Study On The Control Of Purchasing Cost In Manufacturing Industry Based On TCO

In the environment of global economic integration,our country's manufacturing industry is facing an increasingly fierce market competition.The cost control has become a key factor for enterprises to obtain competitive advantage,and purchasing costs of raw materials are the most important cost factor.For the manufacturing sector,the average purchasing costs of the enterprises accounted for above 50%of the total cost,we can see that the control of the purchasing costs have an important impact in the development of manufacturing enterprises.This paper applies the concept of total cost of ownership,analyses the composition of raw material purchasing costs and the impact of factors,to take the necessary measures to reduce the purchasing costs,and then discuss to minimize the TCO of materials procurement.This paper analyses the purchasing costs in the procurement activities from the perspective of the supply chain,regards the supplier and material procurement as a whole benefits from the procurement point of view of TCO.TCO requires each procurement enterprise on the supply chain to consider the cost for all activities that occur in the procurement process,analyses each of the procurement process flow and activity costs,not only the purchase price,transportation costs,storage costs,TCO also considers the hidden costs after purchasing.This paper analyses the procurement cost on a new perspective,and also analyses the influencing factors in the process of purchasing costs formation,provides a favorable basis for the control of purchasing costs.This paper analyzes the uncertainty of the purchasing costs formatting,procurement lead time,procurement price fluctuations,supplier selection and evaluation and so on,that constitute negative factors of purchasing costs control,which are necessary to consider for reducing purchasing costs.There are a lot of aspects of exploration and innovation in this paper, such as the whole process of procurement cost control,setting up the relationship of co-operation or alliance with the supplier using the result of TCO model analyzing.