Procurement Cost Management Strategy Of OSD

With the advent of the era of big data,the market economy has developed into a new period.Economic globalization has brought new oppor tunities and challenges for every enterprise.The global economic resources flow freel y in a new way around the world and seek to optim ize the allocation.Enterprises under the new s ituation are facing all round competition,the competition in the world.The market competition has already involved all aspects of the en terprise,including brand,technology,product,quality,service,price,marketing network and so on.With the deepening of China' s supply side reform and the increasing environmental protection,enterprises are req uired to b reak through and continuous improving in order to adapt to the new market ring.In recent years,with the rapid rising in the price of agricultural products,the prices of all kinds of production factors are increasing,especially steel,coal,and petroleum products.The cost control of enterprises is facing a completed new pressure.To keep the heel and k eep the competitive advantage,the enterprises have to secure the profits.Accordingly,careful calculation and good cost management are essential to the en terprise,each one is try ing to find all kinds of ef fective ways and m ethods to reduce the cost.The key to enterpris e cost control is to m anage procurement costs.The management of procurement costs,including two parts,first is the explicit cost,covering all kinds of related costs,including the cos t of capital occupancy,logistics and transportation costs,management costs and inventory maintenance costs,and the lost cost caused by delivery delay;the second part is the im plicit cost.It includes the cost impact during the whole process from pre-development of product to manufacturing and delivery.This article will focus on the total cost of ownership(TCO).The purchasing cost of the general enterprise is about 70% of the whole cost,which should be sc ientifically standardized and effectively managed.By determining the best "price ratio",the purchase decision can be made to reduce the purchase expenditure,improve the purchasing efficiency,expand the profit space and improve the economic benefit.This article is tak ing OSD as the research objective and analysis its procurement cost control systematically.Basing on the related concepts and related theories of purchasing cost control,the author had reviewed a lar ge number of docum ents,combined the theory of procurement cost control and the basic principles of m anagement,and gathered actual figures of OSD and quoted the relative literatures.Research includes explicit cost and implicit cost.By analyzing the current situation of OSD 's purchase cost control,it points out its limitations under the management method,as well as the higher cost caused by imported material,machining workshop,potential risk in painting workshop,the lack of ef fective management of inventory,the high occupancy rate of funds,and the lim itation of the cost control methods of purchasing.To deal with th e existing problems of OSD's purchase cost control,this paper applies several st rategies like localiza tion,VAVE,made in house or outsourcing and centralized E-procurement to improve the current status under the theory of total cost of ownership(TCO).Basing on the experience of the predecessors,focusing on the current situation of OSD,this paper analyzes the procu rement cost.Digging out several problems of its cost control,and using som e domestic and foreign theories to give the promotion plan and implem ent it,expecting to help th e enterprise to control the cos t effectively and improve its market competitiveness.