Study On Procurement Cost Control Improvement Of Company A

Procurement is a core part of business management.At the same time,it is also an important source of profits and the image of enterprises.It's a bridge that connects customer and supplier.Commodity procurement has important implications for improving corporate cost advantages and core competitiveness.In the commodity procurement activities,procurement cost control is the key point.Procurement cost is the largest part of the operating costs of enterprises,accounting for about 50%-70%of the total expenditure on manufacturing.At the same time,research shows that reducing the procurement cost of 1%,the contribution of corporate profits growth is about 10%or more.Therefore,procurement cost control of enterprises is very significant.It is an important channel for enterprises to enhance profitability.However,for the procurement cost control content,many enterprises are more concerned about the product price.Procurement staff are more inclined to use these methods,such as competitive negotiations,the delay of payment time and so on.In the context of the current economic globalization,the competition is increasingly fierce,the supply chain is constantly reorganized,updated and improved.So,this kind of procurement cost control methods that are only beneficial to the customers will gradually be eliminated,and replaced by a win-win way.Company A is an aluminum electrolytic capacitor manufacturer,which has been in a leading position in our country.In recent years,it has been working on the development of new aluminum electrolytic capacitors to compete with other companies on the market.However,faced with fierce competition,high-quality products and advanced technology are not enough to win the favor of customers.In order to achieve greater advantage,company A should focus more on reducing procurement costs.Therefore,for the company A,the procurement cost control is particularly important.However,limited by the traditional management ideas,procurement cost control methods of company A is still inadequate.At present,company A controls the procurement costs only by price negotiations and bulk purchases.In the product development phase,the participation of suppliers and procurement department is insufficient.It leads to new products overcapacity and the waste of raw materials.Second,company A ignores the volatility of raw material prices.Once the raw material prices increase,the company do not have any measures to deal with.At the same time,company A also lacks inventory management measures and supplier management system.In view of the above problems,this paper puts forward a series of concrete improvement measures,such as paying attention to the procurement cost,strengthening the management of raw material price fluctuation,strengthening the coordination between procurement and stock,and perfecting the supplier management system.In this paper,the overall procurement cost of company A is taken as the subject.Through theoretical research and practice,various cost control measures are presented.Anyway,it is expected that the research on the procurement cost control of company A will have a reference value for other companies.