Research On The Improvement Of Purchasing Cost Management Of WD Company Based On ERP

The increased market competition has not slowed down the economy and information development. In order to maximize profits from the competitive market, a company is thought to have a cost reduction, product quality assurance and customer service improvement. Around the world, procurement cost, as high as 60%, generate a fair share of total cost, could be a direct effect the company long-term development. Therefore, the cost of procurement is playing a more and more important role. The cost of procurement in study the theory of execution and academic of a company becomes popular. Whereas, the management of the purchase cost require an in depth study based on different situations of the company.The thesis based on WD Company as an example. To improve the problems which are in the procurement cost management in the ERP. Firstly, introduce WD’s basic situation, to analyze the production characteristics and the present situation of the purchasing cost management. Then, analyze the issues of WD’s procurement cost management. The issues as follows: There is no specific processing module to deal with procurement activities in the present finance software. The procurement process is designed lacking of integrity. All the departments ignore the procurement cost control. The definition of procurement cost too narrow makes the calculation results inaccurate.The thesis raising some targeted improvement measures, as follows: Using the purchasing management module in the ERP system to define roles of all departments, thus the procurement activities normalized. To strengthen the effective communication between the departments in the ERP, through the same information sources can make a reasonable procurement process. Based on theory of TCO, to extend the definition of procurement costs in the ERP, using the ABC to accounting it, can make the results more comprehensive and accurate; Through the advance planning, matter controls, afterwards management to control procurement costs effectively, based on the procurement cost control methods are put forward in the ERP. These measures improved procurement cost management present situation of WD, reducing procurement costs, improving profits, making great significance to WD.