A Research On Purchasing Performance Measurement System Of Raw Materials: Empirical Evidence From H Company

With the process of globalization, modern corporations are facing fierce competition especially for manufacture enterprises within building materials industry due to both their decreasing market needs and increasing experienced costs. Hence, broadening sources of income and reducing expenditures have been emphasized by plenty of manufacture enterprises in order to enhance their comprehensive strength. In terms of reducing expenditures, purchasing management is one of the most significant aspects for modern enterprises. H company is a domestic manufacture company of building material industry, which also in dire need of enhancing their scientific management of purchasing since various flaws within company need to be dealt with like limited feedbacks of purchasing effects are available and the incomplete purchasing processes.This paper intends to establish a practical purchasing performance measurement system based on scientific theories and methods by combining H company’s defectiveness and their potential needs for purchasing management. The remainder of this paper is organized as follows. Firstly, the fundamental theory of purchasing performance and their measurement system are introduced briefly, moreover, H company’s current situation and industry analysis are presented with case study in this section as well. Next, H company’s purchasing performance measurement system is introduced after scientific research including literature summarized analysis, performance measurement standard and benchmarking. The scientific purchasing performance measurement system is ultimately set up by combining four latitudes that include purchasing efficiency, purchasing costs, purchasing quality and legitimacy and 14 specific performance measurement indicators which is stated in Key Performance Indicator. According to the feedbacks of 12 pieces of experts’ questionnaire, which is based on Group decision-Analytic Hierarchy Process and the feedback of 8 pieces of experts’ qualitative index evaluation questionnaire, which is on a basis of Fuzzy Comprehensive Evaluation, the conclusion that the effects of purchasing for H company is good is gained. Finally, on the basis of scientific theory and the practical experience of building materials industry, suggestions related to purchasing management are proposed directly towards the potential problems that are suggested through interview.