Research On Countermeasures Of Purchasing Funds Discontinuity In Manufacturing Enterprises

The ability of cost control is the survival basis for corporate, while the procurement cost of manufacturing enterprises are often the largest area of cost of production. Therefore, the purchasing cost control has an important position in manufacturing enterprises. Through investigation in supply department of manufacturing enterprises, we found that money used to pay suppliers is often deficient. This condition leads to suppliers'discontent and frequent reminders. It has seriously affected the purchasing cost. The purpose of this paper is to further explore the issue of discontinuity of procurement funds. The content consists of four parts: analysis of causes for the problem, introduction of the problem's influences on manufacturers, suppliers and the supply chain, the allocation of limited funds among suppliers, and the method in order to improve the situation of funds discontinuity.The reason of discontinuous purchasing funds: the company's financial planning pay inadequate attention to purchasing funds; improper cycle mode of capital flow; poor environment and low ability to finance. The discontinuity of purchasing funds and the resulting delay in payment will reduce the suppliers'satisfaction for the cooperation, and then the stability of cooperation between suppliers and buyers is reduced.The discontinuity of purchasing funds and long period of payment are adverse to suppliers. In the surface, delayed payment can reduce the financing cost of manufacturing enterprises or increase its return on investment, but in the long term, the addition in purchasing cost, fee of management and risk that is led by deferred payment may far more the above-mentioned benefits. The impact on cost of final product, sales volume and operating performance must also be taken into account. Delay in payment weakened the supply chain efficiency and competitiveness. The extent of reduction changes in the same direction with the period of payment.Under the premise of discontinuous purchasing funds, the paper analyzed the disadvantages of current leader-make-decision method and FIFO method in distribution of purchasing funds. Then, the distribution scheme under limited funds is raised, and it is conducted on the base of supplier classification. Through the introduction of current capital flow mode in manufacturing enterprises and the importance of capital flow on business operations, the paper showed the necessary of reengineering the capital flow mode. Detailed description in process of reengineering capital flow mode, the specific steps of reengineering, and the influence on supply department, production department, sales department and finance department are all present in this paper. After this, types of enterprises that the modes of capital flow before and after reengineering are fit for are showed in tabular form. In the end, the paper brings forward a selection model in order to help company choose capital flow mode.