Research On Purchasing Cost Control In Company A

With rapid development of mobile Internet， traditional sales channels areimpacted intensively by E-commerce enterprises. Price of civil grade air conditioningis gradually getting more transparent and becoming lower than ever before. Incontrary， the rising procurement cost of appliances manufacturers depletes theprofit margins so that how to control the costs， especially the procurement costwhich weaken the profit with high possibility in air conditioning industry， becomes avital premise for survival and continuous development amongfierce market competitions.Company A is an air conditioning manufacturer whose procurement cost took up90%of its total sales expense. To lower the costs which were incurred in purchasingprocesses related to its going concern. In this essay， we made research on companyA’s business scenarios on controlling procurement cost with related managerial toolsand theories.Systematical analysis is focused on the structure of procurement cost， currentstatus of procurement cost control activities and other existed problems in order togenerate detail strategy of optimization on key aspects of procurement， includingsupplier qualification and evaluation， procurement tenders and price verification.Research was begun with data collection on site to master basic information aboutpurchasing function in company A. Through analyzing business data we find out themain reason for the high cost of procurement. AHP method is applied on improvingthe performance of supplier qualification and evaluation while method of comparativeanalysis is used on formulating purchasing price verification model. Meanwhilee-tendering and supply chain collaborative procurement is introduced as valid meansfor procurement cost control.Modern supply chain management theories are applied with comparative analysistools to analyse the procurement cost of company A. The major achievements includethe following points.1. Building up the new supplier evaluation system which aidsourcing decision via scoring.2. Base on the features of company A， to establish acost control mode and optimization procedure via collaborative supply chain.3.Introduction of E-tendering and E-verification.