Research On Purchasing Management Of SCM Localization Projects At Eaton VG

Since the 21 st century,several fields,such as procurement management,supply chain management,value network management,alliance of buyers and sellers and virtual companies,have unprecedented changes during the past.Dynamic collaboration and network are the key of production and success.As suppliers,above relationships can be established and nurtured through experts of supply management.IT,engineering management,marketing,operation,quality,and finance play a crucial role in exploring value-added partnerships.What's the main reason that the change from tactical purchasing to strategic procurement management and then to the value of network management? Purchasing management has an important impact on the P&L line of a company,which can offset or undermine the efforts of the sales increment via marketing.Besides,purchasing management is a part of the main cost of the financial statements,and supply management and value network management currently have equal or even greater impact in the return on business assets,if compared with other functional teams.However,it seems that Eaton,as a 100-year-old global enterprise,fails to keep up with the revolution of global supply chain,since 2012 BUs including electrical,hydraulic and vehicle,have met big changes.Although macroeconomic downturn led to the impact of stability and development of all works of life,to Eaton itself,the main reason for decline in performance is that there are problems in supply chain management.The most typical example is Eaton Vehicle Group,due to lack of product innovation,slow progress of projects,and high cost of supply chain,Eaton's products don't have enough competitiveness in the market.Although it seems that supply chain department should not take the full responsibility for this issue,the main reason is that Eaton Vehicle Group's supply chain management is still in a relatively backward or even low-level tactical procurement,which making it be difficult for Eaton Vehicle Group to compete with other mainstream manufacturers in the same industry.The capital market is extremely cruel,backward will be beaten,the market can give you one or two opportunities,but there will not be a third chance,the end result is eliminated by the market.One of the core objectives of supply chain management is to reduce costs,but not only by simple and direct negotiation,but by exploring and digging out a better,more comprehensive,win-win solution within the scope of the entire supply chain.In the supply chain management process,purchasers need to control the total cost at suppliers-side,which requires supply chain department to improve internal position and to evaluate and optimize the total cost of the supply chain.Finally,purchasers need to find solutions to enhance the company's products in the market competitiveness,through reducing the cost and increasing efficiency.