T Company Purchasing Cost Control And Solution

Purchasing cost management with supply chain background is a developing subject,more and more multi-national companies focus on this area that prove it is an effective and competitive tool to improve company operation efficiency and reduce purchasing cost.There is a huge difference between traditional purchasing and purchasing activities under supply chain background,purchasing cost control plays very important role on long-term cost control,operation efficiency improvement and this will increase company overall productivity.T Company is proceeding with transition from traditional activity to supply chain background;this is the direction of the research.T Company is a power tool manufacturer;current purchasing activities are difficult to increase operation efficiency.Top management realizes that it must be changed to the new direction of supply chain management.This article introduces basically purchasing management theory and recent research about the topic,then benchmark from the opened market and evaluation with industry environment.Secondly,to identify the existing problems encounter in the daily operation,such as shortage of cost control system,low efficiency on supplier management and inefficiency purchasing procedure,at t he same time,this article also analyses the root cause of these problems and what is the influence to the company.Thirdly,the writer suggest to optimize supply chain management through people,strategy and process to resolve the problems,the solutions including the strategy for long-term cost control,optimization of purchasing organization chart,modification of purchasing procedure,supplier classification and information technology application.Finally,to identify the potential risk and problems to ensure the proposal can be smoothly run in T Company.During the research,this article had been using different methods such as comparative analytical method for data analysis,use quantitative analysis method and Kraljic Matrix method for vendor management,material classification and cost control,then provide detailed plan to resolve the problems.Finally,to analyze the number and data in order to compare the difference after some proposals implement,these solutions and experience can be referred by the manufactures like T Company.