Research On Reducing Procurement Cost Of Communication Chip Of Company

Purchasing cost control is an important area in modern procurement management. Purchasing cost is around60%of total operation cost,1%reduction in purchasing cost will increase the variable margin by10%. Company A is a world leading telecommunication equipment provider, this paper analyzes the cost issues of telecom IC in company A, provides multiple solutions in new product design process, supplier management and inventory management. The execution of these solutions significantly reduce the purchase cost and increase the supplier management level. The study has an important reference to other components in Company A and other companies.Chapter one introduces the background and significance of the theme, introduces company A’s cost pressure, how telecom IC plays in it, the structure and content.Chapter two explains the relative theories will be used in the Paper.Chapter three analyst the cost issues of telecom IC in company A from three aspects:project design process, supplier management and inventory control.Chapter four gives solutions of the cost issues in Chapter three.Chapter five is conclusion and expectation.