A Research On Comprehensive Evaluation Model For Network Equipment's Purchasing Decision Of Communication Operators

With the further progress of economic globalization and the gradual improvement of Chinese market mechanism,competition among enterprises has spread to all aspects of production and operation process instead of restricting to the enterprises themselves.In order to occupy advantage and dominant position in the market competition,firms pay more attention on how to how to deal with purchasing management and supplier management,how to integrate supply chain system,how to accomplish top-level design of production and operation,and how to maintain market competitiveness of enterprises.It is the common aspiration of all enterprises to select suppliers with advanced technology,stable quality products,good reputation,excellent after-sales service,and to establish mutually beneficial strategic partnership with the suppliers.Therefore,establishing a comprehensive,objective,quantitative and qualitative system of procurement and supplier evaluation in supplier management have become an important part of the enterprise's core competitiveness.Since 2000,the state further deepen a series of market-oriented reform of management mechanisms for communication operators,such as separating the government functions from management,business restructuring,structural reform,overseas listing and so on.Accompanied by the development of operators,the broadband Internet and mobile Internet business are booming,so operators are faced with strong competition in both business and capital markets.In recent years,the revenue growth of operators has slowed,their profitability has been declining,and under the SAC unified management,cost reduction and efficiency improvement are faced with enormous challenges.From 2004,the three major domestic carriers'purchasing managements of major network equipment were centralized to company headquarters,it symbols the start of integration of the supply chain system.The standardization,economies of scale and risk control of the selection of equipment have been significantly improved and the supplier management of mainstream equipment has also been further strengthened by centralized procurement.The promotion of centralized procurement has exacerbated the intensity of competition among suppliers,so the price of equipment is continuously falling.But at the same time,the complaints about equipment's quality,stability,service life and so on from operating and user department are being exposed constantly.Different from general manufacturing enterprises,Communication operators have high requirements for their equipment in terms of long service period,operation and maintenance at a reasonable cost,durability and stability,capacity scalability.For some time,purchasing department of operators put a lot of resources to improve supplier management and quality control in the centralized procurement to solve the complaints from internal user department,at the same time,the equipment's operation and maintenance costs also have a tendency to grow over time.How to change the status quo has become an important issue that the staff of communication operators who are engaged in procurement management and supplier management have to face.Domestic and international research about purchasing management and supplier management can be divided into qualitative method and quantitative method,these research are mainly focused on the following areas,Life Cycle Costs(LCC),ADC method,supplier evaluation method and so on.This paper mainly studies the following issues.The first one is how communication operators can make better use of LCC and ADC,which are two important management tools,during the centralized purchasing of network equipment?The second one is whether we can create a new evaluation model to enrich the existing theory of supply chain management,and the last is whether we can provide a new management tool for management practice.From the existing literature,we find that there is little connection between the current research and practical use about LCC and ADC.From the perspective of practical use,the applications about the two tools start from the military field and then spread to general equipment manufacturing enterprises on the worldwide,which are also the same with the domestic trend.There are already some applications in both electronic and communication industry for LCC,while the application for ADC is still refined to the military field.Whether both evaluation methods in large-scale communications equipment operators centralized purchasing mode are worth learning and use still remains a question.This paper constructs the LCC model under the instruction of current literature,combining various factors.According to the results of empirical research,we find that it is meaningful for communication operators to evaluate the management of suppliers in the centralized purchasing for network equipment via the tools.This paper uses AHP to analyze the effectiveness factors for the main equipment with the combination of carrier-related communications network equipment requirements of the main indicators of the standard technical specifications,technical indicators supplier bid response equipment,M company NMS and asset management system data,M engineering,network,and other technical engineers evaluate survey data,etc.The results of the analysis also verified the engineering and technical personnel for technical stability of different devices from different vendors,reliability,equipment capacity,stability evaluation.The empirical results verified the common phenomenon that the evaluation results are different when using LCC and ADC independently.The purchasing department pays attention to the cost while the maintenance department is concerned about the effectiveness of equipment,whether it is sensible to integrate the LCC and ADC as a whole to build a new model for evaluation in purchasing and supplier management remains a question.This paper builds a comprehensive new evaluation model on the basis of current literature with the combination of LCC and ADC,and then optimizes the new model from the perspective of management,which standardizes S into the range of 0-1.This paper compares S calculated from the new model with the results from LCC and ADC,and then draws the conclusion that it is meaningful to evaluate through the new model.The construction of new model makes contribution to the supply chain theory.Besides,it also provides practitioners with new evaluation tool in purchasing and supplier management.Furthermore,the new model can increase the efficiency in evaluation.