FT Auto Company's Aftermarket Parts Procurement Cost Estimation Study

With the increasing demand,the automotive industry has developed the rapidly in recent years,automotive products have become very popular,and the competition between various OEMs is becoming more and more fierce.Many OEMs have even surplus production capacity.Among the competing brands and models with similar configurations and functions,some of the key factors that influence consumers' final choice include brand,selling price,performance,quality,appearance,after sales service and maintenance cost.The parts selling price in after-sales market will directly affect consumers' satisfaction with after-sales service and maintenance costs,which will affect the reputation and branding of the automotive company.Most of the OEMs parts,whether they are used in vehicle manufacturing or aftermarket,they are mostly purchased from the supplier.Therefore,the level of cost control of after-sale parts will affect the price and profitability of original after-sales parts sold by OEM in the after-sales market,as a common and effective method for analyzing cost,cost estimation plays an important role in the after-sales procurement process.This article takes the after-sales parts procurement department of FT Automotive' s Asia-Pacific region as the research object,through elaboration of the concept and control methods of the supply chain and procurement costs,formed a general understanding of procurement costs.Combined with the company's own situation and industry characteristics,it analyzes the status and characteristics of after-sale parts procurement cost and cost estimation activity,by sort out the status quo and problems,proposed an idea and solution to improve the current after-sales parts procurement cost estimation issue.Based on the analysis results,which is the cost estimates of parts,by comparing with the supplier's quotation breakdown,to identify how much of suppliers' potential price reduction opportunity in where,to better control the purchase cost.And through a specific case,identified the part's manufacturing process at the supplier,confirmed resource consumption needed by after-sales part operation on supplier site,based on the resource consumption to generate cost estimation on after-sales part,according to the cost estimation value to help procurement department to negotiate with supplier to reach a reasonable price.It is hoped that through the research in this article,the company's after-sales department can realize that the cost estimation of the parts produced by the supplier through the Activity Based Costing(ABC)can identify opportunities to reduce purchasing costs,help optimize the purchasing cost of after-sale parts,and thus play a certain practical guiding significance.