Study On Reverse Pricing Model Of Mechanical Parts For Metso Minerals

Since the reform and opening policy has been carried out in China for more than thirty years,the manufactory ability of China has been improved sharply.As the result,China has become the best manufactory factory in the world.However,accompanied by the external environment changes such as disappearing of the demographic dividend,the increasing production cost of local enterprises,the economic development model of Reform and Opening in China being changed from extensive type to intensive model,the appreciation of RMB and economic globalization,more and more companies are facing with the dilemma that the purchasing cost is crazily increased.How does Metso mineral choose and formulate a systematic price model which could enhance bargaining power of purchase department of Metso mineral when they negotiate the purchasing price with suppliers? Based on this systematic price model,the purchase cost will be controlled properly,which is crucial for the Metso mineral's profitability ability.Based on above reasons,this article suggests that we could use reverse pricing model to help Metso mineral to decrease its purchasing cost.Thus the profitability and competitiveness of Metso mineral will be improved.Firstly,the relative pricing theories and methods are briefly introduced.Secondly the development of Metso mineral in China is introduced.And the current purchase status and pricing flow chart of Metso mineral are summarized.Meanwhile,taking the mechanical goods as an example,three problems which Metso mineral are facing are analyzed,such as the needs of Metso mineral's suppliers applying to increase the sale price,the increasing purchasing cost of Metso mineral,the relationship problem between Metso mineral and its suppliers.Furthermore the root causes of these dilemmas explored.On this basis,the idea that the reverse pricing model could be used for Metso mineral to solve these problems is put forward.By means of product orientation,model classification and selection of key ingredients of reverse pricing model,the reverse pricing model is constituted by raw material cost model,machining cost model,other cost model.Research on the physical mechanical parts is verified in order to illustrate the efficiency of the reverse pricing model.Finally,the effects are compared between the reverse pricing model and previous pricing method on declining of purchasing cost,improving the suppliers' KPI,obtaining the approved from suppliers and improving the relationship between Metso minerals and suppliers.Furthermore,this research suggests the aspects of reverse pricing model that could be continuously optimized through PDCA tools.Based on the advantages of reverse pricing model compared to previous pricing method,it is hoped that this reverse pricing model could be applied into the pricing of other category of Mesto minerals and provide references for controlling and decreasing the purchasing cost of other products.