Research On Procurement Process Optimization Of AIG Company

With the acceleration of the process of economic globalization and the increasingly intensified market competition,the world’s economies have become more and more closely connected.Frequent and rapid business activities not only bring huge business opportunities to enterprises,but also bring unprecedented challenges.Domestic traditional manufacturing industry in the past few decades on lower labor costs and material costs of the rapid development of absolute advantage,occupy a pivotal position in the world economy,and now,with loss of low-cost resources advantage,end customer for the supplier cost,quality,delivery and service requirements rise ceaselessly,the enterprise to have to change the time,as the engine of the supply chain,procurement is cause the attention of more and more enterprises,constantly optimize the procurement process,improve the purchasing strategy,has become an effective way to improve enterprise competitiveness.AIG is a cosmetics manufacturer with American capital background.In the early stage of its establishment,due to the low price of domestic raw materials and labor costs,as well as the shortage of customer demand,the company still maintained rapid development despite many problems in process management.This year,however,as the material cost rising consumption upgrading and domestic has boosted the number of competitors and new entrants to margins are falling,the company operations management system is facing the severe test,especially in the purchasing process management problem is particularly prominent,mainly including: procurement staff knowledge and ability is insufficient,and that the responsibility is not clear;Low efficiency of communication between internal functional departments and external suppliers;Supplier selection process is not standard;Cumbersome approval process;Slow development of new products;High procurement costs;Stagnant inventory,etc.If the company is to achieve long-term development,it is imperative to study and solve these problems.This paper focuses on the procurement process of AIG,which is mainly divided into the following four parts.In the first part,by referring to a large number of relevant literatures,the domestic and foreign research theories and achievements related to process optimization and procurement management were reviewed and summarized,which provided theoretical support for the diagnosis of procurement problems and the proposal of process optimization scheme in this paper.The second part discloses and summarizes the problems existing in AIG’s procurement organization and process,and categorizes these problems into two aspects: strategic procurement process and operational procurement process.The third part is the core part of the proposed solution.In terms of optimization of strategic procurement process,an optimization plan of procurement organizational structure was proposed to separate the two teams of strategic procurement and executive procurement.Redesign new supplier access process and establish supplier evaluation system;The paper puts forward the guidance for each functional department of the company to influence the external suppliers with different roles.In the optimization of the operational procurement process,the cumbersome approval link is simplified;Use the idea of material standardization,the tool of economic order batch,non-core process outsourcing strategy,TCO cost control concept to put forward the procurement cost control scheme;Draw lessons from VMI supplier management inventory and JIT just-intime system theory to put forward the inventory management optimization plan.The fourth part describes the guarantee mechanism to ensure the implementation of the procurement process optimization plan: the senior management of the company needs to support and promote the process optimization from the height of the company’s development strategy;The development of staff training plan is the basis to support the smooth progress of process optimization;Set up a process optimization team to integrate functional departments of the company and make cross-functional communication more efficient.Establish information sharing platform to facilitate information transparency and simplify workflow.