Materials Purchasing Strategy In The Context Of OEM & ODM In Company V

The business model of company V has both Original Equipment Manufacturer(OEM)and Original Design Manufacturer(ODM).The company mainly produces series of waterproof bags.The factories include the head office where is in Taiwan,Zhongshan factory in Guangdong,and Luohe factory in Henan.However,the companies are independent and cause many unnecessary wastes,such as separate material purchasing of different factories,purchasing repetition,and being unable to negotiate with raw material suppliers for the price which depends on quantity.Thus the cost of procurement is fiercely increased.This thesis first reviews the production characteristics and purchasing models of OEM and ODM.Moreover,it analyzes the problem of purchasing process that exists in company V by teasing out its production process,purchasing procedure,and internal business procurement model of OEM and ODM.Then a project team is set up to optimize procurement process with the use of business process reengineering.Considering material purchasing characteristics of OEM and ODM and supplier requirements,the process of group purchasing strategy of company V is optimized.The effects of nonconforming material rate,ordering time,purchase unit price,and purchase term before and after optimization are also provided to show the effectiveness of the group purchasing strategy.Under the coexistence of OEM and ODM,company V substantially reduces the cost of procurement and then lower the finished product price and enhance the enterprise competitiveness.Many small and medium enterprises are facing industrial transformation and upgrading.As the enterprises gradually transform OEM into ODM or both coexistence,the research of this thesis can contribute to reduce the cost of enterprises' internal procurement so that it can provide this type of enterprise upgrading to reduce the cost as a reference.