Procurement Management Strategy Study In The Supply Chain Of T Company

At present the manufacturer had expand production capacity rapidly, the demand is fully satisfied. So the company faces the problem of overcapacity. Most of the company has to lower the price to get the order for keeping the production running even though they can’t make any profit. Therefore cost controlling becomes more and more important when the speed of economic development and consumer’s demand decreased.The purchasing cot controlling has the leverage effect. It can reduce the purchasing cost and better the performance of the company. It’s a method to improve the performance of the company in a short time for manufacturer in the market saturation and low-profit manufacturing industry.T company belongs to the process- oriented manufacturing. It has few of core technology. Its’ product is consumer electronics, has the characteristic of low unit price, frequent order and unstable order amount etc. T company chooses the famous supplier due to product positioning, the product bargain level is lower than the suppliers. The entire cost goes up rapidly due to information asymmetry and self-protect. Finally it forms a double margin effect.This paper is mainly focus on studying of the supply chain in T Company base on supplier chain theory and cost management. It analyzes the rising of purchasing cost base on double margin effect. Finally it finds the product unit price for purchasing is rising due to overprotection for exchange rate settlement and payment conditions. The information becomes more transparent when the upstream and downstream company forms stable supply chain. The company takes the optimizing the way of exchange. The intermediate cost is cancelled accordingly. The price of the product decreases and forms the stable relationship, and weakens the double margin effect. And finally chooses the exchange rate settlement and payment ways for optimizing. It quickly improves the manufacturer performance in short term.This study is based on T Company which is a manufacturer industry. It could be an example for similar manufacturer, especially for import industry and also could be good for weak bargain processing enterprise.