The Application Research On Lean Cost Management In Steel Enterprises

Since the financial crisis, the steel industry has suffered unprecedented challenges. In2012, the profits of the steel industry have fallen to the bottom, and most of steel enterpriseshave a loss. The demand of the downstream enterprises decreases, and the output andproduction capacity continue to improve, which result in overcapacity in the steel industry.Besides, the change of bank credit policy and the low concentration of steel enterprises makethe steel industry under great pressure.Compared to the methods about improving the layout of the steel industry and theimplementation of restructuring mergers and acquisitions among enterprises, to improve theexisting cost management method of steel enterprises has more practical significance. Throughthe adoption of modern management methods, steel enterprises continuously improve theutilization rate of resources and do its possible to avoid the waste of resources, and eliminateno value-added activities in the production process of steel enterprises, which make steelenterprises continuously improve their management level in the fierce marketing competition.Therefore, how to improve cost management methods of steel enterprises to reduce their totalcost is the important work of steel enterprises.Therefore, in view of the present problems of the cost management which are faced insteel enterprises, according to the characteristics of the steel industry, such as many rawmaterials, the complex production process and the continuous production, applying leanthinking to cost management, a new mode of lean cost management which makes steelenterprises reduce cost continuously and keep the stronger competition advantage is putforward.The author improves the cost management mainly from the procurement as well as thesteelmaking production process. The designs mainly include:(1)Build the trust game between the supplier and the demander by the supervision of the government or steel industry association to make them keep the trust attitude in cooperation allthe time; Analysis scrap purchasing process and existing problems in purchasing managementbased on the idea of Activity-based costing, and optimize scrap purchasing process, andimplement bidding method to purchase.(2)Build the mode of production cost management based on the Activity-based level, anduse the Activity-based costing to redistribute the manufacturing cost in the steelmakingworkshop; In addition, combining lean thinking and the Activity-based cost management,identify the operation steps which impact the loading rate in the process of steelmaking, andmake the improvement of problems of steel loss specified to each post, and achieve the systemof post responsibility.Again, SG group as an example, implement the lean cost management, and evaluate orpredict the implementation effect. After the scrap purchasing process is optimized, it can makethe procurement efficiency of the enterprise increase by37.5%; The application of theActivity-based costing redistributes the manufacturing cost, and reduces each product unit cost,which improves the accuracy of cost information; Establishing the system of postresponsibility can make steel material consumption of the enterprise reduce by35.5kg/t.Finally, based on the current status of the steel industry, some measures relating to thereform of cost management are put forward, including creating lean culture atmosphere andreducing the cost of logistics and recycling waste, to realize the lean management really, andcreate more value for customers, and ultimately reduce the total cost of the enterprise.