In the electrical business development strategy, cost control is an extremely important position. If the performance of similar products, the quality is almost the same, to the product in the market competition is a major factor in the price, and decided to price the main factor is the level of costs, because only reduce costs, be possible to reduce product prices. Cost management control objectives must first control the whole process, not only to control production costs, but should control the product life-cycle cost in its entirety.

Practice has proved that only when the product life cycle cost effective control, cost will be significantly reduced; but from the perspective of society as a whole, only so that it can really save social resources. In addition, electrical enterprises in cost control also must be balanced product innovation, in particular, to ensure and improve product quality, must not be one-sided neglect in order to reduce the cost of product variety and quality, but can not order one-sided pursuit of immediate interests, to take cut corners, counterfeit or shoddy replacement to reduce costs such as dishonest; Otherwise, the result will not only harm consumers, electric companies will eventually lose credibility, or even bankruptcy.

(A) the cost drivers are not limited to the number of products

To control costs, we must first understand why costs occur, it is and what factors, the relationship between the direct costs (direct materials and direct labor), the cost driver is the product of production, according to production in this part of the distribution is There is no doubt. How to effectively control costs, so that the electrical company's use of resources to achieve maximum benefits, you should start from the job, trying to increase the effective operations, improve efficiency and effective operation, while minimizing that eliminate invalid jobs, which is the modern method of cost control The fundamental idea, around which other concepts are carried out and, therefore, this foothold.

(B) the cost has become more broad meaning

The meaning of the traditional product cost generally refers only to the product manufacturing cost, which includes the product of direct materials, direct labor costs and manufacturing costs should be assessed, and the other into the cost of management fees and marketing costs, all as a period cost , as nothing to do with the product. Therefore, the broad concept of costs, both products of the manufacturing costs (middle), including product development and design costs (upstream), but also including cost, maintenance cost and disposal cost (downstream) of a series of product-related All electrical enterprise resource-consuming. Accordingly, for cost control, we must control the three aspects of what happened all the costs.

(C) the cost savings to the cost avoidance

Traditional cost reduction is basically achieved through cost savings, that seeks not to waste resources at the job site and improving the working methods in order to save costs to be incurred costs, the main methods to save energy, prevent accidents, tender procurement of raw materials or equipment, electrical business is a tactical improvements are a primary form of lower costs. Advanced form of cost reduction requires electrical companies in product development, design phase, through the restructuring of production processes, to avoid unnecessary production processes to achieve the purpose of cost control is a high-level strategic change.

(D) time as an important competitive factor

Various stages in the value chain, time is a very important factor. Many of the technology industry, the pace of change has accelerated, product life cycles become very short. Electric companies can product in a timely manner to the hands of customers is the first step, more importantly, the views of the customer to take timely measures to maximize customer value. This is to get the market, they can keep abreast of market developments.