Summary of experience and work of the Procurement Department in reducing plywood procurement cost
Summary of several experiences of the Procurement Department in reducing plywood procurement costs Summary of several experiences of the Procurement Department in reducing plywood procurement costs Procurement is one of the most important functions in enterprise activities, and its expenditure accounts for about 60% of the production and sales volume. Under the trend that the proportion of plywood procurement cost in the total cost of the enterprise is gradually increasing, the enterprise is facing increasingly fierce market competition, the production cycle of plywood products is gradually shortened, the market demand is diversified, and the technical level of plywood products is constantly improving. At the same time, the enterprise is gradually changing from the leading technology and market monopoly to procurement to reduce costs and improve profits, thus helping it to occupy new advantages.
How to make the plywood procurement department’s work provide a key contribution to the development of the enterprise depends on the actual and effective procurement activities of the enterprise! As the purchasing director, the purchase principle of the required raw materials or equipment is to ensure reliable quality, strong safety, punctual delivery, and proper service, while reducing the plywood purchase cost, which is the core work of the plywood purchasing department.
The process of plywood procurement cost management includes four aspects: cost planning, cost control, cost analysis and cost accounting assessment; In the planning stage, the target responsibilities of each procurement position can be determined in a targeted way. By emphasizing the target responsibility system and assessing the cost reduction rate, the management of other links, such as cost control, cost accounting and cost analysis, will be significantly effective.
An excellent procurement director should start from many aspects in the procurement process. The major aspect is to create an environment for procurement in system construction and improve the execution ability of procurement business from the technical level, and continue to improve from these two key aspects. In system construction, standardize procurement behavior, and improve the business comprehensive ability of plywood procurement department from the technical level, so as to achieve the lowest total procurement cost. The procurement director has conducted various plywood procurement cost management and control mainly from the following five aspects to reduce the plywood procurement cost.
1、 Strategic procurement management
Achieving the lowest plywood procurement cost through strategic procurement management Strategic procurement management should fully balance the internal and external advantages of the enterprise, take win-win procurement as the purpose, pay attention to the development of long-term strategic cooperation with plywood suppliers, which is a procurement management paradigm to adapt to the development of the new economic situation.
Procurement is not only the procurement of raw materials, but also includes quality management, production management and plywood product design. The satisfaction of customers’ needs and preferences must be achieved through the participation of the main bodies in each link of the supply chain. The realization of customer preferences is the premise of strategy implementation. Therefore, changing the traditional procurement concept is conducive to the effective implementation of the strategy.
Based on the idea of core competence element combination, it is required to optimize the element combination between plywood suppliers and customers. Establish a long-term strategic alliance partnership rather than a trading relationship. To establish this relationship, both the supply and demand sides need to achieve strategic matching. The evaluation and management of plywood suppliers is no longer based on transactions, but should first consider whether the strategy matches. Increase the weight in the aspects of entrepreneurship, corporate culture, corporate strategy and ability elements.
Purchasing is not only about comparing goods, but also about the supply market. This analysis should include not only the price and quality of plywood products, but also the industry analysis of plywood products, and even the prediction of the macroeconomic situation. In addition, we should judge the strategy of plywood suppliers, because the strategic management ability of plywood suppliers will undoubtedly ultimately affect the reliability of the procurement relationship. All these issues fall within the scope of strategic analysis. It goes beyond the traditional procurement analysis framework (price, quality, etc.).
2、 Procurement standardization
The standardization of plywood procurement cost reduction through some standardization is the basic requirement of modern enterprise management. It is the basic guarantee for the normal operation of enterprises. It promotes the rationalization, standardization and efficiency of enterprise production and operation activities and various management work, which is the basic premise for the success of cost control. In the process of cost control, the following four standardization tasks are extremely important.
01
Standardization of purchase measurement
It refers to using scientific methods and means to measure the quantity and quality values in procurement activities, so as to provide accurate data for procurement activities, especially plywood procurement cost control. If there is no unified measurement standard, the basic data is not accurate, and the data is not unified, then accurate plywood procurement cost information cannot be obtained, let alone control.
02
Purchase price standardization
In the process of plywood procurement cost control, two comparison standard prices should be formulated. One is the procurement standard price, that is, the market price or historical price of raw materials in the market. Each accounting unit and enterprise should simulate the market; The second is the internal purchase budget price, that is, the rated price of raw materials is calculated by combining the enterprise’s profit margin requirements with the sales price during the enterprise design process. Purchase standard and purchase budget price are the basic requirements for plywood purchase cost control.
03
Quality standardization of purchased materials
Quality is the soul of plywood products. Without quality, no matter how low the cost is, it is a waste. The cost control of plywood procurement is the cost control under qualified quality. Without the quality standard documents of raw materials, it is impossible to efficiently meet the requirements of procurement activities, let alone the high and low cost of plywood procurement.
04
Standardization of plywood procurement cost data
Formulate the collection process of plywood procurement cost data, clarify the responsibilities of the cost data submitter and the bookkeeper, and ensure that the cost data is submitted on time and recorded in the account in time, so that the data can be easily transmitted and information can be shared; Standardize the cost accounting method of plywood procurement, and define the calculation method of plywood procurement cost; Form a unified cost calculation chart format to ensure the accuracy of plywood procurement cost accounting results.
3、 Reducing the procurement cost of plywood at the institutional level
Improve the basic procurement management, including the classification, grading and database establishment of plywood procurement; Determination of evaluation criteria for qualified plywood suppliers, classification of plywood suppliers and establishment of database; Confirmation of minimum batch, procurement cycle and standard packaging quantity of various plywood procurement; Samples and technical data of various purchased materials.
A bidding system should be established for bulk procurement. The company clearly formulates a process to standardize the bidding process, so that its bidding procurement can reduce the cost of plywood procurement. In particular, it should avoid taking the situation principle. If the bidding is done, the cost will increase instead.
For sporadic procurement, the procurement information registration system shall be implemented. The name, quantity, trademark, price, plywood manufacturer name, procurement location, contact number and other information shall be registered in detail with the company’s inspection department for future reference. The company can send personnel to conduct random inspection as a third party at any time.
The procurement process is decentralized and mutually restricted. The plywood procurement department is responsible for the preliminary selection of plywood suppliers. The quality and technology departments evaluate the supply capacity of plywood suppliers and identify their qualifications. The financial department is responsible for the supervision and control of the price, and the payment is approved by the company’s main leaders.
The procurement channel integration is realized through the integration of procurement personnel, and the procurement of plywood in the charge of each procurement personnel is defined. The same type of plywood must be purchased by the same personnel through the same channel, unless it is a planned variable of plywood suppliers.
Standardize the procurement contract. The procurement contract clearly stipulates that plywood suppliers shall not bribe the company’s personnel by unfair competition for the purpose of selling their plywood products, otherwise their payment for goods shall be deducted in proportion; The contract shall also specify the agreement on purchase rebate.
Purchase inquiry system: establish a purchase inquiry system, define who is qualified from the possible seller and who can complete the supply task in the raw material purchase plan at the lowest cost, and determine the scope of plywood suppliers. The technical terms of this process are also called supplier qualification confirmation. To do a good job of purchase inquiry management, it is now necessary to make full use of the computer management system and the network advantages to quickly browse and obtain the required information, so as to ensure the high efficiency of purchase inquiry management and inquiry results.
Establish a stable cooperative relationship with plywood suppliers. Stable plywood suppliers have strong supply capacity and transparent prices. Long term cooperation will give priority to the company’s supply, which can ensure the quality, quantity, delivery date, price, etc. of their supply.
Procurement management should attach great importance to improving the competitive advantage of the overall supply chain, establish long-term and stable cooperation with excellent plywood suppliers as far as possible, encourage the improvement of plywood products and technologies supplied, support the development of plywood suppliers, and sign strategic alliance cooperation agreements with them when necessary.
4、 Reduce the procurement cost of plywood at the operation level
The purchase cost of plywood can be reduced through the selection of payment terms. If the company has sufficient funds or the bank interest rate is low, cash and cash can be used. This often leads to a large price discount, but it will have a certain impact on the operation of the working capital of the whole company.
Seize the opportunity of price change. The price will often change with seasons and market supply and demand. Therefore, purchasers should pay attention to the law of price change and grasp the procurement opportunity.
Use competitive bidding to restrain plywood suppliers. For bulk material procurement, an effective method is to implement competitive bidding, which can often get the bottom line price through price comparison among plywood suppliers. Through the selection and comparison of different plywood suppliers, the company is in a favorable position in the negotiation.
Purchase directly from the manufacturer. Ordering directly from the manufacturer can reduce the intermediate links and the purchase cost of plywood. At the same time, the technical service and after-sales service of the manufacturer will be better.
Select reputable plywood suppliers and sign long-term contracts with them. Cooperation with honest and reputable plywood suppliers can not only ensure the quality of supply, timely delivery, but also get preferential payment and price.
We will fully investigate the procurement market and collect information, develop plywood supplier resources, and expand the company’s supply chain through multiple channels. In order to achieve a certain level of procurement management, an enterprise should pay full attention to the investigation of the procurement market and the collection and collation of information. Only in this way can it fully understand the market situation and the price trend, so as to put itself in a favorable position.
5、 Curb procurement corruption
The reduction of plywood procurement cost has affected enterprises. Some enterprise managers frankly said that procurement corruption is impossible to prevent, and many enterprises can’t avoid it. This is the fact that procurement personnel get one yuan from plywood suppliers, which will undoubtedly cause a loss of 10 yuan in plywood procurement cost. In order to seek solutions to such problems, we need to take measures in the following aspects: post responsibility construction, personnel selection and training, procurement discipline, employee performance appraisal system construction, etc.
For the construction of procurement posts, different posts need to be set for the procurement link to solve the problem of not concentrating procurement power, restricting each other, supervising and supporting each other, and not affecting the enthusiasm of personnel at all posts.
Personnel selection, the selection criteria for personnel in each position of procurement management, need to have the following comprehensive qualities: a certain degree of professional ability and communication ability, legal awareness, integrity, etc., and try to avoid relatives of plywood procurement department managers from undertaking procurement business. Professional ability includes not only a certain understanding of the raw material attributes, but also a clear idea of the raw material management process; The quality of integrity is particularly important for purchasing personnel who often deal with spending money. Although various measures have been taken in various aspects of internal management, front-line purchasing personnel inevitably encounter various temptations offered by plywood suppliers. How to prevent the trap setting behind the temptations requires that purchasing personnel themselves have integrity and legal awareness.
Establish sound work discipline of the Procurement Department, and make it clear that the decision-making and implementation procedures of procurement activities should be clear and transparent, and supervise and restrict each other; Strictly follow the working principles of careful planning in advance, strict control in the event, and careful analysis and summary after the event to ensure the purchase and supply of high-quality and inexpensive plywood materials that meet the requirements; Implement the procurement supervision of all staff, the whole process and all directions, resolutely put an end to malpractice, accepting, demanding rebates, and violating disciplines, laws and crimes that damage the company’s interests in the procurement and supply process, and immediately turn over gifts and cash gifts that cannot be rejected to the company for filing; The procurement personnel shall be trained to love their jobs, be conscientious, loyal to the company, be responsible for the company, safeguard the company’s interests, keep company secrets and protect intellectual property rights.
The construction of procurement performance appraisal and salary distribution system is very important to evaluate the performance of each post and plywood procurement department, introduce and formulate scientific management methods, namely, performance appraisal standards, which can continuously promote the continuous improvement of all aspects of procurement management, give recognition and encouragement to effective work, and objectively achieve a working environment in which performance can promote cost reduction.
As a purchasing director, he/she should not only do a good job in the above five aspects of procurement management, but also establish a good image of individuals and departments in the procurement process, be loyal to the company, treat people sincerely, and be strict with subordinates, which will ensure that the plywood procurement cost remains optimal and suitable for the enterprise’s market competition.
