The Research On Purchasing In Madison Company Based On Supply Chain Management

With today's economic globalization and the rapidly changing business environment, people's understanding of the procurement has undergone fundamental changes. Procurement management is not only seen as an operational function at the level of management, but rather participation in the decision-making an integral part of corporate strategy. Procurement is no longer just ways to reduce costs, but rather an important value-adding process. In order to enhance their capacity and creativity, the enterprise's management began to change from "vertical integration" to "horizontal integration", and the competition among enterprises and enterprises is to upgrade the supply chain and supply chain competition. Purchasing Management as a modern enterprise management and supply chain plays an important role, which results into changing the mode of operation. The Purchasing Management of Madison Company is facing cost pressures rising, the quality problem, delivery time and new product introduction (NPI) to the market, which results into resolving the problems existing in Madison business procurement management.This paper reviews the procurement-related documents, combined with practical experience in procurement of Madison Company. This paper uses the theory of supply chain management, Lean Thinking, the best practices of Toyota Production System (TPS), and procurement outsourcing theory to analysis Madison Purchasing Management status and problems. As to these issues, this paper put forwards several solutions as following:following up Total Cost of Ownership (TCO) optimal procurement Model, JIT procurement, Quality Control at source, information sharing platform composed and reduction of the supplier's database, etc. To change organizational structure and process improvement is proposed to eliminate the non-value-added process in supply chain. To establish the information platform is to fully share information on procurement in the supply chain to eliminate the "bullwhip effect". As to inventory control, this paper uses the break-even analysis to determine Economic Of Quantity (EOQ) to get good parts matching rate. For material classification, this paper uses the Model from Olsen and Ellram on purpose of figuring out the detailed strategy of purchasing for different materials accordingly. And this paper introduces how to qualify or select the suitable suppliers based on analytic hierarchy (AHP) and to develop the strategic partnership to get the lowest total cost of ownership and reduce the risks of continuously getting goods and services for sake of responding quickly to market needs.The research of procurement management in Madison provides a good reference and value for other companies.