"1990 is not better than the Chrysler, auto industry from Japan and Europe, the U.S. competition continued to exploit the profits of the three major car manufacturers. Chrysler despite efforts to catch up with competitors on product quality, market but not to respond. At the same time, competitors also continued to add new product features and technology. Chrysler's cash flow in reduced profits in the fall, once as low as 10 per share price dollars. face a very grim situation, how to turn over Chrysler? "This is the Shanghai National Accounting Institute, Professor tube Yimin," Zhengzhou Yutong Group Co., Ltd. Senior Financial Officer Training Course "teaching beginning questions, Professor tube, a key measure is the introduction of target cost management, and applied to the whole process of product development. Cost-effective control of target cost management best proof is: Chrysler's stock price from 10 dollars per share in 1990 up to 54 U.S. dollars per share in 1995. Revenue grew 70%, car and truck market share has increased by 2.1 percentage points. More importantly, Chrysler's profit and cash flow increased by almost 400%. But not all, target cost management also helped Chrysler achieve organizational transformation, through the following series of measures to establish a new corporate culture.
Target cost management is the goal of the unity of management and cost management of a modern cost management practices. Target cost management of the process is set around the target cost, decomposition, implementation, analysis and assessment, to fully mobilize the initiative of various aspects and positive nature of the enterprise's various departments until all workers are in part guaranteed by coordination of Ti Xi, the cost for the complete enterprise objective process of communication. Target cost management originated in the United States. Was introduced to Japan, Western Europe and other places, and has been widely used. Eighties of last century, target cost management into our country, first by mechanical expansion of industrial enterprises in the target cost management of the connotation and extension, the whole process of target cost management; to the nineties of last century, formed a representative of the experience of Handan Iron and Steel with Chinese characteristics, the target cost management. In today's highly competitive market environment, the demands of enterprises from production-oriented cost management Zhuanxiang market orientation; required target cost shift from the short-term business strategic decision making; required areas of cost management, including market forecasts and research, product planning, design development, manufacturing, material procurement, product sales and after-sales service and other sectors.
Chrysler's case shows us the good use of target cost management through lower costs, improve quality and shorten time to market to gain a competitive advantage for the company. Past two decades, both domestic and foreign, corporate production environment in which profound changes have taken place, the change on a higher cost management requirements. Target cost management is to adapt to the requirements of the formation of a modern cost management practices. After years of practice, as the economic system reform, the company's own emphasis on the costs and economic benefits, as well as computerized accounting in the popularity of China's enterprises, cost management for the promotion of our objectives to provide more convenient.