relatively stable market environment before, highlights many drawbacks, and is replaced with the new "horizontal integration" model. This new model develops and improves further and becomes the supply chain management (SCM) , a new operating model of operation.The enormous differences between supply chain management model and traditional management model will inevitably lead to changes in cost management. Changes in cost management model relates to a series of problems, such as the concept of cost and the innovation of cost management model. This article responses to these issues, theoretically discusses the cost management orienting to the whole supply chain process and product life cycle, introduces the multi-objective decision-making methods and a compromise model considering the costs, time and the quality of the algorithm which the nodes enterprises choose, proposes the basic idea and model of the cost of supply chain management. In the last part of this article, the author explores and evaluates the specific use of supply chain management model, and points out the merits and problems needing further study of this model.As an effective management model adapted to the new competitive environment, supply chain management is gradually applied in practice management, but the study in cost management specifically orienting the whole supply chain process and product life-cycle costs is inadequate. The author believes that the study of supply chain cost management will not only in theory but also in practice promote the development of modern cost management. This article makes a number of explorations in this area and hopes to do something practical work for the supply chains cost management.