Study On Cost Control For Warehouse Spareparts Purchasing Of M Company

In order to ensure the production,spare parts reserve is necessary.However,the excessive spare parts would take up a lot of liquidity and increasing warehouse costs.On the other hand,the spare parts would be damaged due to long-term storage.Or if the production process changes,the equipments upgrade or replace,most of the spare parts would be out of use or scrapped,which will increase costs and reduce the earnings.Base on the reference to large number of domestic and foreign literatures,this paper is to research the cost control of the spare parts procurement and put forward some improvements for the cost control.This paper firstly introduces the general information and the challenges of M company.Secondly analysis the current situation and find the three main reasons which are high total purchasing cost,high inventory cost and low efficiency in procurement.The paper proposes the improvement solution aiming at the three reasons.Set up target cost and classify the spare parts.And then using TCO to control purchasing cost;implementing JIT to reduce inventory cost;optimize supplier structure to improve the efficiency.