The Optimization Of Product Life Cycle Cost Management In B Company

With the sales volume of automotive increased year by year,price competition becomes server in the domestic car maker.In order to grab more market share,the battlefield was changed from first-tier cities to small cities and villages.Not only Joint venture brands,but also local brands have to use lower cost and higher quality products to win the competition.The request will undoubtedly transfer to the automotive enterprises.How to arrange the market research,product development,supply chain management,efficient production and customer service to ensure the achievement of the cost target during new product development becomes the key to win the market.The basic principle of product cost management is to find the most efficient way to allocate and utilize the resource and expense.It is difficult to achieve the goal of cost or to meet the external price reduction by only simply reducing the activities.Cost target management has running several years,which is easily to ignore the complexity and dependency of the cost.How to manage the cost with an efficient way to help company make right decision is a new requirement for product cost management process.Product life cycle cost management is an extension of strategy management,which looking for all activities in all periods of a product.It collects,calculates and analyses the cost of the product,to support company decision making and to realize maximum profit.It is very easy to ignore the product cost forecast in traditional product cost management,and the correct forecast must be with consideration of risk.Thus,I add risk management into cost management,summary the risk factors in all periods of product life time,and describe the method of how to use risk management tool.Finally,according to the experience from the other enterprises or the actual situation of B Company,it is defined a product life cycle cost management system which could help optimization of the product cost management in B company.The research result will provide reference for the similar automotive enterprises.