The Study Of "FLEXIBLE PURCHASING STRATEGY" In Jilin COFCO Coca-Cola Co.,Ltd.

Under the present-day economic circumstances, the traditional manufacturers are now facing an unprecedented challenge, particularly in the fast-consuming-product industry. Pepsi Co., Ltd, the traditional competitor of Jilin Coca Cola Beverage Co., Ltd of Chinese Food, has already built its base in Changchun Economic Development Zone seven years prior to Jilin COFCO Coca-cola Beverages Co., Ltd. At present, Jilin COFCO Coca-cola Beverages Co., Ltd is now in such a tough state of fierce competition that it is often troubled by the loss due to shortage of finished product and the storage of rather expensive raw material. Jilin COFCO Coca-cola Beverages Co., Ltd was built in 2002 and its sales growth rate has already reached above 34%. However, as far as the current situation is concerned, it is a tough task for it to catch up with or outperform such a competitor as Pepsi Co., Ltd. Due to this, the management section of Jilin COFCO Coca-cola Beverages Co., Ltd on the one hand strengths the management of sales and distribution, and on the other hand reinforces the management of purchase by working out flexible strategy with purchase staff. Its demand for purchase has risen from the basic fulfillment of supply to dynamic and flexible supply based on the supply chain as a whole. And flexible purchase concept is advanced. It requires that purchase should be under the guidance and consultancy of JUST IN TIME (JIT) and tackle the demand of production with dynamic and flexible purchase strategy, which aims at reinforcing the company's overall competitive strength by reducing dynamic storage and activating the use of capital as well as avoiding shortage of finished product. The most essential core concept of flexible strategy is that required amount of raw material should be purchased only at a certain time. The management staff can successfully prohibit overproduction and completely eliminate the excess of finished product and storage as well as all sorts of problems caused by them. Meanwhile, it can also sufficiently reveal the reason why inferior products are made and the problems and improper aspects in the production process, and entirely eliminate all kinds of waste that cause the increase of cost by solving these problems. The flexible strategy taken by Jilin COFCO Coca-cola Beverages Co., Ltd is as follows: I. Construction of reasonable supply chain frame and exertion of the flexible strategy Any good strategy needs good plane holder in order to play to its best. The successful management of supply chain lies in the fact that the purchase of raw material, the design of product, the plan of production, the disposal of material, the management of merchandise, transportation, storage and customer services as well as other activities should be coordinated into a seamless process with its purpose of maximizing the value of the whole supply chain. Therefore, Jilin Coca Cola C., Ltd of Chinese Food organized a supply chain that includes 7 function sections, which provides conditions for the practice of flexible purchase strategy and thus testifies to the improvement of the company's overall competitive strength. II. The management o f the zero-storage inside the company and the strategy of supply delay The core concept of zero-storage strategy is, by eliminating all the futile work and waste in the production process, to pursue the ideal state of approximation to zero storage and realize "proper amount of raw material is purchased at a proper time, and needed and qualified product is produced and then transported to the place in need."The strategy of supply delay is to put the product at the end of the supply chain that makes the product finished in the vicinity of the customers. To the actual operation of Jilin COFCO Coca-cola Beverages Co., Ltd's flexiblestrategy, it means that the production date of raw material should be the latest as possible , which thus makes the production date of the products from the company's supply chain the latest. The merit of the strategy of supply delay is that it can reduce the total stocks including those of the suppliers and the storage time, and then improve the customers'response. III. The win-win strategy between purchasers and suppliers The lowest storage cost to both the purchasers and suppliers can be achieved through VMI's co-operative strategy between the users and suppliers. Due to the fact that, under the mutually agreed object frame, suppliers are in charge of storage and purchasers often oversee and revise the object frame, a continually improving supply environment can be formed. IV. The practice of flexible strategy in response to the uncertainty in the operation of supply chain in reality. Although the actual operation of supply chain takes the above measures, uncertainty elements exist in the actual purchase process. And the comparatively two important ones are as follows: First, the increasing disparity of demand information causes the uncertainty in the suppliers'storage Second, the accumulative domino effect of supply delay of product flow causes the uncertainty of delivery date. Since product flow and information flow are two important factors that consist of supply chain, in the Jilin COFCO Coca-cola Beverages Co., Ltd, we respond to the uncertainty of delivery date of finished product with the "zero storage of raw material and the storage safety"principle, and tackle the uncertainty of storage with "flexible purchase strategy and production rolling plan". In the digital era, with the development of network communication and information technology, the storage, analysis and transmittance of the information of goods production and market demand are processed precisely and fast. The information flow inflexible purchase management is no longer confined by time or space, and the purchase department, the DOP department, the production department, the sales operation department and suppliers as well as other departments can share the information directly, which helps avoid the negative effect caused by step-by-step transmittance of information and the increasing disparity of information, so as to change the uncertainty in the supply chain management into something certain. In fact, it is rather difficult to keep the whole situation under control and solve all the problems through the practice of a single strategy. In order to achieve a desired effect, other strategies should be taken cooperatively. During the first two years of building the factory, Jilin COFCO Coca-cola Beverages Co., Ltd on the one hand used the advanced experience of purchase management from superordinate companies for reference and on the other hand sought for some other practical purchase strategy step by step. Those different types of strategies are taken according to different situation and supplement each other with flexible purchase strategy, which achieve a certain effect. The other accessorial strategies are as follows: First, group purchase strategy: Coca Cola Co., Ltd of Chinese Food with its headquarters in Beijing owns four manufacturing factories and has the convenience of achieving economies of scale. Second, outsourcing strategy: the consummate design of management flow of purchase outsourcing can help outsourcing enterprises to better protect their own interest. During the process of management of purchase outsourcing, Jilin COFCO Coca-cola Beverages Co., Ltd has paid great attention to the control of time schedule and the dynamic supervisal because purchase outsourcing with its certain advantages can increase the recessive cost and the morality risk.Third, Purchase subsection strategy: in order to make sure the production and operation activities go on successfully and that supply cost be reduced as much as possible, the strategy of supply subsection or strategy orientation should be taken to manage the purchase and supply activities. And two factors must be considered when we analyze the subsection: one is the degree of risk involved in supplying the market; the other is the ratio of the cost of purchasing the goods to the value of it. As far as Jilin Coca Cola Co. Ltd of Chinese Food is concerned, these accessorial strategies can function with an immeasurable effect under proper time and proper background. Since its building up to now, Jilin Coca Cola Co. Ltd'of Chinese Food's production method so far has changed: from the initial production according to storage to production according to pieces to production according to piece design. Accordingly, the company's approach of purchase management has also been reformed: from the initial fulfillment of supply to the present purchase management with its characteristics of dynamics and flexibility. The trend of purchase management is group purchase management, which tackles the problems in the purchase process with the group's strength and wisdom. Flexible purchase is derived from on-time production, and it is the gradually improved to eliminate the storage and the unnecessary waste. The practice of flexible purchase strategy changed the purchase from storage purchase into order purchase. It also makes the usual purchase management the exterior resource management and the usual business relationship the strategic cooperative relationship. It can be seen that flexible purchase strategy has helped Jilin COFCO Coca-cola Beverages Co., Ltd reduce its cost and reinforce its overall competitive strength. However, no matter how good the strategy is, it can be confined by the participant factors such as time and place. For example, the...