Study On The Cost Management Of DXY Company

In the market economy and in the modern enterprise system, enterprises need more effective cost management. Systematic, comprehensive, scientific and reasonable cost management system is critical of the enterprise to achieve sustainable competitive advantage and to achieve its strategic objectives. This article takes DXY Company as an example. It analyzed the main problems in cost management of traditional state-owned industrial enterprises and to develop recommendations for improvement.DXY Company is a state-owned enterprise, whose business is research, production and sales of welding materials. After the listing of the company and with the business environment changes, the traditional cost management is increasingly obvious ineffective. In order to seek survival and development, this company must further strengthen the cost management; enhance the level of cost management.At the first part of the paper, it introduces the background, purpose, content and methods of this article, and its structure. Also, and then the author introduces concepts, theories and primary literature about cost management and its practice and development. Secondly, the author provides DXY Company’s profile and the basic situation of the industry. And the author uses theories of cost management to analyses in detail the present situation of cost management of DXY Company, from costing, labor costs, material management, cost assessment, to financial budget management and so on, reveals main problems in cost management, such as ineffective cost management system, management confusion or absence and serious waste. According to the analysis, the reasons for these problems include: on the one hand, low level management, ineffective cost control, cost consciousness of the staff, low educational level and poor quality of the staff, strong randomness, resulted in many programs cannot be well implemented; on the other hand, from the cost management system, the outdated concept of cost management, the obsolete cost management methods and cost accounting, loosely organized means etc. Next besides, the measures recommended of improvement the cost management system of DXY Company is developed based the analysis above. The necessity and urgency of cost management reform, and the basic ideas and steps of cost management reform in light of the current system problems, following strategic orientation. An overall planning of the company’s cost management is put forward, from the establishment of the reasonable organizational structure, the implementation of responsibility cost management, the enhancement of the company’s R&D capabilities, to the improvement of the procurement business processes, etc. In the last part of the article is the conclusion and the outlook.