Study On The Purchasing Cost Management In Shipbuilding Based On TCO

Since the international financial crisis, the profitability of China's shipbuilding enterprises dramatically reduced, while the production, management, and materials cost still kept high level. It has become the common view of the shipping enterprises that reducing cost, increasing efficiency, keeping the low-cost competitive strategy, and striving to reduce the pressure to achieve the expected economic benefits to ensure the shipbuilding's development in downturn of the ship market. Cost controlling has become the most important factor for a shipbuilding enterprise to acquire the competitive advantage facing such intense global competition, and procurement costs account for the total cost of shipbuilding enterprises from fifty percent to seventy percent, so it had an important impact controlling procurement costs for the development of China's shipbuilding enterprises.This paper based on the research of other scholars, analyzed the present situation of shipbuilding enterprise and the problems in purchasing management according to the theories of purchasing management, the subdivision model of materials and the theory of TCO, and then classified the purchasing materials in shipbuilding enterprise as well as proposed the different strategies to different materials.?Purchasing materials in shipbuilding enterprises were very complicated, not all which were applicable total cost of ownership model. Through analyzing the shipbuilding enterprises purchase materials'characteristic and the superiority of TCO model, and according to the material subdivision method to classify the shipbuilding enterprises purchasing materials, we drew the strategic materials, bottleneck type material and lever type materials in shipbuilding enterprises were available to TCO model.The paper constructed the TCO model used in shipbuilding enterprise which was a special manufacturing industry. The paper analyzed the purchasing cost of raw materials, marine equipments and other equipments from the supplier, order and product level, quantified the procurement costs, established the different TCO models to different types of purchasing materials to provide theory basis for shipbuilding enterprises purchase cost management decision. And finally, this paper took the S shipbuilding enterprise as an example to study and applied purchasing total cost of ownership model to choose low-cost suppliers for S company.On the base of the total cost of ownership model, the shipbuilding enterprises control purchasing cost. When purchasing raw material, it selected suppliers adopting the tender and bid combination method; In the order level, shipbuilding enterprises minimize the undertook transportation fees, optimize purchasing process and reduce receiving costs; in the product level, select the appropriate purchasing time, enjoy the higher discount given by suppliers ,imply JIT procurement, shorten inventory period and inventory quantity. For Marine equipment procurement, shipbuilding should closely cooperate with suppliers, know the supplier qualification and the equipment types which can provide, combine the ship owner's demand with suppliers productivity; In the order level, shipyards should reduce the transportation cost, imply the electronic procurement, reduce the cost of ordering and at the same time, improve work efficiency, In the product level, shipbuilding enterprise should focus on the products quality and after-sales service ability to reduce the cost of installation and debugging.