Research on JIT procurement mode of construction enterprises?

What is the specific content of the research on JIT procurement mode of construction enterprises? Here, Zhong Da Consulting will answer your questions.

The implementation and operation of construction projects are inseparable from procurement, which is the basis of production of construction enterprises. According to statistics, construction enterprises should use at least 70% of their sales to purchase raw materials, spare parts and equipment. However, the traditional procurement and management of materials in the construction industry have long had problems such as low cooperation between supply and demand, less information communication and feedback, slow transmission speed, high circulation cost, difficult quality control and weak adaptability. Since the appearance of JIT procurement mode in 1960s, JIT procurement management has become a new breakthrough point for enterprises to gain competitive advantage. It provides a way and method to optimize the procurement mode from the overall (enterprise level) perspective, which is an adaptive change of the traditional procurement mode to the changes in the competitive environment and a special and forward-looking procurement mode. The space for strengthening competitive advantage by improving labor productivity and saving resources will gradually shrink. In recent years, the application of new procurement mode has gradually attracted the attention of construction enterprises. In order to improve the competitiveness, construction enterprises can control the whole procurement process to achieve the purpose of reducing procurement costs, reducing material costs, ensuring material quality and delivery time. Based on this, the choice of procurement mode of construction enterprises has become the focus of attention and research in construction systems in recent years. Because the concept of JIT procurement mode has been introduced into construction enterprises for a short time, the existing research on the procurement of construction enterprises under JIT mode has just started, and the main research is still concentrated in manufacturing industry. Yuan Qingda analyzed the elements of implementing JIT procurement mode in enterprises, and thought that implementing JIT procurement was an effective method for enterprises to reduce costs, improve competitiveness and improve customer satisfaction. Feng Chunhua and others compared the advantages and disadvantages of JIT procurement and EOQ procurement by establishing the difference function model of JIT and EOQ procurement methods, and concluded that JIT model is beneficial to enterprises with high inventory and order costs to reduce inventory and order costs; Qu Huiying studied the JIT purchasing inventory model of single supplier and single demander, and sought the economic order quantity to minimize the total cost of suppliers and demanders. The above research provides guidance for the manufacturing industry to use JIT procurement mode, and also has certain reference significance for the specific application of JIT mode in construction enterprises. Especially in recent years, the continuous improvement of infrastructure and the development of transportation system provide a macro environment for construction enterprises to apply JIT model. However, due to the one-off, diversity and complexity of construction project production, JIT procurement mode with supply as the main research link cannot be applied in construction enterprises. Therefore, this paper introduces JIT mode into construction enterprises, compares it with traditional construction enterprises' procurement, obtains its advantages in procurement, and then constructs the implementation approach of JIT procurement in construction enterprises, so as to guide construction enterprises to implement JIT procurement mode concretely. 1 JIT Compared with the traditional procurement mode of construction enterprises, the traditional raw material procurement of construction enterprises is to purchase materials needed for project construction, such as steel and cement, according to the characteristics of the project and the needs of construction progress. The one-off and uncertain characteristics of construction projects lead to the advanced and irregular procurement of building raw materials. Construction enterprises buy a lot of raw materials for storage before the project starts. With the development of the project, they constantly make inquiries and quotations from many suppliers, and implement one-time short-term transactions with the price as the goal. With the end of the project, the purchase contract is terminated. When a new project starts, re-select a new supplier. This procurement mode only carries out sampling inspection and acceptance when materials enter the site, which can not guarantee the quality of materials. The traditional procurement mode is shown in figure 1. However, the procurement under JIT mode is an order-driven procurement mode, which is different from the traditional procurement mode. These differences are mainly reflected in the following aspects: (1) The goal of JIT procurement is to eliminate non-value-added activities, pursue zero inventory, or minimize inventory. The uncertainty of project construction puts forward strict requirements for suppliers to supply in time, and the ability to supply on time with good quality and quantity has become the focus of supplier selection. (2) Purchasing from the strategic height of the enterprise improves the purchasing consciousness of all employees, avoids the problem of purchasing different projects separately, simplifies redundant institutions and improves the transparency of purchasing. (3) information is highly enjoyed. In traditional procurement, profit is the goal, and neither the supplier nor the supplier knows the other's operation plan. With the end of the purchase, the contract is terminated. In JIT mode, construction enterprises purchase, construction enterprises and suppliers * * * enjoy the production plan and schedule plan, and timely transmit information changes through kanban, so as to improve the adaptability of suppliers and ensure the smooth progress of the project. (4) The responsibility sharing mechanism has changed. The quality of raw materials required for the project shall be guaranteed by the supplier. When the materials enter the site, the supplier will issue a certificate of conformity, and the construction enterprise does not need to conduct random inspection, which reduces the inspection cost and shifts the risk of the construction enterprise. (5) The nature of cooperation has changed. The traditional procurement of construction enterprises is driven by interests, so many suppliers are selected to compare the material prices, and finally the lowest price is determined to sign the procurement contract. As independent individuals, the supply and demand sides cooperate with their own interests as the goal. Under JIT mode, construction enterprises establish long-term strategic cooperative relations with suppliers, aim at the principle of reciprocity, establish the same interests, use advanced management technology and information technology to solve conflicts of interests, and ensure the profit targets of both supply and demand sides. The pair of two procurement modes is shown in table 1. Advantages of construction enterprise procurement under JIT mode 2. 1 Reduce enterprise inventory and improve procurement quality. The basic idea of JIT is that in production and business activities, the part that does not add value to the product or does not add value to the product is an invalid cost, such as the cost caused by the phenomenon of backlog, damage and excessive inventory. Therefore, under JIT mode, construction enterprises regard reducing enterprise inventory as the focus of procurement management. There are three main ways: first, through information sharing, timely transfer project changes to improve the adaptability of suppliers; Second, the supplier establishes safety stock and transfers the pressure of stock to the supplier; Third, cooperate with third-party logistics. Suppliers entrust their logistics activities to professional logistics service enterprises through contracts. According to some foreign enterprises that implement JIT purchasing strategy, JIT purchasing can reduce the inventory of raw materials and purchased parts by 40%~85%. At the same time, JIT procurement makes the storage time of materials in the project site very short, and the phenomenon of material damage and waste is very rare. At the end of the project, the construction enterprise evaluates the suppliers, and comprehensively evaluates the suppliers' supply ability, ability to cope with changes and reputation. Reward suppliers with good performance, improve the enthusiasm of suppliers and improve the quality of procurement. 2.2 Play the scale effect and improve the level of procurement. Construction enterprises take strategic objectives as the core, and set up a procurement department to be responsible for the procurement of all projects. In the whole process from the construction preparation stage to the completion acceptance and delivery of the project, the procurement department is the main body, and all departments and personnel such as design department, financial department and construction participate in the procurement, thus avoiding the problem of purchasing different projects separately, breaking the whole into parts and giving full play to the scale advantage of centralized procurement of enterprises. At the same time, using PDCA performance evaluation mechanism, the whole procurement process is evaluated circularly during and after the event, and the problems existing in the procurement process are found in time for effective solution and prevention. At the end of each project, make an after-the-fact evaluation of the whole project procurement, sum up experiences and lessons, and continuously improve the overall procurement level. 2.3 Reduce procurement costs and improve capital utilization. The transaction results of construction enterprises in JIT mode are transmitted to enterprises through information sharing system, and the whole procurement process is open and transparent, which effectively reduces the procurement cost of enterprises. It is mainly manifested in three aspects: first, the procurement department is established from the height of the enterprise to be responsible for the procurement of all projects, avoiding multi-head procurement of different projects, avoiding private transactions in the procurement process, improving the procurement management system and reducing management costs; The second is to establish long-term cooperative relations. Every transaction is order-driven, and there is no need to negotiate back and forth constantly, such as quotation, inquiry and counter-offer, which reduces the negotiation cost; Thirdly, an information sharing system is established. Enterprises issue orders by electronic means, and suppliers organize production and delivery according to order cards, which reduces transaction costs. The procurement process takes place during the whole construction period, and the expenditure of procurement funds is only carried out when the order occurs. Every order transaction is only a small amount of capital flow, which increases the liquidity ratio and provides financial support for enterprises to carry out more projects. According to p = f/( 1+I) n (where: p is the present value; F is the final value; I is the interest rate; N duration) Know that the earlier the capital expenditure, the greater its present value, and the more unfavorable it is to the construction enterprise. Therefore, the procurement of construction enterprises under JIT mode saves funds for enterprises and reduces procurement costs. Reasonable capital structure improves the efficiency of capital utilization. Procurement process and organization implementation of construction enterprises under 3 JIT mode. Construction industry is different from manufacturing industry. Its products are not independent articles, but engineering facilities with fixed space, huge volume and similar production processes. Its common feature is that each project has to go through the stages of project conception, project establishment, construction and delivery, and the production process of the project needs to consume a lot of raw materials. 3. 1 JIT procurement process of construction enterprises The one-off, open-air production and complexity of construction projects bring a lot of uncertainty to the procurement of construction enterprises, and the continuity of the construction process also puts forward strict requirements for the procurement of construction enterprises. Under JIT mode, the raw material procurement of construction enterprises is a modern procurement mode based on network, with material procurement as the main content and information sharing, which realizes timely and high-quality procurement. By establishing safety stock, suppliers can improve their ability to cope with changes and ensure timely delivery. The procurement process integrates the effective information of the supply and demand sides, and ensures the smooth progress of the construction process through effective and timely information transmission. The procurement process is divided into several links, such as the establishment of procurement objectives, the selection of suppliers, the establishment of information platform and the evaluation of procurement performance. The specific procurement process is shown in Figure 3. Master Production Planning (MPS) is a part of the whole procurement planning system, and its essence is to ensure that the production plan of suppliers is consistent with the demand (demand time and quantity) of construction enterprises.

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