Research On Optimization Of A Compnay Indirect Procurement Management

Since 2015 macroeconomic downward pressure increases, the manufacturing industry as a pillar to China’s economy is facing more pressure of industrial upgrading. While enterprises focus on product strategy, marketing strategy, they also pay more attention to the management transformation. And the procurement transformation is the key area in the management transformation since procurement is closely related with the company long-term strategic goal. Through the implementation of procurement strategy, enterprises may reduce operating costs, improve operational efficiency, which is critical to the survival of the company. Indirect procurement is usually neglected by senior management as the function is executed by business departments in the past. As enterprises gradually realize its strategic role, more enterprises begin to focus on indirect procurement, which may help to ensure the cost competitiveness, quality of products or service and timely delivery as indirect procurement will bring value add to business development.Based on A company status, the paper analyzes the indirect procurement management as well as the current key issues we face. After analysis, the proposal the optimization solution is made based on theory of indirect procurement management, procurement organization model, process re-engineering etc. The paper is divided into five parts. The first part introduces the background of the topic, the significance of the research. The second part is the introduction of related research and theory. In the third part, the paper analyzes the current situation of A company and indirect material management, and points out the existing problems based on work experience and observation. The fourth part, the optimizing proposal is made in terms of procurement organization structure and procurement process. From organizational perspective, company shall evolve from dis-centralized operation to centralized operation; from procurement process prospective, company shall develop the process matching with centralized operation model.. The fifth part, the paper utilizes AHP model for indirect supplier evaluation and selection, four-quadrant matrix as well as simplified standard for preferred supplier strategy and enhancing the eAuction implementation.. The sixth part is the conclusion and outlook, which summarizes the full text and points out the applicable type and the future research direction.