Significance
We know that cost is a comprehensive indicator of economic indicators, in order to take appropriate measures to keep costs down, it must by leading enterprises to do so, otherwise, any description of measures to reduce the cost of the program can not be carried through. Increase in corporate profits in a variety of measures to reduce the cost should be one of the most effective approaches. There are a number of enterprises as a result of better cost-effectiveness; there is no awareness of the importance of the cost that the present has good effectiveness, reduce costs rather than a large room, which did not take appropriate measures to reduce the cost of the initiative. However, to reduce costs is a long-term work, it also reflected the effect of a long-term process, not one or two days can be achieved. Good economic returns if not study the issue of cost reduction, decline in the effectiveness of taking measures, will allow businesses very passive, but can not be achieved in a short period of time significant results. At the same time, the scope for reducing costs is very broad and can not be done.
Cost index is a comprehensive indicator of business it needs the efforts of various departments in order to complete the task. If only one or a few departments, it is difficult to achieve the objectives. This requires the cost of site management to consider integration, all departments should be responsible for the cost of the goal, we must consider the cost. If the enterprises in all sectors to achieve this, then the effect will reduce costs significantly. Reduce the effect of increased costs, the interests of various departments to take care of the more mobilized the enthusiasm, the next step will be to reduce the cost of the measures we recognized, and actively do it.
Cost index is a variety of indicators, one of the most important indicators. In terms of cost management, should reduce costs as an important content. If the results of the cost of management is not cost effective to lower the cost of management can not be said that the work results. Therefore, in terms of cost management continue to reduce costs, strengthen enterprise strategic cost management, cost management to improve the level and the economic efficiency of enterprises, etc. are a very important role, and its concrete manifestation in the following areas:
1. To reduce product cost can improve the economic efficiency of enterprises and increase profits.
Product cost is offset by an important factor in profits, product costs are high, a corresponding reduction in profits; and product costs low, while the corresponding increase in profits. Increase corporate profits, we can provide more accumulation. At the same time, reduce costs and improve the economic efficiency of enterprises, but also for businesses, investors and other interested parties and business groups brought about by better earnings. As a result of reduced costs through the sale of investment products to recover the cost of funds, so that production can continue normally, but also because of the accumulation can be used to expand production enterprises, the size of the business can also be followed expansion, which can form a virtuous circle. In addition, is involved in the new areas of business, but also a lower cost. As a result of new areas of intervention have a higher income level, higher profits, so that people often overlook the importance of cost reduction that the profit is high and the cost no high points. Should think that this is also left for future cost reduction potential problems. Because the high profits will not last long, and in the future to increase profits in this industry, but also by reducing costs to complete. Question and then take corresponding measures at this time, due to the high cost has been formed, and then down the difficulty is great. Therefore, a new enterprise in the field of intervention, we should first of all, the cost will reduce or control the level of the first place, if there is a new starting point for a better, it will reduce costs for the future to create a good condition.
2. To reduce product cost can save manpower and resources consumption
Reduce costs through the implementation of the measures can be the least human and material resources to produce more products. Especially for some of the more expensive or scarce materials, the economical use of these materials not only reduce costs, but savings of resources, can guarantee the normal production to prevent a shortage of materials due to the impact of production occurred.
Enterprises to develop the program of measures to reduce costs in general are some of the original modification consumption, the consumption of a new scale, in this way to reduce the production of materials, resources and human waste.
3. To reduce product cost is an important condition for debasing the price
We know that the product cost is to develop an important basis for product prices. To continue to lower product prices, increase product sales, improve market competitiveness, it should continue to lower product cost. Only reduces the product cost, lower product prices have a guarantee.
In market economy conditions, as a result of intense competition, and sometimes between enterprises in order to make their own position, the competition generally means lower prices. Price war in order to win, only by reducing the cost price for the larger space. If the cost of business higher cost than other similar products the price of enterprises will be in the final price war defeated.
