Cost Management Of The Purchasing & Supplying

With the acceleration of economic globalizat ion and information technology, market competition, procurement is as a front for an independent industry towards a market. Efficient procurement optimization for enterprise operations, control costs, speed up capital turnover and increase management quality and sustained profit is essential. As the economies of scale to promote, share of the business activity greatly increased procurement activities, role of purchasing is promoted to a new level, to procurement to profit as an inevitable requirement for modern enterprises seeking to grow.Procurement and supply is an important step in production and operation activity for manufacturing enterprise, the cost and efficiency have direct impact on enterpr ise profit, development strategy and market share. As a critical value-added step, it plays a key role in whole operation strategy.Procurement and supply cost precised management is to optimize total cost of supply chain, which means enterprise total cost is lower than average social cost, thus creating value for enterprise. Cost control requires procurement department to make feasible purchasing policy and strategy based on cost analysis, and keep the material cost, labor cost and financial cost at the optimal status.This thesis discusses the cost precised management from the typical and critical control points of six procurement steps as procurement strategy, procurement planning and budget, resource and supplier management, stock management, warehouse distribution and procurement information system.The total cost of procurement, in the purchase and supply full cost of the activities that occur in a series of processes, also known as the total cost of ownership, which includes enterprise expenditure on external and internal spending. Internal expenditures including enterprises pay for quality inspect ion costs, storage costs, inventory costs, use of funds, disposal costs, external expenses include not only material procurement costs, logistics costs also include handling and supplier relationship management firm arising from transaction costs incurred.Controlling purchasing costs, is to control, reduce all costs associated with purchasing and supply, including direct and indirect costs. Direct costs here, is the material of the purchase price. Indirect costs, including purchase and supply the amount of capital costs, procurement of material s supply of human resource costs, and so on.Cost of purchasing and supply management is the pursuit of the total cost of supply chain optimal to ask purchasing departments, procurement staff on the basis of cost analysis, study and formulate viable procurement policies and strategies, costs, labor costs, capital costs, procurement of materials supply series occur in the process cost control in the best possible state.This article is actually a handbook on strengthening Enterprise supply management operations, hopes to address the current state - owned enterprises in China's purchasing and supply Department from a cost center into a profit center with some guidance and reference.