Enlightenment of the hottest value chain value flo

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Enlightenment of value chain value flow analysis method on cost control

for a long time, people have been considering reducing costs from the perspective of the product itself in the production process of enterprises. This way now seems to have little room. Costs are generated in all links of the production process of products (or services), and are accompanied by the creation of new values and the consumption of various resources in the flow of people, logistics, information and capital. Therefore, there are more opportunities for cost control in the value stream of the value chain. Only by analyzing the value chain and value stream of the enterprise can cost control be effectively realized. This paper will discuss the problem of cost control by using the idea of value chain and value flow

I. overview of value chain value flow thought

value chain thought believes that the value-added process of enterprises can be divided into multiple value activities that are both independent and interrelated according to the relative independence of economy and technology, and these value activities form a unique value chain. Value activities are the material and technical activities that enterprises engage in. The division and composition of value activities of different enterprises are different, and the value chain is also different. For the manufacturing industry, the basic activities of the value chain include internal logistics, external logistics, marketing and services; Auxiliary activities include enterprise infrastructure (the general term of various assurance measures in enterprise operation), human resource management, technology development and procurement. Each activity includes direct value creation activities and indirect value creation activities. There are three parts of quality assurance activities. Whether an activity within an enterprise creates value depends on whether it provides what is needed for follow-up activities, reduces the cost of follow-up activities, and improves the quality of follow-up activities. The contribution of each activity to the value creation of the enterprise is different, and the contribution to the cost reduction of the enterprise is also different. The cost of each value activity is determined by various driving factors. Various links in the value chain have become an important factor in reducing the cost and final cost of a single value activity. The innovation of each link of the value chain is the source of the competitive advantage of enterprises

value stream refers to multiple groups of continuous activities from the beginning to the end of enterprise operation. These activities jointly create value for customers. Customers may be external customers or end users within the value stream. For example, order receipt is one of the activities that constitute the value stream of order fulfillment from the beginning to the fulfillment of the order

the value chain involves the whole enterprise. The calculation of cost and price difference is the basis of the value chain as a competitive comparison. The business requirements of enterprises promote the development of the value chain; Value flow involves a series of activities to meet specific types of customers (internal or external). Providing specific work activities for specific types of customers or users is the basis for the development of value flow

second, the cost control method based on the value flow activities of the value chain

the first step of the cost control method based on the value flow activities of the value chain is to describe the value chain of the enterprise and determine which specific value activities constitute the value chain. After determining the value chain of the enterprise, through value chain analysis, we can find out the proportion and growth trend of each value activity in the total cost, as well as the new growth point of creating profits, identify the main components of the cost and those value activities that account for a small proportion and grow faster, and may eventually change the cost structure. 1. The viscosity of buffer oil is too large or the oil quality is too dirty. List the cost drivers of each value activity and their relationships. At the same time, through the analysis of the value chain, determine the relationship between the value activities, and look for information, opportunities and methods to reduce the cost of value activities in the value chain system. According to the statistics of American enterprises, logistics costs in the value chain account for about 21% of sales. Through the management of logistics in the value chain, costs can be saved; Reliable procurement quality control can also reduce the quality inspection cost of subsequent value activities; The management of these problem sources can improve the efficiency of various value activities, especially in the new project planning stage, which can give full play to the role of cost saving and quality assurance. Then take each value activity as the center, describe its specific value flow process, and establish a cost control system based on value flow inside the packaging belt with unique colors and sizes that can be customized for value activities, so as to monitor and feedback the cost in real time. Through value chain analysis, we can get the overall situation of the value chain and the connection between rings, and then use value flow to analyze the situation of each link. This kind of cost analysis based on value activities is an effective way to control costs, which can provide information for improving costs. Try the value flow chart of purchasing activities

for procurement activities, procurement value can be said to be a competition based on time and quality. The standard of customer satisfaction is to supply in time at the lowest cost to meet its requirements. For the links that cannot add value in the value stream, we should save costs by reducing waste, including the waste of time, manpower and material resources. What really creates the value of purchasing activities is the selection of suppliers and receipt and warehousing. Therefore, one of the focus issues of controlling procurement costs is source management, that is, developing new and reliable suppliers; The second is supply management and material management system. The management of these important links should be reflected in daily procurement activities, rather than starting this step after the procurement plan is finalized. The relationship with suppliers is the core of procurement, which is mainly reflected in supplier database, supplier development and evaluation, negotiation strategy and ability, procurement technology different from suppliers, cooperation with suppliers and mutual participation in joint development. This part should be the focus of procurement activities. The material management system should solve the problems such as the relationship between economic inventory and order lead time, the reasonable layout of warehouses, and the reasonable placement and storage of items, so as to provide accurate data information needed to improve the quality and efficiency of procurement activities. The purchasing department should describe the actual value stream during each procurement activity, record the total cost of the whole value stream and the distribution of cost changes, find out the reasons for the changes, and put forward improvement suggestions. From the above analysis, we can scientifically obtain the root causes of procurement costs and find out the cost control plan. In this process, information system database, information transmission and sharing, and the quality of personnel engaged in value activities can provide opportunities for cost savings. Similarly, other value activities can be analyzed according to their own actual business, and finally the actual cost information of the whole value chain can be obtained

III. The role of value chain value flow analysis method in cost control

through the comprehensive analysis of the cost of value chain value flow activities, managers can understand the cost status and corresponding competitive advantages of enterprises from the macro and micro levels for specific products or services. And make decisions on this basis. Compared with financial accounting, the cost data based on value activity analysis represents the actual cost of products or services, which can provide a reasonable estimate of the actual cost, and thus make decisions on profitability

in order to provide useful data based on value activities, it is necessary to analyze financial data according to the new calculation basis (value flow). Some systems are easy to adapt to this cost control scheme, but many systems need some estimation and judgment. Determining value activities and their value streams can fully understand the relationship between activities and costs, as well as the relationship between activities and products, provide valuable information, and expose some potential problems of the enterprise through analysis. Provide cost and benefit measurement for all value activities, and help reduce, enhance or cancel some value activities by improving efficiency. This cost control method is more conducive to management and strategic decision-making than the traditional aluminum door and window products compared with other industrial extruded products

the value flow analysis method of value chain provides a research idea for cost control. At present, it is still limited by many aspects in the implementation process, mainly the difficulty in data collection, because the foundation of the current accounting system is not based on the idea of value chain activities and processes, and it can not provide it with the required data. However, with the development of information technology and fierce competition, enterprises will study cost control at the micro level, and study the cost drivers of value flow and value chain activities, which can provide conditions for the establishment of more complex accounting systems. (end)

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