| Since China joined the World Trade Organization, a lot of famous car companies come to share China market. Current market is full of challenge and competition.Chinese auto manufacturers and auto spare parts makers have two routes, moving up and increasing their position in China, or moving out into the export market and challenging some well-established brands, such as Volkswagen, Toyota, Delphi, Bosch and others. No matter which route they take, they have to undertake the risk and competition.Auto spare parts company, the typical manufacturer and the most important component of auto industry, is facing the transition from traditional volume-producing to custom-made tendency. The profit margin becomes lower and narrower because of the influence from the fierce competition of auto market. Raw material suppliers ask for price increase, while customers request price reduction. How to survive and live well? What we can do is to control product cost. Product cost includes purchasing cost, labor cost, equipment investment, profit etc. Due to the purchasing cost almost occupies the largest part in total product cost, the lowest purchasing cost becomes the contributor and key point of success.Since 1990's, supply chain management developed from logistics becomes more and more popular. It is considered as the advanced management model in 21 century. Many companies are trying to obtain competition advantage by implementing cost management in supply chain.How to transferring from piece part price control to strategy purchasing cost management? It's the issue auto parts makers are facing. This thesis will compare the traditional cost management and the advanced one based on supply chain environment. Target Costing and Activity-Based Costing will be used in the whole product implementation process which includes design, purchasing, producing and etc.Most Chinese auto spare parts makers still have a long way to go. Hope thesis can give them something useful and helpful. |
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