Research On Indirect Sourcing&Procurement Management Of J Company

Since mid of20th century, the procurement organization, which can help enterprise to control the total cost, improve operation efficiency, formulate suppliers relationship, has been attracted more and more attentions.And relevant theory and research has been developed to the level of company strategy. Till now, two new issues about the procurement management, global purchasing and indirect material procurement, has been become much popular. The indirect material procurement management, as a new tool of cost controlling, got attention since end of last century. The cost of indirect material procurement increased as enterprises growing, especially in some multi-nations companies. As direct material procurement management’s theory and tool becoming much matured, more and more companies try to utilize indirect material procurement management to decrease the operation cost and to form company’s strategic competence advantage.This paper documents the problems in an indirect material souring and procurement of J Company, and discusses the possible improvement proposals and recommendations on how to optimize indirect material sourcing and procurement management. The study was commissioned by J Company, the case company.Through study of J Company indirect material sourcing and procurement, the author comes up with several proposals on improving its management, which includes setting cost down objectives, optimizing the indirect purchasing managerial structure and working flow, enhancing the indirect material purchasing centralization, clarifying the responsibilities of cross-divisions and improving the supplies management.