Strategies For Cost Control In Project Of Automotive Engine Oil Cooler For M Company

With the continuous development of the market economy and the increasing competition in the automotive industry,continually falling price of autos is bound to have an influence on numerous supplier chain enterprises,like auto parts manufacturing companies.In order to maintain the original profits and keep a competitive position in the market,auto parts manufacturing companies must pay attention to their cost during the project development process,and shall control the cost in an effective way.Project cost control has become one of the most important management tools for the survival and development of auto parts manufacturing companies.Project cost control is a kind of management work in the project development process,which tries to keep the actual project cost in the project budget.For manufacturing companies,the development of new projects means that the development of new business,which plays a vital role in the development of the companies.Cost control is an important part of project cost control.Effective cost control not only has a great help for the development of the project,but also is beneficial for the companies to use resources in a rational way to do manufacturing and managing activities.Based on the theory of project cost management,the paper summarizes the history of cost control and project cost control.Then,briefly introduces the project development process in M company,an auto parts manufacturer,analyzes the components of project cost,digs out the of the existing problems in project start phase,carry-out phase,afterwards phase,and proposing solutions to these problems.At the same time,the paper combines theory and practices,and introduces the cost control methods,putting forward Target Costing Method and Earned Value Method.The process of Target Costing Method is determining the target sales revenue,determining the target profit,proposing initial target cost and finalizing the target cost according to the market demand and the competition level.By setting up the cross-department team,the target cost will be put into practice,which aims to control the cost and reduce the cost.Earned Value Method is one of the most commonly used methods for project managers.It can be used to manage the scope,schedule and cost of the project,and use the deviation to verify the project cost and schedule,and has feedback in an effective way.In the paper,Target Costing Method and Earned Value Method are applied to all stages for M company's project.Target Costing Method is used to set the target stage for the development of the project.The combination of Target Cost Method and Earned Value Method is applied to all phases during the development of the project,and is carried out to monitor and evaluate the performance.This paper will focus on the cost control of the project throughout the project life cycle.The purpose is to provide optimize solutions to the system and the management process.Through the development and continuous improvement of process,M company will be able to provide customer products in good quality and competitive price,and to achieve the sustainable development in the long term.