A Study On The Procurement Cost Management Of The EG Steel Company

EG Steel is the central region of a state-owned medium-sized iron and steelenterprises in the steel industry serious excess capacity, the industry decline in the overallefficiency of the adverse circumstances that difficult. Enterprise value-added products isnot high at the same time, the use of low-cost manufacturing technology has become thekey to survival, to reduce procurement costs. Therefore, this study on EG steel companiesout of the current predicament is of great significance.The thesis introduces the background and purpose of this study, followed based oncontrol theory and the theory of supply chain management, procurement costs of theenterprise procurement costs constitute the composition of the total inventory costs, aswell as to control the important value of the purchase cost of the entire enterpriseefficiency. In the framework of the two theories, followed by an analysis of the mainproblems of the the EG steel companies in the procurement chain, such as part of the costin the procurement, transportation, high handling costs; in holding costs, the cost of funds,space, cost and inventory The cost of risk also exists room for adjustment; total inventorycost can be further optimized, supplier management, there is a lack of uniformity andcontinuity, supplier performance management and performance evaluation method is notreasonable. Then, based on in-depth study of the problem, we found that the current theEG steel company in the procurement cost control management focus on performance inthe two main aspects of the company’s internal procurement management and externalsupplier management. Internal procurement management, institutional settings andprocurement process of the procurement department to adjust and standardize the furtheroptimization of transport routes, to seek an effective way to reduce transportation andhandling costs;, establish the concept of total inventory cost by using the economic orderquantity, find strategies to solve the high cost of inventory holding. External suppliermanagement, supplier performance management needed to be strengthened to optimizesupplier selection evaluation system, and actively cultivate strategic suppliers. Finally, thethesis also hope EG Steel procurement cost management, causing the attention of other iron and steel enterprises in the procurement cost management, establish a scientificsupply chain management and procurement cost control concept and applied to businessmanagement, to solve practical problems.