A Study On Speed Sourcing Negotiation Model In Automotive Component Purchasing

The purpose of this paper is to study the process and application of the speed sourcing negotiation model in components procurement of automobile enterprises.With the beginning of China's economic “New Normal”,China's economic growth is slowing down,all walks of life are facing a more severe situation,the automotive industry is no exception.Under the current new environment and the situation that the number of car ownership gradually tend to saturation,keeping a steady growth in profits through reducing the purchased cost of components play a greater role to realize the profit maximization in automobile industry.According to the statistics and financial analysis,70%-80% of product cost in automobile industry is caused by the material purchasing cost,profits will increase by 5%-10% when purchasing cost decrease 1%.(the research of operation mode of auto parts joint procurement author Zhuang Lin Feng,Zhang Guang Ming).Therefore,the author believes that procurement negotiations about the component cost are crucial.The study of this paper is to initially introduce the speed sourcing negotiation model in components procurement of automobile enterprises.The establishment of a mathematical model supports to analyze the importance and necessity of supplier sequencing in the speed sourcing negotiation model.Besides in order to deepen the interpretation of the speed sourcing negotiation model,a case analysis has been studied as well as the comparison with the traditional bilateral negotiation model.The speed sourcing not only ensures a fair and impartial negotiation,but also can support buyer to get the most competitive offer from suppliers,which contributes to cost saving and productivity improvement.This paper mainly uses the method of comparative analysis,personal experience,analytic hierarchy process,SWOT analysis and other methods.The study result of this paper is to help the domestic automobile enterprises to understand the negotiation of speed sourcing by making a detailed analysis of their advantages and disadvantages,which will provide an important reference for the domestic automobile enterprises procurement negotiation model.Through the actual case study of a luxury car brand joint venture as well as the comparison with the traditional one-to-many negotiation model,the application of the rapid auction mode speed sourcing has been comprehensively analyzed.