Purchasing is one of the most important functions in corporate activities, and its expenditure accounts for about 60% of production and sales. Under the trend that the purchase cost of modern correction stoves is gradually increasing as the proportion of the total cost of the enterprise, the enterprise is facing increasingly fierce market competition, and the product production cycle is gradually shortening.
The diversification of market demand and the continuous improvement of product technology levels are depressed. At the same time, companies are gradually turning from technology leadership and market monopoly to purchasing to reduce costs and increase profits, thereby helping them to occupy new advantages.
How to make the work of the purchasing department provide a key contribution to the development of the enterprise? How to make it exert greater performance in supply chain operations? This all depends on the actual and effective procurement activities of the company!
As the purchasing director, the principle of purchasing the required raw materials or equipment is to ensure reliable quality, strong safety, punctual delivery, and service in place, while reducing purchasing costs. These are the core tasks of the purchasing department to complete the mission given by the company.
The process of corporate procurement cost management includes four aspects of management, namely cost planning, cost control, cost analysis, and cost accounting and assessment; the planning stage can be targeted to determine the responsibilities of each position in the procurement, and then by emphasizing the goal of the position Responsibility system, assessment of cost reduction rate and other means, to do well in other aspects of management such as cost control, cost accounting and cost analysis will receive obvious results.
An excellent procurement director should start from many aspects in the procurement process. The major aspect is to create an environment for procurement in terms of system construction and to improve the execution ability of procurement business from the technical level, and continue to improve from these two key aspects, and system construction Regarding procurement behavior, technically improve the comprehensive business capabilities of the procurement department to achieve the lowest total procurement cost. Purchasing director’s multi-faceted purchasing cost control mainly starts from the following five aspects to reduce the purchasing cost.
1. Minimize procurement costs through strategic procurement management
Strategic procurement management should fully balance the internal and external advantages of the enterprise, take win-win procurement as its purpose, and focus on the development of long-term strategic partnerships with suppliers. It is a procurement management paradigm that adapts to the development of the new economic situation.
1. Purchasing is not only a raw material procurement problem, but also includes quality management, production management and product design issues. The satisfaction of customer needs and preferences must be achieved through the participation of the main body of each link in the supply chain to realize the conversion of customer needs into product design. The realization of customer preferences is a prerequisite for the implementation of the strategy. Therefore, changing the traditional procurement concept is conducive to the effective implementation of the strategy.
2. The idea based on the combination of core capabilities and elements requires an optimized combination of elements between suppliers and customers. Establish a long-term strategic alliance partnership rather than a transaction relationship. To establish such a relationship requires strategic matching between the supply and demand sides. Supplier evaluation and management is no longer based on the transaction as the first priority, but should first consider whether the strategy is matched. Increase the weight in the aspects of entrepreneurship, corporate culture, corporate strategy and capability factors.
3. Purchasing is not a single shop, and supply market analysis should be carried out. This analysis should include not only product prices, quality, etc., but also product industry analysis, and even predict the macroeconomic situation. In addition, we should make a judgment on the supplier’s strategy, because the supplier’s strategic management ability will undoubtedly ultimately affect the reliability of the procurement relationship. All these issues belong to the category of strategic analysis. It goes beyond the traditional procurement analysis framework (price, quality, etc.).
2. Reduce procurement costs through some standardization
Standardization is the basic requirement of modern enterprise management. It is the basic guarantee for the normal operation of the enterprise. It promotes the rationalization, standardization, and efficiency of the enterprise’s production and operation activities and various management tasks. It is the basic prerequisite for successful cost control. In the cost control process, the following four standardization tasks are extremely important.
1. Procurement measurement standardization. Refers to the use of scientific methods and means to measure the quantitative and qualitative values in procurement activities, and provide accurate data for procurement activities, especially procurement cost control. If there is no unified measurement standard, the basic data is inaccurate, and the data is not standardized, it will be impossible to obtain accurate procurement cost information, let alone control it.
2. The purchase price is standardized. In the process of purchasing cost control, two comparison standard prices should be established. One is the standard purchasing price, that is, the market price or historical price of the raw material market, which is carried out by simulating the market between each accounting unit and the enterprise; the second is the internal procurement budget price, which is in the enterprise The design process calculates the rated price of raw materials through the combination of corporate profitability requirements and sales prices. Purchasing standards and purchasing budget prices are the basic requirements for purchasing cost control operations.
3. Standardize the quality of purchased materials. Quality is the soul of a product. Without quality, no matter how low the cost is, it is a waste. Purchasing cost control is cost control under qualified quality. Without the quality standard documents of the purchased raw materials, it is impossible to efficiently meet the requirements of the procurement activities, let alone the high and low procurement costs.
4. Standardization of procurement cost data. Develop the procurement cost data collection process, clarify the responsibilities of the cost data sender and the account holder, ensure that the cost data is submitted on time, entered in the account in time, the data is easy to transmit, and the information sharing is realized; standardize the procurement cost accounting method and clarify the calculation of the procurement cost Method: Form a unified cost calculation chart format to ensure that the results of purchase cost accounting are accurate.
Third, reduce procurement costs at the procurement system level
1. Improve the basic management of procurement, including the classification and grading of purchased materials and the establishment of a database; the determination of qualified supplier evaluation standards, the division of supplier levels and the establishment of database; the confirmation of the minimum batch size, procurement cycle, and standard packaging quantity of various materials ; Samples and technical data of various purchased materials.
2. A bidding system should be established for bulk purchases. The company clearly formulates a process and standardizes the bidding process, so that bidding and procurement can reduce procurement costs, especially to avoid situationalism. The bidding is done, and the cost will increase.
3. The purchase information registration and reference system is implemented for scattered purchases. Information about purchased product names, quantities, trademarks, prices, manufacturer names, purchase locations, contact telephone numbers and other information must be registered with the company’s inspection department for reference. The company can send someone as a third party at any time. Conduct spot checks.
4. The procurement process is operated in a decentralized manner and mutually restricts each other. The procurement department is responsible for the primary selection of suppliers, quality and technology departments evaluate the supplier’s supply capacity, and the qualifications are determined. The financial department is responsible for the supervision and control of prices, and the payment is by Approval by the main leaders of the company.
5. Realize the integration of procurement channels through the integration of procurement personnel, clarify the procurement materials that each procurement personnel is responsible for, and the same type of materials must be purchased by the same person and through the same channel, unless it is a planned supplier variable.
6. Standardize the purchase contract. The purchase contract clearly stipulates that the supplier shall not bribe company personnel in the form of unfair competition for the sale of its products, otherwise the payment shall be deducted proportionally; the contract shall also specify the agreement on the purchase rebate.
7. Purchase inquiry system, establish a purchase inquiry system, clarify who is qualified and who can complete the supply tasks in the raw material procurement plan at the lowest cost from possible sellers, and determine the scope of suppliers. The technical term for this process is also called Supplier qualification confirmation. To do a good job in purchasing inquiry management, it is now necessary to make full use of the computer management system and take advantage of the network to quickly browse and obtain the required information, so as to ensure the high efficiency of purchasing inquiry management and obtaining inquiry results.
8. Establish a stable cooperative relationship with suppliers, stable suppliers have strong supply capabilities, price transparency, long-term cooperation, they have certain priority arrangements for the company’s supply, and can ensure the quality, quantity and delivery of their supplies Period, price, etc. Procurement management should attach great importance to improving the competitive advantage of the overall supply chain, establish long-term and stable cooperative relations with excellent suppliers as much as possible, encourage the improvement of supplied products and technology, support the development of suppliers, and sign strategic alliances with them when necessary Cooperation agreement and so on.
4. Methods and means to reduce procurement costs at the procurement level
1. Reduce procurement costs through the choice of payment terms. If the company has sufficient funds, or if the bank interest rate is low, it can use the cash-to-spot method, which can often bring a larger price discount, but it will have a certain impact on the operation of the entire company’s working capital.
2. Grasp the timing of price changes. Prices often change with seasons and market supply and demand. Therefore, purchasers should pay attention to the law of price changes and grasp the timing of purchases.
3. Contain suppliers by means of competitive bidding. For the purchase of bulk materials, an effective method is to implement competitive bidding, which often results in a bottom-line price through the comparison of prices between suppliers. Through the selection and comparison of different suppliers to restrain each other, so that the company is in a favorable position in the negotiation.
4. Procurement directly from the manufacturer. Ordering directly from the manufacturer can reduce intermediate links and lower procurement costs. At the same time, the manufacturer’s technical services and after-sales service will be better.
5. Choose reputable suppliers and sign long-term contracts with them. Cooperating with honest and credible suppliers can not only guarantee the quality of the supply and timely delivery, but also get preferential payment and price.
6. Fully conduct surveys and information collection of the procurement market, develop supplier resources, and expand the company’s supply chain through multiple channels. To achieve a certain level of procurement management for an enterprise, it should pay full attention to the investigation of the procurement market and the collection and sorting of information. Only in this way can we fully understand the market conditions and price trends, and put ourselves in a favorable position.
Fifth, curb procurement corruption affects companies’ reduction of procurement costs
Some corporate managers said frankly: “Purchasing corruption is impossible to prevent, and many companies can’t get around this barrier.” This is the reality that procurement personnel get one yuan from suppliers, which will undoubtedly cost ten yuan in procurement costs. In order to find solutions to this type of problem, we need to take measures in the following aspects: job responsibility construction, personnel selection and training, procurement discipline, employee performance appraisal system construction, and so on.
Purchasing post construction requires setting up different posts for the procurement link, in order to solve the problem of not over-concentrating the purchasing power, mutual restraint, supervision and support, and at the same time not to affect the enthusiasm of the staff in each post.
Personnel selection, the selection criteria for each position of procurement management personnel need to have the following comprehensive qualities: a certain degree of professional and communication skills, legal awareness, cleanliness, etc., and try to avoid the relatives of procurement department managers from taking on the procurement business.
Professional ability includes not only a certain understanding of the attributes of the raw materials responsible, but also a clear idea of the process of raw material management; clean quality is especially important for purchasing personnel who often deal with money, although internal management Various measures have been taken in each link, but for front-line procurement personnel, it is still inevitable to encounter various temptations proactively provided by suppliers. How to prevent the setting of traps behind the temptation requires the procurement personnel themselves to have integrity and integrity. Legal awareness and so on.
Establish a complete work discipline of the procurement department, clarify that the decision-making and implementation procedures of procurement activities should be clear, transparent, and supervise and restrict each other; strictly follow the working principles of “pre-planning, strict control during the event, and careful analysis and summary afterwards” to ensure Purchasing and supplying high-quality and inexpensive materials and materials that meet the requirements;
Implement “full staff, full process, all-round” procurement supervision, and resolutely put an end to private fraud, acceptance, rebates, and disciplinary, illegal, and criminal behaviors that damage the company’s interests in the procurement and supply process, and the supplier’s gifts and gift money that cannot be rejected , Should be immediately turned over to the company for filing; train purchasers to love their jobs, perform their duties, be loyal to the company, be responsible for the company, maintain company interests, keep company secrets, and protect intellectual property rights.
Purchasing performance appraisal and salary distribution system construction It is very important for each post and purchasing department to evaluate the performance of each purchasing post. It is very important to introduce and formulate scientific management methods, that is, performance appraisal standards, which can continuously promote the continuity of all links of procurement management. Improve, give affirmation and encouragement to effective work, and objectively achieve a working environment where performance promotes cost reduction.
As a purchasing director, not only do the above five aspects of purchasing management work, but more importantly, establish a good image of individuals and departments in the purchasing process, be loyal to the company, treat people with sincerity, and be strict with subordinates, which will surely keep the purchasing cost Optimization is suitable for the market competition of enterprises.
Shanghai rainbow package Provide one-stop cosmetic packaging.If you like our products, you can contact us,
Website:
www.rainbow-pkg.com
Email: Bobby@rainbow-pkg.com
WhatsApp: +008613818823743
Post time: Nov-30-2021