Raw Material’s Purchasing Cost Control At HC Suzhou CO.

With the deep reform of China’s economic system, the competitive advantage ofChina as work factory is continuously weakening. In the past, low cost is the mainweapon for "China manufacturing" to win in the international competition. Now, becausethe cost increase of raw materials, energy, land, manpower and environmental protection,manufacturing enterprises in China are facing more and more fierce competition andchallenges. If the enterprises want to survive, they must control the product costthoroughly. In manufacturing enterprises, the purchasing cost, which usually accounts for ahigh proportion of product cost (40%-70%), is one of the main factors to determine theprice level of the product and its competitiveness in the marketing. The purchasing costcontrol has become an increasingly important factor that impact to the enterprise profits;affect the entire enterprise’s competitiveness and development. Therefore, to improve theenterprise purchasing cost control methods will also be the focus of one company’s work.The object of this research is HC Suzhou Company, which is a typical manufacturingenterprise. Its purchasing cost of raw material accounting for the total cost of the wholeenterprise is fairly large in proportion. Effectively control the raw materials’ purchasingcosts of enterprises and make it continuously decline can help the company to improve itscompetitiveness in the marketing by reducing the product’s cost. Also it can help thecompany back to smooth operation as it improves its profit.The significance of the research is to help HC Suzhou company to improve the rawmaterials’ purchasing cost control by using the value chain, cost control and purchasingmanagement theory. Combined with the status of current HC Suzhou Company’s rawmaterial purchasing cost control, it uses the value chain theory to analyze the existingproblems of raw materials’ purchasing cost control at the product’s developing and massproduction stage, then use the purchasing cost control theory and methods to improve those related problems. Finally through those methods’ implementation, it really helps to reduceHC Suzhou Company’s losses, enhance firm’s competitiveness in the market and help itsurvive and keep sustainable development.