A Study Of Manufacturing Enterprises Indirect Material Purchasing Management Strategy

The former GE CEO Jack ? Welch said: "Purchase and sale of the company are the only revenue-generating departments, management fees are generated in other sectors." Since the international financial crisis in 2008, companies cannot effectively open source under the circumstances, all have turned to cost control. Supply chain management of raw materials is more scientific and standardized. But indirect materials procurement not previously been given sufficient attention, so we should be re-recognize indirect material procurement’s role and position in the organization.Based on the theoretical study of literature reading,this paper combined with the relevant theoretical knowledge and practical experience,and through the actual investigation and case analysis, the use of strategic sourcing management thinking to study management strategies for a manufacturing company indirect materials procurement and use SWOT analysis their advantage, weaknesses, opportunities and challenges in a systematic and comprehensive analysis. Indirect material procurement for C Company management problems, using Kraljic matrix(also called four-quadrant matrix), the materials are divided into four types: conventional type, lever type, bottleneck type, strategic type. Based on C company’s specific material types, this paper to study the indirect procurement of materials from the following three aspects: optimization of management systems and processes, strategic supplier management, procurement total cost control. In this paper, the main work of process optimization are: design for different material types with different process optimization solutions, and design electronic procurement for the new process node. The main work of supplier management are: the implementation of category management for the current large number of suppliers, the implementation of the reduction and stable supplier strategy, this paper introduces the analytic hierarchy process as a supplier selection method to optimize the supplier selection process. The main work of cost control in this paper are: different material types with different cost analysis methods and strategies, using the latest cost analysis tools – total cost of ownership(TCO) etc., and improved cost control process.The main innovation of this paper is applied the theory of purchasing and supply chain to C Company specific indirect materials procurement management,and has a useful discussion of the analysis to the indirect material purchasing management. Meanwhile this paper draws on mature research results of direct materials procurement, to develop a suitable C’s indirect materials management system, and to provide reference for other companies.