Study on Manufacturing ERP Cost Control System Based on Value Chain

With the economic globalization and the advance of modern science and technology, it is urgent for the cost control system in a manufacturing company to extend the traditional idea of space and time. The company should focus on not only the increase on mess of cottage, but the increase on its core competition so as to establish grasp competitive advantage. The company should consider the operation and development in both its own production and value chain of the whole industry from upstream supplier to downstream customer. Moreover, the value chain should be optimized continuously. The manufacturing company should integrate cost control system to ERP information system, in order to analyze and conduct data and control the cost timely.This paper introduces value chain into the study on manufacturing cost control system based on ERP., which extends the concept of time and spatial dimension. The research eliminates the shortcoming of the existing cost control and improves manufacturing cost control from both strategic level and tactical level. On the basis of value chain and its management, ERP core management thought, activity-based costing management and modern strategic management, this paper constructs the theoretical frame of manufacturing ERP cost control based on value chain firstly. Under the guidance of the theoretical frame, the integration of activity-based control, ERP and value chain is analyzed. The process and characteristics of the existing manufacturing cost control are analyzed as well. After that the paper probes into the overall framework and core idea of the new cost control system based on value chain. Then this paper details the six modules and four plans in ERP data base of the system, clarifying manufacturing ERP cost accounting scheme based on value chain. Next the paper discusses the application on the new manufacturing ERP cost control system based on value chain, combining with the background material of Tianjin DaZhan Valve Group Company Limited. So it provides some guidance of the practice application and promotion of the system in enterprises. Finally, the paper makes a summary of the research results and limitations and puts forward the direction of further research.