How to better control procurement costs

I. Reduce purchasing costs through the choice of payment terms.

If the enterprise has sufficient funds, or the bank's profits are low, you can use the cash transaction, which is faster and more efficient. In general, most of us choose the way of bankers' acceptances, acceptances often have a six-month period, and does not require the enterprise to invest the full amount of cash is equivalent to a loan part of the money but no interest, it is the same as the enterprise to use the forward payment to a limited amount of capital to purchase more goods, minimize the occupation of working capital and demand, and is conducive to expanding the scale of production.

Two, leveraged purchasing.

Avoid separate procurement, resulting in different units within the organization at different prices to the same supplier to purchase the same parts, but do not understand each other, for no reason lost the opportunity to save procurement costs. Therefore, there is a need to centralize and expand the procurement volume to increase the bargaining space.

Third, joint procurement.

Joint purchasing occurs mainly in the procurement of non-profit undertakings, by counting the demand of different purchasing organizations to obtain better discount prices. It is also used in general business activities such as third-party procurement to serve low-demand businesses.

IV. Designed to facilitate purchasing, it uses DFP- in-house and outsourcing strategies.

At the product design stage, the use of standards and technologies from co-sponsors, as well as the use of industry-standard parts, facilitates the acquisition of raw materials. This can greatly reduce the technical support required for in-house manufacturing, as well as lower production costs.

Fifth, standardized procurement.

The implementation of standardization of specifications, different product items or components using common design and specifications, or reduce the number of customized items in order to achieve economies of scale, reduce manufacturing costs. But this is only one aspect of standardization, the need to expand the scope of standardization in order to obtain greater benefits.

Sixth, choose a good reputation of the supplier and sign a long-term contract with them.

A capable, trustworthy supplier, not only to ensure the quality of supply, timely delivery, the overall level of service, but also to get its payment and price care, especially with the signing of long-term contracts, often get more concessions.