| The competition in automotive industry becomes much fiercer due to the globalization and continuous development of economy and technology. As a result, Continental Automotive is facing a huge pressure coming from this fierce competition. In order to enhance the efficiency and competence, purchasing as a key operational function, is requested to have a better performance by the organization. Currently, Continental is using both centralized and decentralized procurement modes, and discussion about choosing the best effective and efficient purchasing mode never ended internally. Establishing a reasonable mechanism to measure purchasing performance, enable the analysis of purchasing performance out of difference procurement modes, is highly important for optimizing purchasing performance.With Continental Automotive as analyzing background, the first step is to analyze the existing problems of purchasing management, go in deep of the KPI of purchasing value, compare the KPI of different procurement modes, and then establish a mechanism for purchasing performance measurement. Furthermore, compare the purchasing performance of centralized and decentralized modes, and make further discussion about choosing purchasing modes, in order to enhance competence and create more value to company. The conclusion is: in most cases, centralized purchasing has a more competitive purchasing performance than decentralized ones; Decentralized purchasing is more flexible and could cover more purchasing cases. Hybrid procurement modes could enhance the performance while meantime keep a proper extent of flexibility, in case the hydration is suitable enough according to the company’s actual status.The purchasing performance analysis under different procurement modes of Continental, contribute to optimize and choose the proper procurement modes. In parallel, it could also be referenced for other functions inside Continental or out of Continental. |
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