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Misunderstanding between seven LED industry to reduce the production cost

Categories: Company NewsStars: 3StarsVisit: -Release time: 2016-05-10 16:29:00
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Takeaway: China is a manufacturing power, but our country is 80% of the world's

manufacturing power LED display products, whether present or future, the subject

of "reducing cost" natural, prolongs.


OFweek semiconductor lighting webex To reduce costs is the eternal theme of

enterprises, but the problem now is very important and urgent, especially for

Chinese LED display companies into small profit era, due to the rapid growth in

the economic environment of the whole into the new normal, labor, raw materials,

energy and other factors of production is greater than the growth of enterprises

to promote the efficiency of production, make the LED display business more and

more difficult, therefore, unceasingly explores the ways of cost reduction is

undoubtedly LED display enterprises save a controlled way.


However, in the cost management, the enterprise often exist in one sector, second

guessed, too dependent on financial, not stick to quality, ignore the interests of

the supplier, the pursuit of fashionable phenomenon such as surface, it will weaken

the effect of cost reduction, and even cut costs into the erroneous zone.To the

management to benefit blindly understanding into cut costs, compress cost is likely

to be injured.

Myth 1

With a position of strength, a buyer's market for purchasing cost blindly demand,

resulting in a decline in quality of raw materials


In order to reduce the cost of raw materials, the enterprise often will call together,

many suppliers to request the price, if supplier don't promise to the requirements

of the enterprise, is immediately suspended cooperation relationship.Actually, this is

the enterprise in lower cost is easily into the erroneous zone.


In the face of such situation, many vendors have to settle for, but they will next

to this unreasonable demand their upstream suppliers, put forward in the end, the

whole industry chain in a deluge of price cuts.The entire value chain in the

enterprise, there is dependence between each link, the next link cost management

must be based on the last link of cost management, a link does not mean that

the next link cost of minimizing the total cost will be minimized, more doesn't

mean the whole value chain cost is minimized.


Some enterprises one-sided pursuit on the purchasing cost minimum, then the

purchase of raw materials and cheap quality.If only in terms of purchasing, does

the cost optimization, but because of the poor quality of raw materials in

production costs rise, the increase in the cost of Marketing Department, customer

satisfaction is reduced, summary to these questions, you will find the whole value

chain cost rising.What's more, because the purchasing price decline, resulting in

raw material appear shoddy phenomenon, cause the quality accident, resulting in

the company brand damage, is not worth the cost, the so-called "there is nothing

wrong with selling, only buy wrong."


Myth 2

Will cost advantage of unilateral thought is simply to reduce the production cost

Most managers will naturally understand the cost for the production cost, the

confined to production cost reduction activities, don't without him.In fact, in the

traditional manufacturing, production costs are only part of the total cost,

accounting for about 50-70%, and a considerable part of the costs arising from

technology research and development, marketing, customer service, and other

fields, and they are often very little attention in cost analysis.In importance to

reduce the production cost, therefore, at the same time, from the perspective of

the whole supply chain to seek ways to lower costs.Otherwise, too limited

production cost, not only the effect is not enough, sometimes too much.


Myth 3

Cut costs as the cost of every link of the whole supply chain minimum

Supply chain is around the core enterprise, through the control of information flow,

logistics, cash flow, starting from the procurement of raw materials, made of

intermediate products and final products, and finally by the sales network products

to consumers' hands, some managers think that enterprise should pursue all link

spending cost minimized.Supply chain is composed of a series of value-added

activities are interdependent a system, each link cost influence each other, and

sometimes the shift, therefore, should through the mutual coordination between

the supply chain and optimization to bring cost reduction opportunities, the pursuit

of total cost optimization.



Keywords in the article: LED display    Outdoor advertising LED display    DIE-casting aluminum   stage LED Screen   LED Module

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