The Research On Logistics Cost Of ABC Auto Parts Company

With increasing competition in the domestic auto industry and market shrinks in recent years,demand for cars is more personalized and diversified,Chinese automotive OEMs turn from traditionally expand capacity to improve research and development technology and meet the individual needs.Due to labor costs and raw material costs etc have been on the rise,in order to survive in the fierce competition,automotive OEMs transfer part of the cost through purchase prices to auto parts companies.Auto parts companies only further reduce all kinds of costs in order to remain invincible in the competition.The reduction rooms for current purchase costs of raw material are getting smaller and smaller,the domestic auto parts companies have to move more to the logistics and production field to lower the logistics and manufacturing costs.Especially in the logistics field,the upstream suppliers,their own manufacturing and downstream customers for the entire supply chain collaborative management,is the main direction for cost reduction of the current auto parts company.The article aims to study logistics cost control and finds ways to optimize the logistics cost.Based on the case study of ABC auto parts company for logistics cost management,the article makes analysis of current status and defects,using activity based costing method combined with target cost management for accounting and improvement,as well as milkrun and vendor management inventory for control to achieve certain results.Main performance is as follows: Logistics cost constitute of company is accurately divided and each activity’s logistics cost is calculated using activity based costing method to find value-added and non-value-added activity of the company and have target to reduce non-value-added activity;Theory model of milkrun and vendor management inventory is used for optimization of vehicles’ loading rate,upgrade of raw materials’ collecting efficiency and reduction of logistics cost;Through analysis of finding company’s save space,target cost is set to control logistics cost completion of the company.ABC company has achieved good result in the application of activity based costing management and methods for logistics cost control.The article expects that these methods could be extended to more businesses,making auto parts enterprises improve in the supply,production and sales logistics management,consolidate and expand the industry’s profit margin.