ZJ Research On Cost Control Of Group Material Inventory

Since the economic crisis in 2008,the global economy has been in a downturn,the nonferrous metal prices have fallen sharply,while the domestic production materials and labor costs have been rising.The profits of ZJ group,based on the exploration and mining of gold,copper,zinc and other mineral resources,has declined too for the increasing inventory and the cost.How to maintain its competitive edge in nonferrous industry for ZJ?One of the most effective way is to reduce production costs of the whole enterprise,and the material inventory cost is one of the important content.Especially in the smelting enterprises,material costs account for a large proportion.Therefore,how to control the cost of inventory material is an important issue to reduce the cost of production.Based on the detailed study of the current material inventory cost control tactic in ZJ Group,the paper analyzes the reason for the high cost:including Low inventory turnover,high procurement cost,high idle inventory,improper workshop inventory management,but the main reason is that there is no a scientific supply chain management system to manage inventory.According to the actual situations and data analysis,the paper using the EOQ economic batch model,ABC inventory classification and VMI method to put forward the material cost control strategy :(1)Adopt centralized purchasing mode to reduce the inventory purchase cost;(2)Based on ABC classification to control inventory cost and batch order.(3)Improve the inventory turnover rate to reduce the cost of capital occupation;(4)Make full use of idle inventory to reduce inventory cost.(5)Strengthen the inventory management of production to reduce the inventory cost.Through above five aspects can further control the material inventory cost?The research results of this paper will be put into practice in the field of material cost control of ZJ group,at the same time,it will provide a useful reference for the material cost control of the nonferrous industry,and will enrich the case study of material cost control in the non-ferrous industry.