Supplier Integration Research Based On Strategetic Alliance Of Company R

With today’s ever-changing global economic situation, the Chinese market has been gradually moving away from cheap labor market-oriented economic type. In May, 2012 Shanghai has been proposed to implement a minimum monthly wage of 1,620 RMB and the hourly wage is also raise from original 12.5 RMB to 14 RMB, which has a great impact on the plastic packaging industry, who are originally the labor-intensive industries. Based on such countries’ economies transition, the low-cost strategy will be an important indicator for business development in the next 5-10 years. For the company’s procurement strategy, resource integration strategy will be the first step in the low-cost strategy. On one hand it is how to get suppliers to maximize the effectiveness of resources; on the other hand it is how to reduce the company’s operating costs. Integrated supplier resources are to establish good long-term stable cooperative relations between the company and its suppliers to improve their core competitiveness.In February 2013, the industry leader R Company and A Group completed their strategic acquisition, by which A Group had completed the first phase of its global strategic planning. In the merger, A Group acquired three factories of R Company which are located in Shanghai, Tianjin and Shenzhen, combined with its 1 factory in Suzhou, and another 2 factories in Zhongshan. A Group has total 7 manufacturing plants in China, and basically keeps all their original product types and related customers in the industry, and also expanded R company product type and production line. In its merger process, in order to keep in line with its development strategy, supply chain sourcing strategies had also changed. R Company’s suppliers were increased from the original 1980 to more than 3,000, resulting in difficulties in supplier management, both from the cost point and the operational point. How to integrate existing supplier resources under the premise normal daily operation, meanwhile reducing the number of suppliers, centralizing the procurement and implementing the economies scale, which can reach the objective of costs reduction, quality improvement and service level improvement, becomes the research theme.This study, in the above context, based on the analysis of the industry and the market, give out a specific analysis on R Company. The supplier integration is necessary for R company under the background of merger cases between R and A. On one hand, it would achieve the aim of cost saving for company A; on the other hand, the supplier integration could enhance the competitiveness of company R by optimizing the purchasing process, and also contribute to the operation process. Therefore, the supplier integration would be the most important target for group A, and it also influences A for the best supplier in the industry.