Research Of Conglomerates’ Centralized-Procurement Management Strategy

At the time that global economy is in the midst of the economic crisis, the domestic enterprises management is greatly impacted. At the same time, domestic labor costs have risen sharply in recent years, which also greatly compress these enterprises’profit space. In this case, to increase profit space is of significant importance for all enterprises. There are basically two ways to reach the aim, the first is to improve the enterprise’s sales, and the second is to reduce the cost of the enterprise. In general, enterprises take various methods to reduce the cost, in which procurement cost is a great part. Thus, how to reduce the cost of enterprise procurement, improve the profits of enterprises, and enhance the competitiveness of the enterprise, has become a serious problem many enterprises have to be faced with.For conglomerates, it is particularly important to reduce procurement costs. Conglomerates’ internal structure is generally complex, and with the development of economy, a buyer’s market has been basically in place. Thus for conglomerates, reducing procurement costs than other costs is easier to implement. Centralized procurement is a excellent choice to save cost for conglomerates because their business negotiation is much stronger and procurement price can be effectively reduced. This procurement method is being used by numerous enterprises, and good results have been achieved.However, there are still some problems that cannot be ignored throughout the current centralized procurement management, which mainly embodied in the internal demand of not harmonious, the imperfection of the supplier evaluation and management and so on. Through theoretical analysis combined with case study, this research probes into the problems existing in the current conglomerates’ centralized procurement management, deeply analyzes the reasons of the existence of these problems. Finally on this basis puts forward the corresponding management strategies for improvement. The results of this study to crony enterprise purchasing management have important practice significance.