There are 7 misunderstandings in reducing production cost in LED industry

Cost reduction is the eternal theme of enterprise management, but the problem now is very important and urgent, especially for the LED display Chinese entered the era of meager profit enterprises, due to rapid growth of the new normal in the overall economic environment, labor, raw materials, energy and other factors of production increase is greater than the enterprise production efficiency improvement, LED the display business is more and more difficult, therefore, continue to explore the way to reduce cost is undoubtedly a controllable LED display corporate self-help. However, lower in cost management, the enterprise often exist, over reliance on financial care for this and lose that retroactive, and not to stick to the quality, ignore the interests, the pursuit of fashionable surface phenomenon, it will weaken the cost reduction effect, and reduce the cost into error. The management should be understood as cost-effective cut costs, compression costs, it is likely to hurt enterprises. By a misunderstanding of the buyer's market dominant position, the cost of purchasing blindly to keep the prices down, resulting in the quality decline of raw materials in order to reduce the cost of raw materials, enterprises tend to be many suppliers together, raised the price at its request, if the supplier does not promise to enterprise, then immediately suspend cooperation. In fact, this is the enterprise in the cost reduction is easy to fall into the misunderstanding. In the face of this situation, many suppliers have to settle down, but they will be the next step is to put forward unreasonable demands, their upstream suppliers finally appeared overwhelming the whole industry chain price sound. In the whole value chain, each link between are interdependent, the next part of the cost management must be established on the basis of cost management on the part of the cost minimization of a link does not mean that the next part of the cost will be minimized, but do not mean that the entire value chain cost minimized. Some enterprises in one-sided pursuit of the procurement cost minimum, then the purchase of cheap raw material quality. If only the purchase link, do cost optimization, but because of the poor quality of raw materials resulting in production costs, increase the cost of the sales department, customer satisfaction will be reduced, a summary of these issues, you will find the entire value chain cost increases. What is more, because the purchase prices, raw materials may appear shoddy phenomenon, cause quality accident, resulting in damage to the brand company, is the so-called "The loss outweighs the gain., nothing wrong with selling, only buy the wrong." Will mistake two cost advantage is one-sided that simply reducing the production cost most managers will naturally understand the cost for the production cost, the cost reduction is limited to the production process, there was no gu. In fact, in the traditional manufacturing industry, the production cost is only a fraction of the total cost, about 50 - 70%, and a large part of the cost in technology research and development, marketing, customer service and other fields, and they are often at the cost of analysis has received little attention. Therefore, in order to reduce production costs, we should look for ways to reduce costs from the perspective of the whole supply chain. Otherwise, the cost of production is too limited, not only has not demonstrated, sometimes things. Misunderstanding three will reduce the cost for each link of the whole supply chain cost was the lowest supply chain around the core enterprise, through the control of the information flow, logistics, capital flow, starting from the procurement of raw materials, intermediate products and final products are made, and finally by the sales network products to consumers, some management that enterprises should seek to minimize the cost of all aspects of expenditure. The supply chain is a system composed of a series of interdependent enterprise value activities, the link between the cost of mutual influence, sometimes even shift, therefore, should be coordinated and optimized between through the supply chain cost cuts the opportunity to pursue the total cost optimization. Misunderstanding four will reduce the cost for cutting mechanism, make snap reduce manpower, reduce welfare, and as a sign of reform bold Chinese enterprise management is usually relatively extensive, resource use efficiency is low, therefore, to strengthen the cost management for enterprise profit is essential. However, the essence of cost reduction is to increase the input output ratio measured in monetary terms, rather than simply increasing the input output coefficient, nor is it simply squeezing costs. But unfortunately, many enterprise cost management has gone into the wrong zone, especially in human cost management, but also want to run faster, and want to eat less horses, this is possible? The result is only reverse elimination, bad money drives out good money and becomes the base for talent training. What is the appropriate cost a little economic sense people should know: pay a fee paid higher lower cost, pay the fee if not return, is a waste. Employing cost is not to judge the cost size from the level of the salary paid by the enterprise, but to judge the value of the contribution made by the employee for the enterprise. Misunderstanding five neglected product development, technology research and design on product cost is an important factor for the product design often pay attention to the influence on market competition, consumer demand, production capacity and raw material costs, once finished setting, 60% of its cost will be locked, concrete operation only by improving efficiency and the ratio of input to output to reduce the cost and effect