The Research Of Procurement Cost Anagement For F Company

With the continued appreciation for RMB, rising raw material prices and laborcosts spending, growing competition between OEM (Original EquipmentManufacturer) companies, reduce the procurement cost is become more and moreimportant. Procurement cost control is the key to whether a company can profit, it isnot only affect the company’s management decision, but also related to the survivaland development of the company. Procurement cost control is mainly manifested inavoiding unnecessary costs, reducing the necessary cost and getting additional costbenefit.We treat F company’s Y Business Unit as analysis object, and by classifyingprocurement of materials, to decompose different types of materials procurementprocess with the method of Work Breakdown Structures, to consider which involvedin the process of logistics mode, trade terms, payment terms, trading currency, andthen using the theory of project cost management, combining with the actual situationof company, to analyze the feasibility of each reduce procurement cost plan, finallychose the plans of logistics and warehousing optimization, improving the paymentterms, quarterly cost down, transferring the loss which caused by appreciation of theRMB, and recycle packaging materials and so on.In reducing the purchase cost of scheme selection, Y company not only considerthe traditional method, meanwhile combined with the actual situation of the companyitself and fulfill social responsibility requirements, but also make full use of theresources of the Business Group to innovate the method of reducing procurement cost.After implemented the plan of reducing procurement costs in2012, Y BusinessUnit avoid the loss of1.653million Yuan for appreciation of the RMB, reduced theannual total purchase cost9.648million Yuan, reduced percentage is up to6.4%, it’ssuccess to achieve the objective of reducing procurement cost which setting bycompany.This paper is provides an instance for OEM company’s procurement costmanagement, also provides reference for other types of companies to reducepurchasing cost.