Procurement Strategy Research Of Multinational Companies

With the continuous development of the world economy and increasingly intense competition in the world, multinational companies grow faster and faster and they are facing Intense Competition, so they have to fully tap the potential to improve the market competitiveness. Jack. Welch who is GE’s former CEO think that there are only two departments can create the profit in a company, one is sales department, and the other is the purchasing department. It tells us that it will be helpful to strengthen the management of procurement because it can create the profit. So it is significant important to strengthen the management of sourcing, reduce the cost of enterprise, and develop good relationship with suppliers and it is also one part of the enterprise supply value chain and will help enhance the core competitiveness of the enterprise.GE Oil & Gas which is one of GE’s big business units grow up gradually by continuous acquisitions. The merger of the company’s sourcing concepts and procurement process are different which lead to group grew but organization is not optimized. We need to implement some sourcing strategies integrated with sourcing team to reduce the cost, develop supplier relationships and enhance the overall competitiveness of the oil and gas group and this becomes urgent and important task.In this thesis, firstly we state the procurement management strategy and expound the importance of purchasing management of the enterprise and the theory of several important procurement strategies. Secondly, we analyze the advantages and disadvantages of the company with SWOT and analyze current situation of the GE oil and gas as well as the current problems in the procurement. To solve the existing problems, we integrate theory with practice and put forward some concrete methods of procurement strategy optimization including the selection of suppliers and control, purchasing negotiation, bidding, etc. Finally it is proposed value-based sourcing. We hope that it can bring value for the enterprise through Value-based sourcing and help strengthen the company’s advantage. The purpose of this thesis is that through these improvement countermeasures, we can help GE oil and gas to reduce costs, optimize the purchasing department and the enterprise internally, enhance enterprise competitiveness and finally help GE oil and gas become the most competitive equipment supplier in oil and gas industry.