Methods of purchasing cost control

Controlling the procurement cost is very important to the business performance of an enterprise, so what are the methods to control the procurement cost? Come and have a look with me!

First, establish and improve the procurement system and do a good job in the basic work of procurement cost control.

Procurement involves a wide range, mainly dealing with the outside world. Therefore, if enterprises do not formulate strict procurement systems and processes, not only will the procurement work be disorganized, but it will also provide a hotbed for the behind-the-scenes operation of procurement personnel. To improve the procurement system, we should pay attention to the following aspects:

1. Establish a strict procurement system. Establishing a strict and perfect procurement system can not only standardize the procurement activities of enterprises, improve efficiency, put an end to wrangling between departments, but also prevent the bad behavior of procurement personnel. The procurement system should stipulate the application for material procurement, the authorization authority of the licensee, the process of material procurement, the responsibilities and relations of relevant departments (especially the financial department), the provisions and methods of various material procurement, quotation and price approval, etc. For example, it can be stipulated in the procurement system that the purchased items should be inquired, compared and negotiated with suppliers, and then suppliers should be selected, and the selected suppliers and their quotations should be filled in the purchase requisition; It can also be stipulated that purchases exceeding a certain amount must be accompanied by more than three written quotations for the financial department or internal audit department to review.

2. Establish supplier files and access system. The official supplier of the enterprise should be put on record. The supplier file should include not only the number, detailed contact information and address, but also the payment terms, delivery terms, delivery period, quality grade and bank account number. Each supplier file should be filed after strict examination. The procurement of enterprises must be carried out among the archived suppliers, and the supplier files should be updated regularly or irregularly, and managed by special personnel. At the same time, it is necessary to establish a supplier access system. Suppliers of key materials can only enter after the joint assessment of quality inspection, materials and finance departments, and if possible, they should go to the supplier's production site for assessment. Enterprises should formulate strict assessment procedures and indicators, and score the assessment questions one by one. Only those who meet or exceed the grading standards can become file suppliers.

3. Establish a price file and a price evaluation system. The purchasing department of an enterprise should establish a price file for all purchased materials, and the quotation of each batch of purchased materials should be compared with the price of the archived materials first, and the reasons for the price difference should be analyzed. If there is no special reason, in principle, the purchase price cannot exceed the price level in the document, otherwise a detailed explanation should be made. For the price of key materials, it is necessary to establish a price evaluation system, and the relevant departments of the company will form a price evaluation team to collect relevant supply price information regularly, analyze and evaluate the existing price level, and evaluate and update the archived price files. This review can be conducted quarterly or semi-annually as appropriate.

4. Make the standard purchase price of materials, and reward and punish the purchasing personnel according to their work performance. The finance department should regularly set the standard purchase price of key monitoring materials according to the changes of the market and the standard cost of products, so as to encourage purchasers to actively seek sources of goods, shop around and continuously reduce the purchase price. The standard purchase price can also be combined with the price evaluation system, and reward and punishment measures can be put forward to reward the procurement personnel who have completed the task of reducing the procurement cost of the company, and analyze the reasons for the procurement personnel who have not completed the task of reducing the procurement cost and determine the punishment measures.

Through the above four aspects of work, although it is not possible to completely eliminate the black-box operation of procurement personnel, it does have great results in improving procurement management, improving efficiency and controlling procurement costs.

Second, ways and means to reduce material costs

1. Reduce the purchase cost through the choice of payment methods. If the enterprise has abundant funds or the bank's interest rate is low, it can use cash transaction or cash on delivery, which can often bring a large price discount. In addition, special attention should be paid to the selection of imported materials, foreign exchange currencies and exchange rate trends. For example, last year, our company imported production lines from the Netherlands. Due to the weak trend of the euro, we chose the euro as the payment currency (our company's foreign currency deposit is US dollars), thus reducing the equipment cost.

2. Grasp the timing of price changes. Prices often change with seasons and market supply and demand. Therefore, buyers should pay attention to the law of price changes and grasp the procurement opportunity. For example, the price of polycarbonate (PC plastic), the main raw material of our company, was 2.8 USD/kg at the beginning of last year, but it rose to 3.6 USD/kg in August and September. If the purchasing department can grasp the opportunity and purchase quantity, it will bring huge economic benefits to the enterprise.

3. Contain suppliers through bidding. For bulk material procurement, an effective method is competitive bidding, and the bottom line price can often be obtained by comparing prices among suppliers. In addition, for the same material, we should find more suppliers, and through the selection and comparison of different suppliers, we can make them contain each other and make the company in a favorable position in the negotiation.

4. Buy directly from the manufacturer or form an alliance to order together. Ordering directly from manufacturers can reduce intermediate links and procurement costs, and at the same time, the technical service and after-sales service of manufacturers will be better. In addition, several qualified similar manufacturers can form an alliance to order together, so as to overcome the contradiction that a single manufacturer can't get more preferential treatment because of the small order quantity.

5. Choose reputable suppliers and sign long-term contracts with them. Cooperating with honest and reputable suppliers can not only ensure the quality of supply and timely delivery, but also take care of their payment and price, especially signing long-term contracts with them, which often leads to more preferential treatment.

6. Fully investigate the purchasing market and collect information. To achieve a certain level of procurement management, enterprises should pay full attention to the investigation of procurement market and the collection and collation of information. Only in this way can it fully understand the market situation and price trend and put itself in a favorable position. Conditional enterprises can assign special personnel to engage in this work, and form regular research reports.

Three, the implementation of strategic cost management to guide procurement cost control.

1, estimate the cost of products or services of suppliers. In our previous procurement management, we only overemphasized the internal efforts of the company. In order to truly control the procurement cost comprehensively, it is not enough to rely solely on one's own internal strength. We should know the cost status of suppliers. Only in this way can we take the initiative in the price negotiation. You can get more useful information by visiting the supplier's facilities, observing and asking appropriate questions; Even for the sake of cooperation, suppliers are explicitly required to provide relevant information truthfully to estimate the cost of suppliers. After estimating the supplier's cost and knowing which materials account for a large proportion in the cost, you can arrange some negotiations to make yourself more favorable in price and strengthen communication and contact as much as possible, that is, ask the supplier for advice on ways to reduce the cost of bulk materials, thus reducing the material cost of your own enterprise. In such negotiations, we should always strive for a win-win situation. To establish a long-term cooperative relationship with suppliers, you can't let suppliers suffer in the negotiation.

2. Analyze competitors. The purpose of analyzing competitors is to make clear our cost compared with our competitors. Where are our strengths, the strengths of our competitors and the roots of our strengths and weaknesses? Are they because of the strategic differences between us and our competitors, or because of their different environments, or because of a series of reasons such as internal structure, technology and management. Then, starting with eliminating disadvantages and maintaining advantages, we will formulate strategies to beat our opponents in the competition. Through the analysis of competitors, find the direction of efforts and stay ahead of the competition.

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