Research On Cost Management Of YJ Company Based On Value Chain Analysis

In the era of information and knowledge economy,the relationship between enterprises in a value chain is getting closer and closer.Business communication between enterprises and the speed of information dissemination is more and more synchronous.The way of information communication has also broken through various limitations.In recent years,with the development of modern enterprise management theory which brought a lot of inspiration to the theory of cost management.As one of those modern enterprise management theory,the value chain theory is widely used in the enterprise competition analysis.The research of cost management based on the value chain Analysis is a meaningful exploration and application in the field of cost management.The author firstly reviews and summarizes the relevant theories of value chain analysis and cost management.It provides the theoretical foundation for value chain analysis based cost management.Then,by studying the case of YJ's cost management in the context of rapid revenue growth and fast information renovation,we dig out the current problems encountered by YJ Company such as transportation costs increase,inventory levels incline,material utilization and overall capacity utilization drop.The author analyzes the main causes of the problem revealing that YJ's cost management still focuses on the internal activities within organization which is the typical limitations of traditional cost management conception.Therefore,the author applies the value chain analysis tool to develop the cost improvement proposal and points out the implementation strategy and the potential issues that should be avoided during the process of implementation.We expect to help the case company solve the cost management problems mentioned before.After the research,the author conclude that the cost management based on value chain analysis firstly requires an in-depth analysis of the enterprise value chain so that it can facilitate company to view the full picture of the industry as well as value-added activities.Furthermore,by working out cost management plan based on the value chain analysis results to optimize the YJ Company's internal operations and external collaborations and other value-added activities.The article formulated several cost management tactics to optimize value added activities derived from the industry value chain analysis,the manufacturing capacity management mechanism and integrated logistics solution analyzed from the horizontal value chain as well as developed the integrated information control system which is the reflection from the vertical value chain analysis.Expect not only to help YJ company solve the practical cost management issues but also to provide references for relevant companies who plan to use value chain analysis based cost management methodology to develop cost management strategies.