浅谈企业降低采购成本的战略英文版1.doc

An Analysis of the Strategy of Reducing Companys Purchase Cost广东外语外贸大学英语本科学位论文( 2015 届 )论文题目 An Analysis of the Strategy of Reducing （英文） Companys Purchase Cost论文题目 浅谈企业降低采购成本的策略（中文） 专 业学院 继教（公开）学院商务英语准考证号班级自考 051111100521作者姓名指导老师 王坛坛 赵红辉完稿时间 2015.4.13成绩 An Analysis of the Strategy of Reducing Companys Purchase CostWang TantanAbstract: Purchase activity is the basic step in the economy of mankind, it has become an indispensable part no matter in the field of production or circulation. Company purchase serves for the production and operation to achieve the aim of earning profits, which exactly make company purchase face sourcing risk and the problem of input and output. Enterprises also have to face the problems of lowering purchase cost, intensifying the purchase management and meeting the requirements of production schedules and product quality for realizing operational goals in purchasing activity. The article first briefly introduce the meaning and effect of reducing companys purchase cost, then followed by several strategies which will be analyzed for the reduction of purchase cost, and point out lowering the purchase cost can help to enhance the core competitiveness of enterprises.Key words: company purchase; purchase cost; supplier浅谈企业降低采购成本的战略王坛坛摘要: 采购活动是人类经济活动的基本环节，无论是生产领域还是流通领域，都离不开采购活动。由于企业采购服务于生产经营活动，并且以营利为目的，由此决定了企业采购面对着采购风险和投入产出问题，为了实现经营目标，企业在采购活动中就必须面临如何降低采购成本，加强采购管理，满足生产进度和质量要求等问题。本文首先简要介绍降低企业采购成本的含义与作用，接着分析降低采购成本的几项战略,并指出降低采购成本有利于提升企业核心竞争力。关键词：企业采购；采购成本；供应商Contents1. Introduction12.Description of reducing companys purchase cost13.Effect of reducing company purchase cost24.The strategies of reducing companys purchase cost34.1 Establish and improve companys purchase system34.1.1 Price record and price assessment system44.1.2 Suppliers record and access system44.1.3 Using standard purchase price to examine the job performance of purchase specialist.44.2 The main ways to control and reduce purchase cost54.2.1 Using info management system to reduce purchase cost54.2.2 seizing the timing of price change and holding market conditions54.2.3 Strengthening the material purchase planning64.2.4 Choosing payment terms64.3 Cautions to be considered in purchase internal control64.3.1 The subject and object of purchase internal control74.3.2 The key points of controlling in purchase internal control74.3.3 Revision and improvement of purchase internal control system74.3.4 The external supervision while strengthen internal control74.4 Purchase strategies which can lower cost74.4.1 Optimizing the overall suppliers structure and supporting system74.4.2 Selecting proper purchase route85.Conclusion9Works Cited10iiiAn Analysis of the Strategy of Reducing Companys Purchase CostGuangdong University of Foreign Studies 2015 Wang TantanTutor: Professor Zhao Honghui1. Introduction Nowadays, more and more business managers or executives realized the importance of saving purchase cost. And the company material purchase generally accounted for a large proportion (about 60%) in product cost (任南 18).For that reason, the purchase of components and raw materials to some extent have an influence of enterprises competitiveness. Successful purchase with the sound purchase management system often is one source of competitive advantage in a company. On the other hand, with the acceleration of the global economic integration, companys purchase department is facing a series of issues such as the rising price of raw material and energy, some suppliers monopoly to the price and technology, imprecisely market predict or constantly changed plan, and purchase cost with a all-time high, etc. For promoting the cooperation between different sectors, improving operational skill of purchase to avoid out of stock or overstock, accomplishing suppliers development, assessment and appraisal on strategic level, building the bilateral strategic and cooperative partnership with suppliers, integrating the external resources to reduce purchase cost and avoiding purchase risks, It has become the important ways to keep companys sustainable development by establishing highly effective purchase management and operation system. As a result, strengthen the training to companys purchase specialists not only can help them to improve their purchase skills, but also can help enterprises to earn profits as much as possible by making them know how to cut down the purchase cost, and this has become a very important power in companys purchase.2.Description of reducing companys purchase cost Price competition in the market actually is cost competition. To reduce product cost, decreasing the consumption in the process of production can be a possible method, but cutting down the purchase cost in the process of procurement is the best way. As we all know, digging potential in the process of production is very limited compared to the larger possibility existed in the process of purchase(任南 2).Thus, lowering the purchase cost of commodity became the most immediate and the most effective method to decrease companys purchase cost. In addition, like other sectors, purchase activities also involved a management cost because each purchase step needs to be regulated in a reasonable and effective way. So we should take the minimized management cost into account during the whole procurement while thinking about how to control the operating cost. When a company is going to get products or services from supply market as its own resources, it has to ensure that not only reduce the cost of commodity but also keep the management cost at the lowest level to achieve the procurement purpose. Meanwhile, it should be noted that the aim of purchase is to maximize the integral benefit as well as reduce cost. Company often tend to ignore the purchase quality if concentrates too much on lowering purchase cost. Due to the quality of companys finished products have a direct connection with the quality of purchased raw materials, so it must not allow to compromise on quality for decreasing the purchase cost. and we should strictly perform the quality standard that each company must have. Simply speaking, lowering the companys purchase cost is to minimize the material cost and management cost on the premise of guaranteeing the good quality of purchased goods.3.Effect of reducing company purchase cost With the development of global economy and the progress of technology, purchase has evolved into its function of saving cost, increasing benefit and obtaining service from the simple buying or selling. Reducing companys purchase cost can help to acquire much higher profit as well as cut down the invest cost. For example: In companys sales revenue 50 per cent have been used in raw material purchase,40 percent used in other cost expenses,10 percent is the pre-tax net profit, that is, in every 100yuan sales, there is 50yuan for raw material purchase, 40yuan for other cost and 10yuan for pre-tax net profit. Under this circumstances, the income statement could be displayed as : Income statement(adapted from李雅萍6) sales revenue() 100 products sales cost() purchase cost 50 other cost 40 cost total 90 pre-tax net profit() 10 If the company wants to take some steps to increase profit, it can realize the goal just by decreasing the purchase cost into 49yuan(2per cent reduction).then the income statement changed as below: Income statement(adapted from李雅萍 7) sales revenue() 100 products sales cost() purchase cost 49 other cost 40 cost total 89 pre-tax net profit() 11 It is obviously turned out the change of purchase cost will bring a considerable influence to companys profit which is called leverage of purchase profit. As the purchase cost(including raw materials and components) takes the proportion of 60% in company revenue, reducing companys purchase cost not only can gain the profit but also improve the companys competitive position.4.The strategies of reducing companys purchase cost The more the importance of saving purchase cost for a company, the more involved management will be in the sourcing decision. The strategic importance is not merely determined by the amounts of money or the investment involved in the purchase activity. For example , the bottleneck of lowering items cost can sometimes show significant risk in terms of availability and supply and often turn out to be a direct threat to the continuity of production(Weele 36). 4.1 Establish and improve companys purchase system Purchase specialists directly contact with different suppliers on behalf of their companies because of the particularity of procurement activity, as a result, purchasing process is difficult to be completely transparent which led to a lot of irregularities such as black case works. Therefore, company must set up the strict purchase system to constrain purchase activity. and this is the precondition to effectively control companys purchase cost. Companys purchase system generally include the labor division and liability inside of purchase department, splitting category of purchase, purchases model selection procedure, the approval authority and approval mode of purchase requisition, the operational procedure for inquiry, confirming supplier and signing purchase contract, the regulation for supervising goods arrival, inspecting, warehousing and purchase statistics ,etc. The key factor of cost control is the confirmation of purchase price and suppliers in purchase system, for arousing the whole purchase specialists enthusiasm to take part in the cost control, companies should be required as below:4.1.1 Price record and price assessment system Companys purchase department should take records of all purchased materials price. Each quotation of the goods to be purchased should be compared with the material price in the record and then analyze the reason of price difference. In essence, purchase price should not exceed the recorded price without special reasons, or it has to make specific explanation. Besides, it is necessary to build price assessment system for the important materials price. The relevant departments in a company also could organize a team for assessing price which will take responsibility of periodically collecting related price information, analyzing and assessing the existing purchase price, confirming the latest reasonable purchase price and timely updating the recorded price.4.1.2 Suppliers record and assess system Supplier performance management(SPM) has become an area of increasing interest as supply chains have become global and supply risks have increased. The more insights they have into their suppliers performance, the better decisions they can make ,such as making the choice of right suppliers. It enables to establish a file which the confirmed suppliers can be registered in it. and appoint a person to manage it. Apart from suppliers code or detailed address, Suppliers file should also include the information of payment terms, delivery terms, delivery date, quality rating, bank account and so on(李雅萍110).Furthermore, company must choose suppliers from the file when a sourcing needed and regularly check or update the information of suppliers file. Otherwise, the assess system should be built, important materials suppliers can be allowed to enter the system after the combined assessments from the department of quality control, material and finance, if possible, it needs to investigate suppliers production base on the spot. Company should also strictly operate according to the assessment procedure and indicator, only the suppliers that reach or beyond the indicator can be accepted into suppliers record and periodically carried out the assessment and evaluation to the recorded suppliers. At the same time, it should be noticed that the potential suppliers conformed to the requisition of access system will substitute the recorded suppliers which are temporarily disqualified in the assessment.4.1.3 Using standard purchase price to examine the job performance of purchase specialist. Financial department has to regularly make a standard purchase price against intensively monitored material according to market change and product standard cost. and in order to encourage purchase specialist to positively look for new supply and minimize the purchase cost by shop around，financial department should also figure out a proportion of rewards and punishments on the basis of the range that purchase price held by purchase specialist deviated from the standard purchase price.4.2 The main ways to control and reduce purchase cost There is absolute cost control and relative cost control when talking about cost control. The former aims to the predetermined cost quota, the latter aims to minimize the cost as much as possible. In terms of purchase cost, cost control by limiting is a kind of standardized behavior monitored by purchase system. But as a matter of fact, what the companys preference is to control the purchase cost at the lowest level, namely, the reduction of cost.4.2.1 Using info management system to reduce purchase cost In the age of information, the thoughts and approaches to decrease purchase cost should be based on the machine-centric info management system. Therefore, corporations, before the purchase performance, should set about building the effectively machine-centric and network-centric info management system, and on this basis suppliers can realize market trade, lower trade cost and shorten the transaction time by EDI system. while it is available to collect or release information and cut down companys purchase cost because of the realization of end to end purchase by internet. Corporations also can use CIMS to systematically manage and control the purchase info of the complete production and operation activity required and the whole process of production and operation(like product design, material purchase, production plan, manufacture, sales and service(翟光明,郭淑红,时锦绣92).Info management system not only changed the traditional procurement approach in form and technology, the more important is it promoted the more effective competitiveness among suppliers by optimizing the purchase process and improving the purchase efficiency.4.2.2 seizing the timing of price change and holding market conditions With the development of market economy, corporations increasingly pay their attention to study how to use market mechanism to reduce purchase cost for material supply. Todays material market presented some characteristics: The first is big market and multiple sources in supply. Corporations can make full use of the advantage to dig the potential market and look for the law of reducing cost. The second is large price difference and quick price change. For seizing the good timing of material purchase, company must keep up with the pace of market change with adaptability. The third is much different quality level and counterfeit products intermingled. so corporations have to carefully identify the purchased commodity and carry out the strict quality control standard(李雅萍 111). In addition, it is helpful to supervise markets direct condition(include description, quality, price, seller, shipment, etc)and indirect condition(include politics, economy, law, finance, technology, etc)and the dynamic(include production and construction, material demand and stock, capital strength ) in the industry. Company have to organize and transmit these information for the preparation of purchase activity.4.2.3 Strengthening the material purchase planning Planning management is the leading of material work and it also effected throughout the process of material purchase. So it has to practise the strictly planning management to material supply. First, scientifically confirm the stock reserve quota which can help avoid the serious problem of overstock as well as satisfy the requirement of production. Second, periodically draw up a plan and strictly check for the material purchase which is difficult to fall under the stock reserve quota management. Third, purchase plan only could be implemented after relative departments approval such as schemer ,leader, accountant and warehouse keeper to realize the improvement of plan quality, sufficient supply, overstock prevention, rapid turnover and saving capital.4.2.4 Choosing payment terms For domestic purchase, if a company has sufficient cash or bank interest rates are very low, choosing payment in cash or payment against delivery can help to get a favorable price discount. But today the existing of global sourcing is relevance here, not just in multinationals, all companies will become truly global in their sourcing. Thus it brought a problem of settlement. The conversion of one currency into another does not, of itself, pose any great difficulty if the currencies are convertible, but it does cost money for the conversion to take place. More importantly, the extent to which exchange rates fluctuate does cause considerable problems. The exchange rate fluctuations can and do affect international transactions in the same way as price changes(Baily,Farmer,Crocker,Jessop and Jones 315).So company should also care about the choice of foreign exchange currency and the trend of