LN Group's Procurement Management Internal Control Research

Under the Chinese "New Normal" economy, economic growth shifting has led to macro economic slow down dramatically, so all enterprises managements are facing this severe situation. On the other side, government regulations are focusing on suppliers innovation, confirming the authority of state-owned enterprises’board, the pilot project of mix-owned enterprises etc; giving rise to state-owned enterprises to acquire more autonomous rights for reform and innovation. All state-owned enterprises are challenged by both the macro economy and government regulations, but it also brings opportunities as well. The real estate business is interrelated closely with Chinese economic development, along with the pressure from both macro economic environment and control policies for real estate, there are few key issues to solve:high inventory, low confidence, unbalanced development and increased concentration etc. The small and medium-sized real estate enterprises try to survive under this new severely market environment. The real estate purchasing management plays a significant role in the value creation and risk prevention, it has been became the new concerns for the small and medium-sized real estate enterprises to increase their competitiveness. At the same time, for state-owned enterprises, focusing on purchasing management will also help to protect the security of property and the integrity of staff.LN is a State-owned diversified group of companies, its real estate business is belong to small and medium-sized scale in the real estate industry market. During "The thirteenth Five-Year Plan", LN group’s core value is to be a "public, professional, quality, leading" real estate development operators and new energy operations investors. But the biggest obstruction is the mode of their purchasing management-Low efficiency and high risk. This article is based on the fundamental theories of internal control, giving optimum proposals about organizational structure and responsibility allocation to the enterprise internal environment; recommending improved operational procedures, the management of expert assessment and the vendor management in purchasing control activities; establishing purchasing information platform for purchasing activities and communication to improve the efficiency of the meetings; completing the whole process supervise and complaint investigation in internal supervision, etc.This research is another implement of purchasing management aimed at solving practical issues in the small and medium-sized state- owned enterprises.It’s based on improving the purchasing management of LN group Co, Ltd,and therefore provide more references to similar real estate companies.