A Study On The Procurement Modes Improvement For S Company

Procurement occupies very important position in enterprises management,which performance is directly related to the result of their economic benefit,or even affects the core competitiveness of the enterprise.A company group which adopts hierarchical management usually works out its procurement management policies based on its primary business,and distribute different decision-making power to each hierarchy based on the procurement amount of payment.This Procurement Management System is meant to be a balance between profit and efficiency,with risk management also in consideration;it is meant to be a transparent and open procedure,by which the companies under this group can select a suitable supplier so as to lower down business cost,raise the efficiency and quality of procurement.There are commonly two types of procurement modes: bidding procurement and non-bidding procurement.Under normal circumstances,for the procurement of larger amount or greater importance,the decision-making power for selecting procurement modes is collected to upper hierarchy,and the method selected tends to be bidding;and for that of smaller amount or less importance,distributed to lower hierarchy companies,and the method selected still tends to take bidding as priority.However,the result of such implementation may not be as effective as it was expected.In a company group with diversified business,the procurement mode that suits for core business may not certainly suit for non-core business,thus the practice of unified mode of procurement management may not achieve the desired result,and sometimes there may even be a considerable gap between actual result and expectation.This paper attempts to use S Company as an example,study the existing problems in the selection of procurement modes in company group,and put forward a feasible improvement scheme.Firstly,the current situation and existing problems of procurement modes management for S company are analyzed on the basis of reviewing the literature and field research,combined with the relevant theory of supply chain management.Secondly,aiming at the main problems of procurement modes for S company,modified procurement modes are put forward based on Total Cost of Ownership(TCO)analysis method and Kraljic Portfolio Matrix(KPM).At this stage,the annual summary of goods purchased by S company is listed with categories and amount,then basic KPM is applied to classify the goods into 4 matrixes.Further,the TCO method is applied to attribute extra cost factor to the goods,which leads to a revised KPM,and then a matrix for S company's supplier is formed.Based on the above analysis,a procurement methods improvement scheme is made to enhance the efficiency of procurement and select suitable suppliers,and followed by the introduction of Supplier Relationship Management(SRM)to monitor and maintain the practice effect of the improved procurement modes.Finally,the paper presents summarization and prospects.It is hoped that the research of this paper will help S company to improve its procurement efficiency and economic benefit through the improved procurement mode,select suitable suppliers and enhance the core competitiveness of the enterprise and provide references for similar enterprises.