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The Optimization Schemes For Raw Material Purchasing Cost Management Of Garrett's New Products

Posted on:2021-05-28Degree:MasterType:Thesis
Country:ChinaCandidate:M HuFull Text:PDF
GTID:2439330620977635Subject:Business administration
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Under the background of global economic integration,the market competition is becoming increasingly fierce,and the profit advantage brought by the original technology leading is disappearing,which is gradually manifested as the trend of cost competition.Garrett is a multinational company with 13 manufacturing plants around the world.As a Tier One supplier for the automotive industry,Garrett has been a leading domestic manufacturer and seller of turbocharger products since 1994,with its roots in the Chinese market.Spurred by national policies and GDP growth,the proportion of turbochargers in cars is rising,and new product development to match market demand has become Garrett's top priority.How to develop new products while ensuring that new products bring corresponding profits to the company is actually the discussion of raw material purchasing cost management.For a manufacturing company like Garrett,the cost of purchasing raw materials is the most direct profit lever.In this thesis,the raw material purchasing cost of Garrett refers to the purchasing price of components of new products,including ex-factory price,freight and tariff.The optimization of raw material purchasing cost management is carried out on new products arming at the components' professional procurement classification and strategy making,the effective control of raw material purchasing cost in the development process and life cycle of new products.This thesis conducts research on specific issues through group interviews based on the introduction of research background and literature review.Firstly,it explores the problems of Garrett's raw material purchasing cost management in new product development projects,including the high purchasing price of components of new products,the raw material purchasing cost of new products for mass production exceeding the target cost and the difficulty in achieving the annual decline index of raw material purchasing cost of new products.Secondly,by sorting out the problems,it is found that the existing problems are caused by the lack of professional purchasing methods of components,the loopholes of raw material purchasing cost control in the development process of new products and the imperfect raw material purchasing cost management during the life cycle of new products.Further through the application of Kraljic model and the fuzzy comprehensive analysis method based on AHP,a specific solution is proposed for the procurement classification and strategy optimization of components.Based on the theory of "flawless" project management,this thesis proposes a corresponding optimization scheme for raw material purchasing cost control in the development process of new products.In addition,by looking at the new product macroscopically and combining with the product life cycle theory,a deepening scheme is further proposed for product life cycle management of raw material purchasing cost for new products.The overall scheme systematically points out the direction of Garrett's raw material purchasing cost management from point to surface.In order to ensure the smooth implementation of the schemes,three progressive and gradually in-depth safeguard measures are proposed: integrating the current company's IT systems which means to match with the developing direction of raw material purchasing cost management of Garrett's new products;forming system documents which means to form the corresponding rigid constraints to make the internal implementation of the schemes more smooth;establishing incentive mechanism which will mobilize the enthusiasm of personnel and optimize the implementation of the schemes to maximize the effect.The research results of this thesis can provide new ideas of raw material purchasing cost management for the ongoing and future new product development projects in Garrett,help Garrett achieve expected profit or profit growth better,transport resources for the sustainable development of Garrett,and provide solutions for companies with similar problems in the automotive industry.
Keywords/Search Tags:automotive industry, new product development, raw material purchasing cost, purchasing price of components
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