Chinese Enterprises And International Supply Chain Of TNCs

Purchasing, as a very practical job, never gets enough attention to its potentials for helping enterprises developing their business, especially in China, when many multi-national companies come here and China becomes their important procurement base in their global supply chain. In China, the purchasing department does their jobs with the order from the boss. Thus, purchase only means buying something. Although the cheap human resource allows Chinese enterprises ignore the function of purchase in our current rapid economic development, recognition of purchase again should be another opportunity for Chinese companies especially when they will face more intense competition in knowledge-based economy.Purchasing is very important in the supply chain management. Multi-national enterprises brought a lot of experiences and methods of advanced purchasing management to China with them. This thesis is based on the SCM theories and trying to show the basic concepts and theoretical background of purchasing. In using different purchasing tools, we could set up different strategies for different purchasing items. When we know the factors multi-national enterprises will consider for their purchasing decisions, we could better analyse their strategies behind the purchasing actions. In doing this from several directions, the thesis tries to recover the profitability potential of purchasing, which most multi-national companies depend on to develop themselves. Actually, this is also a valuable reference for China companies to understand the global purchasing supply chain theoretically and practically, so that they could make a better connection with multi-national enterprises in purchasing side and try to set up strategic partnership in future.In business world today, purchasing is called one of the only two departments, which can generate profit. The other one is sales. But with comparison to sales, the cost saving in purchasing could be seen directly as profit. And in a world that purchasing value mostly accounts for about 60% of sales in world market, purchasing department has a special position in any company. It's critical.When we are realizing this, it's advised to the companies and government from their sides respectively that Chinese companies should keep close step with international SCM development and try to get into the world supply chain. When we are cooperating as well as competing withmulti-national companies, Chinese company could gain a lot either from the good practice experiences or the profit and strengthen themselves to compete and win a critical position in the world market.