Study Of Centralized Purchasing By Supplier Relationship Management

Nowadays, every enterprise is facing with the big issue of leveling up the product quality and cost saving under the fierce market competitions. In order to chasing for high profits, enterprises make huge efforts to enlarge the proportion of sales growth for increasing sales revenue. However, profit leverage from purchasing also can contribute to huge cost savings. Like most enterprises, sales management has been paid much attention, while source of profits from supplier management aren’t well developed. From the operational perspectives, centralized purchasing under supplier managements do beneficial to purchasing cost savings, quality of products and lead time. From strategic perspectives, enterprises can enhance core business by supplier management and promote both relations to achieve the goal by long-term co-operations. Group M will be as example in this thesis to illustrate the cost control by applying centralized purchasing under the supplier relationship management.First of all, this thesis will illustrate the purchasing status and problems in industry gas projects to find out the reason why the purchasing costs maintains so high. Then Group M decides to apply supplier relationship management to centralized purchasing and that method will be deeply described. Subsequently, this thesis also will use analytic hierarchy process to help Group M to select suppliers. According to the specialty of gas industry, Group M will set important indexes to each purchasing parts and weights of each index. Group M can easily identify its favorable suppliers. In addition, applying supplier positioning model can help Group M and suppliers to confirm both positions and implement effective strategy for successful negotiation and cost control. After that, Group M will apply the centralized purchasing strategy. Finally, this thesis will apply these strategy in Group M’s projects. Comparing with the former project purchase, current optimized project purchase can more scientifically help administers to control the costs and discover the remaining deficits during the application.Group M lays emphasis on centralized purchase according to supplier relationship management. This measure optimized the purchasing cost control to obtain the quality-guaranteed parts and enhanced the competitiveness of Group M. Furthermore, This thesis can provide positive references to other enterprises when they meet the same problem of high purchasing cost in the projects.