Strategy Analysis Of OA Company APAC Indirect Material Purchasing

Cost cut is always one of the most important parameters in a company performanceevaluation. Nonproductive Purchasing (indirect material purchasing) includes capitalinvestment purchasing，just like construction project，machine equipment investment；productive related purchasing, just like equipment purchasing and maintaining, spare parts;logistics related purchasing including warehouse rental, loading and unloading, repacking,transportation service(not including the direct cost for transportation), administration andmarketing service related purchasing and energy purchasing. The nonproductive purchasingcost will be increasing in phase with the company size growing. Coming to the multinationalcompany the contribution rate for the whole company cost come from nonproductivepurchasing cost will be much higher; at the times of economic depression multinationalcompany who costs cut for even one dollar legitimately put nonproductive purchasing in theirfocus attention.Considering the low purchase volume for each order, diversity of purchasing materialand service, extensive locations and industries coverage, usually for multinational companythe global and regional consolidation and industrial optimization strategy is used to managenonproductive purchasing. In the process of implementation for this strategy the inherentdisadvantage of nonproductive purchasing will always been the obstruction. Thisdisadvantage includes the unstable purchasing frequency, unpredictable requirements from theproject and production line emergency; pooling bottleneck brought by territorial limitation,special industrial policy in different countries, and special market monopolize.Indirect materials purchasing department of OA Company APAC has been chosen as theresearch object for this thesis. OA Company is one of the two leading light manufacturers inthe world. In the2011financial year (until30September), it achieved a turnover of€5billion.The company, which is very much internationally oriented, OSRAM AG APAC has around20,000employees, supplying customers in20countries worldwide from its11productionsites in6countries. This thesis has analysis the indirect materials purchasing strategy base onthe data of OSRAM AG APAC, gives out an optimized regional purchasing strategy forIndirect Materials Purchasing in OA COMPANY APAC. This strategy gives out a multiplesolution for the different subcategory of indirect materials purchasing, included industrialServices purchasing, spare parts purchasing, facility management purchasing, administrationand marketing service related purchasing, technical service related purchasing, and energypurchasing. This multiple strategy has been proved as an effective solution by many successful cost cut project in OA Company APAC. Because of the implement of this strategyO-APAC Indirect material purchasing department has met the cost cut target in fiscal year2012, and has an optimized forecast report in fiscal year2013.