Cost Control in Production | Key points of Cost control – The potential for cost reduction has not been fully realised and identifies issues such as inadequate cost indicators, lack of a comprehensive cost management system.
According to the reality of multi-line length and wide coverage of power production points, formulate targeted implementation measures. Such as improving the comprehensive utilization of equipment, optimizing process operations, grasping daily forecasting, daily analysis, daily control, improving the efficiency of capital use, repairing old and recycling.
The cost potential has not been fully released.
Since its opening, according to the annual strategic goals determined by the company. The finance department has divided the capital plan projects into departmental expense items and centralized management projects. Formulated the fund use plan of each department month by month. And conducted “cost optimization talks” within the finance department. Other activities, enhance the cost control awareness of financial personnel. But the potential of management has not been fully released.
The cost indicators do not meet the best refinement standards.
Enterprise cost is a comprehensive quantitative index system. Only abstract but not specific is difficult to implement, only qualitative but not quantitative is difficult to assess, only extensive and not detailed is difficult to reach people, will inevitably lead to cost reduction in form, go through the scene. See the scene vigorously, see the result of nothing.
Cost management has not formed a system.
The Cost involves all levels, links and positions of enterprise management, is a systematic project, must think systematically, make overall arrangements, to prevent the phenomenon of “pressing the reed to get up the scoop”, the cost of one link and one process has come down, and the cost of another process has risen again.
The cost responsibility has not been implemented to people.
Reducing costs requires that each employee must have a clear cost responsibility area, cost indicators and cost targets to be assessed, so that the indicators and responsibilities are fully assigned to the post, so as to motivate employees to actively implement, adjust and control costs in the cost responsibility area.
Second, prescribe the right medicine and form an efficient and orderly benign control system.
In view of the above diseases, the company can implement the cost control method, take cost-effectiveness as the center, focus on post responsibility, and determine the cost responsible person for each process, each level, each link and each position in accordance with the principle that there is only one responsible person for cost, so that the cost control work has responsible persons everywhere, whether it is managers, supervisors and front-line operation employees, there are clear cost responsibility areas, cost indicators and assessment objectives.
In this way, employees are encouraged to actively implement cost control measures in the responsibility area according to the overall goal of responsibility cost, so as to eliminate the “dead end” and “blind spot” of cost control and improve cost management performance.
The first is to carry out in-depth discussions.
Through in-depth discussions, all employees consciously assume the responsibility of “reducing costs is increasing benefits”, and infiltrate cost control into all aspects of work, which is closely related to the interests of every employee.
The second is to determine revenue and expenditure targets.
According to the index plan issued by the company, on the basis of systematically analyzing the company’s internal and external conditions and capital increase and profit reduction factors, and scientifically predicting the production and operation results, the responsibility cost and profit indicators are determined, and a responsibility index system is formed, such as cost and expense indicators including water costs, electricity costs, material costs, office costs, etc.
The third is to decompose the responsibility of indicators.
According to the principle of horizontal and vertical decomposition. Determine the index responsibility of each department, team and each employee, so that everyone has responsibility on their shoulders and indicators on each head, forming a responsibility network that is decomposed and implemented layer by layer from top to bottom, and responsible and guaranteed from bottom to superior. So that the overall efficiency of cost control of all employees can reach the best state.
Formulate effective measures.
Cost Control in production, according to the reality of multi-line length and wide coverage of power production points, formulate targeted implementation measures. Such as improving the comprehensive utilization of equipment, optimizing process operations, grasping daily forecasting, daily analysis, daily control, improving the efficiency of capital use, repairing old and recycling, etc.
Strengthen key research.
For the key indicators, and key indicators related to all cost-effectiveness.
Establish a system optimization Leading group :
Indicator research group with the participation of the company’s president team leader, vice president, deputy team leader of each department manager, and relevant personnel.
Such as financial cost efficiency group, production safety research team, etc., designate key research personnel, clarify measures and responsibilities, and carry out systematic research.
A dynamic virtuous circle.
Conscientiously implement prior control (establish planned indicators and clarify key measures). And in-event control (timely discover problems and deviations during the implementation process and carry out rectification). Focus the work on process control, and avoid the remedy of “making up for it too late”.