Study On Internal Control Related To Indirect Sourcing Of An Enterprise

Indirect Sourcing, as a brand-new organizational function, has been gradually merged into the operational management of enterprises. The amount of Indirect Sourcing makes up more than 25%of the overall amount of an organization. However, because the individual amount of Indirect Sourcing is small, the categories vary a lot, supply pool is huge and suppliers'qualifications are not at the same level, the frequency is not regular and not relevant to the main business stream, compared to Direct Sourcing, Indirect Sourcing has been ignored for a long term. Some organizations even don't have dedicated department or personnel responsible for Indirect Sourcing. The overall interest will be sacrificed if the procurement of indirect materials and services lack monitoring or control. In fact, the establishment and enhancement of Indirect Sourcing function contributes greatly to cost reduction of an organization, meanwhile ensuring the stability of the daily business operations. Therefore, more and more enterprises are starting to attach importance to this function. Nevertheless, due to the impact of the internal and external environment, it's imperative for every business manager to be concerned about and solve the problem how to well manage such a function in the face of all the difficulties.Facing the financial crisis of the world, every enterprise is trying their best to control cost and make revenues, and enhancing indirect sourcing efficiency is becoming the new profit origin. This thesis is generated under the background, studying on the development and regulations of internal control, domestic and international, bringing up the architecture of internal control, and, based on the real Company JC's internal control practice, exploring the solution to problems of indirect sourcing. It's expected that this thesis would be good reference for future development of indirect sourcing.As for study methodology, this paper adopts the combination of generic and specific study, theoretical and empirical study, making in-depth investigation of the subject. The paper consists of 6 chapters. Chapter 1 is introduction, putting forward the background and cause of the subject, giving relevant definitions, establishing study methodology, route, and objectives; chapter 2 studies the development of internal control and analyzes and appraises the regulations of China and in the world, building up solid foundation for the architecture of internal control related to indirect sourcing; chapter 3 expatiates the characteristics of indirect sourcing, analyses the issues lying in internal control of indirect sourcing, emphasizing the importance of enhancing internal control of indirect sourcing; chapter 4 sets forth the architecture of internal control of indirect sourcing in association with the prevailing internal control regulation of China and in the world, aiming at lowering the risk in this aspect, improving an enterprise efficiency and competiveness; chapter 5 is case study, taking Company JC as an example, pointing out the advantage and disadvantage, and making reforming proposals; chapter 6 concludes the content in the previous 5 chapters, reinforcing the importance of enhancing the internal control of indirect sourcing, pointing out the shortcomings of this paper, and putting forward the suggested points for future study.