[Abstract] This paper briefly discusses that enterprises should first establish a perfect procurement system to control procurement costs, and then introduces in detail the means and methods to control procurement costs, such as centralized procurement, joint procurement, third-party procurement, global procurement, improving product added value and strategic procurement, etc. In addition, it is necessary to strengthen the training and evaluation of procurement personnel. [Keywords:] procurement and procurement costs, buyers control supply prices, reduce centralized procurement, joint procurement, third-party procurement strategy, procurement training, and control of procurement costs are very important for an enterprise's operating performance. The decrease of purchasing cost is not only reflected in the decrease of cash outflow, but also directly reflected in the decrease of product cost, the increase of profit and the enhancement of enterprise competitiveness. Because the material cost accounts for 2-3% of the production cost, and the high cost reaches about 5%, it is one of the important and direct means for an enterprise to continuously reduce the product cost and increase the profit by controlling the procurement cost. In the past few years, the author's enterprise has strengthened the management and control of procurement cost, improved the procurement management system, and reduced the overall procurement cost by more than 7%. In addition, the control of material consumption in production links has reduced the overall production cost of the enterprise by nearly 2%, and achieved good economic benefits. This paper discusses how to control the procurement cost based on the specific practices of the enterprise. First, establish and improve the procurement system, and do a good job in the basic work of procurement cost control. Procurement involves a wide range, and mainly deals with the outside world. Therefore, if the enterprise does not formulate strict procurement systems and procedures, it will not only have no rules to follow in procurement, but also provide a hotbed of black-box operation for procurement personnel. To improve the procurement system, we should pay attention to the following aspects: 1. Establish a strict procurement system. Establishing a strict and perfect procurement system can not only standardize the procurement activities of enterprises, improve efficiency, put an end to wrangling between departments, but also prevent the bad behavior of procurement personnel. The procurement system should stipulate the application for material procurement, the authorization authority of the authorizer, the process of material procurement, the responsibilities and relationships of relevant departments (especially the financial department), the provisions and methods of various material procurement, quotation and price approval, etc. Specifically, it includes: (1) The preparation, approval, price comparison, ordering, warehousing acceptance, settlement and other work of the procurement plan must be divided into responsibilities and strictly perform their respective duties. (2) Unless specially authorized, the procurement personnel shall conduct price adjustment and price comparison procurement according to the approved material variety, model specification (drawing number), quantity, manufacturer and safety standard certificate, and shall not change the contents of the procurement contract without authorization. (3) Except for sporadic materials procurement, the procurement business needs to sign a procurement contract, which shall be implemented after approval and approval according to the procedural requirements. (4) The purchase payment must be audited and consistent with the contract, and the payment and settlement can be made only after the material company makes specific arrangements according to the company's fund balance plan. (5) Except for special small purchases, the purchase payment must be settled by the company's finance department. 2. Establish supplier files and access system. The official suppliers of the enterprise shall be filed, and the supplier file shall include not only the number, detailed contact information and address, but also the payment terms, delivery terms, delivery period, quality rating, bank account number, etc. Each supplier file shall be filed after strict examination. The procurement of enterprises must be carried out among the archived suppliers, and the supplier files should be updated regularly or irregularly, and managed by special personnel. At the same time, it is necessary to establish a supplier access system. 3. Establish price files and price evaluation system. The purchasing department of an enterprise should establish a price file for all purchased materials, and the quotation of each batch of purchased items should be compared with the archived material prices first to analyze the reasons for the price difference. If there is no special reason, in principle, the purchase price cannot exceed the price level in the file, otherwise a detailed explanation should be made. 4. Establish the standard purchase price of materials, and reward and punish the purchasing personnel according to their work performance. The finance department should regularly set the standard purchase price for the materials under key monitoring according to the changes of the market and the standard cost of the products, so as to encourage the purchasing personnel to actively look for sources of goods and shop around, and constantly reduce the purchase price. The standard purchase price can also be combined with the price evaluation system, and reward and punishment measures are put forward to reward the procurement personnel who have completed the task of reducing the procurement cost of the company, and analyze the reasons and determine the punishment measures for the procurement personnel who have not completed the task of reducing the procurement cost. 5. Establish a perfect material procurement process. Generally speaking, material procurement needs to set up five positions, such as chief purchasing officer, inquiry officer, contractor, buyer and warehouse keeper. The chief procurement officer is fully responsible for the procurement management of materials, formulates and implements the procurement plan according to the material demand plan and the management regulations of post target responsibility cost, coordinates and makes full use of internal resources, and finally purchases the needed materials with high efficiency and low cost; The inquiry clerk is mainly responsible for inquiring about the information of directional materials in the market as planned, providing it to the purchasing person in charge and the buyer in writing, and at the same time managing the documents on file; The responsibility of the contractor is to manage the contract documents and supervise the implementation of the contract at any time; The responsibility of the buyer is more to execute the procurement task at the specified price and quantity according to the contract; The main responsibility of the warehouse keeper is to check and accept the materials into the warehouse according to the standard. After the materials enter the site, they should plan the storage and use reasonably, reduce the storage cost as much as possible, and manage the warehouse well. Second, the methods and means to reduce the cost of materials Strategy 1: Centralized procurement-the advantage of procurement scale is greater. It is a basic strategic procurement method to improve the bargaining power and reduce the unit procurement cost through the concentration of procurement volume. Many domestic enterprises have set up centralized procurement departments or supply divisions to plan and manage the production raw materials or non-production items of the company, which to some extent reduces the differences of purchased items, improves the standardization of procurement services and reduces the workload of later management. However, centralized procurement also increases the difficulty of communication and coordination between purchasing departments and business departments, and increases the difficulty of later deployment. The advantages of centralized procurement are also evident in the home appliance industry. It sounds easier to do centralized purchasing than to do it. Sometimes it can be done by not only one department of the company's purchasing department, but also the full cooperation of other departments. Cable is the material to be used in many products of Haier Group. In order to achieve centralized procurement, the purchasing department and the product design department work together to redesign the cables used in air conditioners, washing machines, refrigerators and other products in a unified way, which can standardize and use common components as much as possible. Through these measures, the number of cables purchased by Haier Group has been reduced from hundreds to more than a dozen. Only when the types of purchased products are reduced can centralized procurement be realized naturally. According to reports, this improvement alone has made Haier Group save about 2% of the cost in cable procurement. Strategy 2: Joint Procurement-Small and medium-sized enterprises jointly resist risks. Centralized procurement is basically a means for a large enterprise to maximize the scale advantage in procurement. Without a multi-category product line, product sales have not reached a certain scale, and it is impossible to achieve concentration. On the issue of purchasing price, small enterprises are in a relatively passive position, but this does not mean that many small and medium-sized enterprises have no choice but to control purchasing costs. Cross-enterprise joint procurement is a way to reduce costs. If possible, small and medium-sized enterprises can especially consider organizing or joining purchasing alliances. Strategy 3: Third-party procurement-China enterprises have not yet accepted it. As the name implies, third-party procurement means that enterprises outsource the procurement of products or services to third-party companies. Foreign experience shows that compared with enterprises' own procurement, third-party procurement can often provide more value and purchasing experience, which can help enterprises to focus more on the mining of core competitiveness. Now all industries in the United States have such purchasing alliances. The United States Local Government Procurement Alliance is a third-party procurement organization. More than 7, government agencies have joined this procurement organization, and the direct procurement cost has been reduced by more than 15%. Amerinet is the largest procurement organization for hospitals and clinics in the United States, which can reduce the procurement cost for its customers by nearly 2% on average. However, domestic enterprises are not optimistic about the prospect of reducing costs through third-party procurement. Because outsourcing will teach the company's purchasing interests and experience to other companies, which will damage the competitive advantage of enterprises. Moreover, joint procurement by various enterprises through third-party organizations can only form an opportunistic alliance, and the interests between them are difficult to maintain for a long time. Strategy 4: one company in the world-increasing the confidence of enterprises is also threatened by the price increase of raw materials, and enterprises that can realize international procurement obviously show stronger competitiveness. In October last year, due to the price increase of steel, the price of household appliances in the industry was raised because of the increase in cost. At that time, Panasonic Corporation of Japan went against the market and announced the price reduction of washing machine products owned by Panasonic Corporation. At that time, some experts pointed out that Matsushita had the confidence to reduce the price mainly because of its global procurement network, which made its material cost lower than that of similar enterprises in China. Strategy 5: Improve the added value of products-To solve the problem, it is necessary to take a long-term view. When the price increase of raw materials leads to tight costs, enterprises begin to adopt the above measures to optimize supply, which are actually to make up for it. It is difficult to have an immediate effect. At this time, we can find another way to make a fuss at the other end of the product. Because, usually, the higher the added value of products, the more peaceful the attitude towards the price increase of raw materials. The higher the proportion of raw material cost, the smaller the added value of products, and the greater the impact of raw material price increase on enterprises. To increase the added value of products, we can start from two aspects: one is to increase the technical added value of products, and the other is to increase the brand added value of products. The increase of product brand added value is mainly due to the homogeneous operation of "differentiated" enterprises, which is the structural reason for the contradiction between supply and demand, and the oversupply has caused the terminal consumer products to implement the low-price strategy, leaving no room for further price reduction. Therefore, there is basically no tolerance for the price increase of raw materials. The only way to change this situation is to implement differentiated product strategy. Strategy 6: Implement the idea of strategic cost management-guide the control of procurement cost 1. Estimate the cost of products or services of suppliers. In our previous procurement management, we only put too much emphasis on the internal efforts of the company. In order to truly control the procurement cost in an all-round way, it is not enough to rely solely on our own internal efforts. We should know the cost status of suppliers. Only in this way can we take the initiative in price negotiations. To establish a long-term cooperative relationship with suppliers and establish a win-win cooperation foundation, we cannot push suppliers to the point of losing money in negotiations. 2. Analyze competitors. The purpose of analyzing our competitors is to make clear our cost situation compared with our competitors. Where are our strengths, our competitors' strengths, and the roots of our strengths and weaknesses? Are they due to the strategic differences between us and our competitors, or to their different environments, or to a series of reasons such as internal structure, technology and management. Then, starting with eliminating disadvantages and maintaining advantages, we formulate strategies to beat our opponents in the competition. Through the analysis of competitors, find the direction of efforts and stay ahead of the competition. 3. Optimize the procurement process and methods. To further reduce the cost, we can also start from optimizing the soft management environment. Third, strengthen the overall improvement of the professional quality of procurement personnel 1. Business learning and employee training. The training of procurement personnel includes: business training (including procurement knowledge and skills training), legal knowledge training, company system training and so on. Business training focuses on improving business ability, such as the process management of procurement, the determination of economic procurement volume, how to do a good job in purchasing inquiry under the new situation, and so on; However, legal knowledge training and company system training focus on restraining abnormal behaviors in the environment and making clear the risk cost of procurement corruption. 2. Establish a performance appraisal system. It is very important for the company to evaluate the performance of each position, and it is very important to introduce and formulate scientific management methods, that is, performance appraisal standards, which can continuously promote the continuous improvement of all aspects of procurement management, affirm and encourage effective work, and objectively evaluate other non-efficiency work. The basic items and evaluation methods for evaluating purchasing ability are shown in the following table: Reference books: Warehouse Management-Zhao Tao Beijing University of Technology Press, Purchasing is so simple-Yin Qiang, China Times Economic Publishing House, Enterprise Logistics Management-Wan Zhijian, Guangdong Economic Publishing House, Practical Manual of Enterprise Material Management and Material Cost Control-Chen Yuanqing, Harbin Map Publishing House (Note: the charts and notes involved in this article, Please read the original text in PDF format.) This article is the original text. No PDF browser is installed. Download and install the original text. On the control of procurement cost, Yang Maixia's strategy 1: centralized procurement-the advantage of procurement scale is greater.
With the sound of "rising", considering how to control procurement cost, it is easy to think of the solution to adopt centralized procurement.
The real estate industry, whose main raw materials are steel bars, cement and concrete, has been dragged down by the rising prices of raw materials, and has begun to take measures to strengthen centralized procurement and centralized management of incoming goods.
The boss of a real estate company in Beijing told reporters that the steel purchase of construction enterprises in China is still relatively scattered. The purchase right of some enterprises is decentralized to the project department or even the project manager level, and the purchase quantity of each batch is not large. If the company purchases steel products in a unified way and then allocates them according to the needs of various projects, it can not only save costs by purchasing in large quantities, but also decide whether to reserve steel products by analyzing market trends, thus avoiding the risks brought by price increases.
the advantages of centralized procurement are also evident in the home appliance industry.
A manager surnamed Zhang in the purchasing department of Haier Group told the reporter that the whole group has saved the company 2% to 3% by centralized purchasing of steel plates, chemical materials, electronic components and other bulk raw materials.
In view of this price increase trend, Haier Group has specially put forward the "four big" centralized purchasing strategies, namely "big orders, big customers, big markets and big resources."
however, centralized purchasing is easier said than done, and sometimes it can be done by more than one department of the company's purchasing department.
Manager Zhang gave an example to the reporter. Cable is a component used in many products of Haier Group. In order to achieve centralized procurement, the purchasing department and the product design department work together to redesign the cables used in air conditioners, washing machines, refrigerators and other products in a unified way, which can standardize and use common components as much as possible. Through these measures, the number of cables purchased by Haier Group has been reduced from hundreds to more than a dozen. Only when the types of purchased products are reduced can centralized procurement be realized naturally. According to reports, this improvement alone has made Haier Group save about 2% of the cost in cable procurement.
strategy 2: joint procurement-small and medium-sized enterprises jointly resist risks
CIMC is a leader in the field of container manufacturing. When the reporter interviewed Miss Li, the purchasing department of the group, she talked about centralized procurement. Miss Li bluntly pointed out that centralized procurement is basically a means for a large enterprise to maximize the scale advantage in procurement. There is no multi-category product line, and product sales have not reached a certain scale.