The Case Research Of Shanghai Electric Pg Lingang Factory For Cost Control Management

The domestic power station equipment manufacturing industry possesses more than 50 years development history; and the domestic factories stand on almost identical level in technical field with the international competitors. In the present market circumstance, capability in cost control is especially important, the one who could take the lead in reducing costs, who will occupy the vantage point in the market. Therefore, the study on the company's cost control management will provide profound and the widespread reference and profits from the significance in leading the domestic power station equipment manufacturing industry how to win in competition with the international well-known brands and how to establish their own competitive advantages.The first chapter of this article mainly introduces the writing background, significance and purpose of cost management study of Shanghai Electric Power Generation Equipment Lingang Factory, as well as the main study contents, problems to be solved and research methods. The second chapter retrospects to the newest domestic and overseas research results regarding cost control management. The overseas cost control management is transforming from daily operation management to strategic management, from production-oriented to market-oriented, from production cost control to product lifecycle control and from cost saving to cost avoiding. The success of Handan Steel and Bao Steel in cost control management is quoted for domestic section. These advanced research results provide great instructions to the factory's cost control management. The third chapter first introduces the background of Shanghai Electric Power Generation Equipment Lingang Factory. In the factory's cost control management program, the cost collection flow and cost centers were established based on the experience of Siemens Muelheim Factory, and the value chain managerial concept was introduced to set up the Lean Cost Control system. Instead of defining cost centers to work sections in Siemens Muelheim Factory, Lingang Factory divides cost centers to individual operators or machine tools, which is more detailed, finer and more innovative. The fourth chapter gives analysis on staff cost management, department cost management and cost center management aiming at the innovative pattern in cost control of Lingang Factory. The fifth chapter analyzed the factory efficiency and also efficiency before and after the improvement of cost centers; the comparison shows the factory could be profitable three years earlier than homogeneous enterprises in the industry. At last, the article makes a summary to the factory's cost control management system. In the future the factory will keep innovation in all aspects such as lean procurement, lean design, lean logistic and lean technical service to further control costs in order to create greater values to customers.