| China Erzhong Group(Deyang)Heavy Industry Co.,Ltd.(hereafter refer to Erzhong Heavy Industry or the company) was established in Sept.,2007,it is limited liability company which comes from China Second Heavy machinery plant built in 1958 by restructuring and reorganization. The company was listed at Shanghai Stock Exchange on the date of Feb.02,2010(Security code 601268).The main business of the company covers design manufacture and sales for the significant technology equipments in the field of metallurgical, power, petrochemical industry as well as the products made of heavy steel castings and forgings, the company belongs to the industry of heavy machine manufacture.Since the company was established, the cost management system was improved successively along with the change of the enterprise system, it basically meets the need of the production management and promotes the quickly develop of the company, the company has realized leap forward development, the main economic and technical index increased at the speed of the average 50% per year, the total assets added from 2.7 billion of the year 2001 to 17.7 billion of the year 2009.The new prospects have been open up in technology improvement and product structure adjustment.International financial crisis started from subprime loan crisis in the United States had severely affected the smooth development of the world economic; as a result, the growth of domestic economy became slow, the conflicts of over-capacity in metallurgical industry became standing out, the competition within industry became intensified. The company faced pressure for the further develop. Under the situation of the decreased order for the metallurgical equipments, the company lost the order because the offer was much higher than the target, it was revealed that the cost management of the company existed deficiency, the cost information supplied to the management was not accurate enough so that there was not sufficient basis when the price was decided, this situation was not suitable for the rapid competition requirement. The cost management was not breaking through the limitation of the traditional cost management which lacked the idea of the market, it must be reformed.ERP--Enterprise Resource Planning is based on the information technology. It offers the management level and also the employee a platform to make decisions by a systematic management. ERP combines the information technology and advanced management ideas, it becomes the operation mode of the modern enterprise. ERP reflects the requirement that the resources of the enterprises shall be allocated reasonably to create the wealth of the society to the maximum. ERP has been the foundation stone for the survival and development of the enterprise in the information Era.According to the reality that the traditional cost management system couldn’t be suitable for the economy development requirement when the Chinese marketing economy system was established, in 1985 professor Lin Wanxiang raised the idea of building up the modern cost management system by using "systematic theory" to realize the optimization of the cost management and improvement of the economic benefit.In this paper the writer reviewed the process of the start and development of ERP, the management thoughts and the challenge that the enterprise faced in the field of using ERP. The writer also reviewed the building theory of the cost management system and the newest research achievement of the specialists and scholars. The writer introduced the environment of ERP system in Erzhong Heavy Industry, analyzed the competition situation of the company, the advantage and disadvantage of the ERP and necessity of building up the cost management system under the ERP environment, the writer also raised the constitution plan and execution method in detail.In this paper the writer chose the subsidiary unit named Heavy machine plant as the application unit of the cost management system under ERP.Finally the writer makes a conclusion for the research and expects the future. |
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