The meaning and importance of cost reductionProfit is the foundation of the survival and development of an enterprise, and it is the lifeblood of an enterprise. Reducing costs is undoubtedly an important way to increase profits.
As an important link in the cost reduction chain, procurement cost reduction is one of the main battlefields in the cost reduction campaign. Continuing to win the battle of procurement cost reduction is an unavoidable, commonplace but never-ending topic in enterprise operation and management.
Our company has developed from a small workshop all the way to the scale of billions of today, the boss knows the hardships of entrepreneurship, the difficulty of keeping the business, and I can't wait to break a penny into two halves to spend in our company.
Procurement cost reduction has been put in a more important position.
All the company's procurement approvals, from millions and tens of millions of polyethylene and polypropylene raw materials, to office supplies and production accessories of tens and hundreds of yuan, must be subject to the final review and signature of the boss.
For enterprises, "development is the last word", and for procurement personnel, "saving money is the last word".
Our company's annual purchase amount of more than 1 billion yuan, the company's marketing order net profit margin is about 10% on average, and every 10 million yuan saved by the procurement department is equivalent to the marketing department taking an additional 100 million yuan of orders, which has increased the net profit of 10 million yuan for the company. The order profit is obtained through the hard work and careful operation of many departments, and the contribution of procurement cost reduction to net profit is short-term and fast.
Procurement cost reduction is the primary indicator of procurement performance appraisalIn our company, the three major indicators of procurement position assessment are **, quality and delivery. On the premise of ensuring that the quality is qualified and the delivery is satisfied, it has become the primary indicator for the company's assessment of procurement personnel.
What the boss has repeatedly emphasized is that under the premise of ensuring that the quality is qualified, the excess quality should be strictly controlledIf you can purchase standard products, you will never purchase customized products. When the R&D technology department issues procurement technical standards, if it involves customized standards, it needs to make a written explanation to the company.
The planning department and the marketing department should do a good job of full communication, and should formulate the arrival date of raw material procurement realistically, and if the procurement cost increases due to unrealistically shortening the procurement cycle, the company shall hold the corresponding departments and personnel accountable.
Procurement cost reduction experience and successful casesAs soon as I joined the company, I was engaged in the procurement position, and more than ten years have passed, and I have worked all the way from a purchaser to a section chief, a minister, and a director. I said to the guys in the procurement center that keeping the bottom line of quality and delivery, and finding ways to save money, save money, and save money again is the greatest value of our work.
Through more than ten years of procurement work and management experience, I have the following experiences and corresponding cases.
1.It is necessary to gain insight into the changes in raw materials, especially bulk materials, and grasp the timing of procurement
The substances that our company purchases a high proportion of are polyethylene, polypropylene, steel pipes, steel wires, etc.
At the beginning of 2020, the new crown epidemic broke out, and many industries were hit hard. Polyethylene and polypropylene** are at a low point. According to many years of market experience, I predict that after 3 months, the market will pick up and rise, and this is a good time to stock up. I gave a detailed presentation of my ideas to the vice president in charge, and he very much agreed with me. The two of us made a report to the boss together, and the boss waved his pen and gave us a special fund of 40 million yuan for stockpiling.
The strong support of the boss has doubled the pressure on me, what if the market continues to weaken and ** continues to decline?More than 5,000 tons of raw materials are hoarded in the warehouse, but it seems to be pressing on my heart. I pay attention to the raw materials every day, and the fluctuations of the ** affect my pulse.
More than two months later, the polyethylene and polypropylene market began to pick up, rising and rising, and the price was higher than the hoarding price of 1,100 yuan tons, and the hoarding saved more than 7 million yuan for the company.
2.Optimize the procurement plan to achieve procurement cost reduction
In a review of the 426 seamless steel pipe procurement approval, the original technical standard required 8mm thick seamless steel pipe. I first communicated with the marketing manager corresponding to the procurement plan, understood the customer's use environment and conveying medium, and preliminarily judged that the 7mm thick seamless steel pipe could fully meet the use. I checked with the product technical engineer again and found that the 7mm wall thickness was technically risk-free. This batch of seamless steel pipes has saved more than 90,000 yuan in procurement funds for the company by reasonably reducing the wall thickness.
In my daily work, I often say to procurement staff that procurement cost reduction must rely on the power of technology research and development, and we must learn to borrow our brains and strength.
3.Survival of the fittest for the first-class business team, and maintain the healthy development and dynamic balance of the first-class chain
Some teachers have said that in the case of a certain total amount of procurement, reduce the number of merchants, make the cake of each merchant bigger, and increase the quantity in exchange for the preferential treatment. I agree with this, but streamlining should be a dynamic process and a continuous process of survival of the fittest.
In our company, the boss has always emphasized the need to develop more new first-class businesses and introduce a competition mechanism. Natural selection, survival of the fittest. **Business and our company cooperation, orders do not worry, payment does not worry, do not have to consider hospitality gifts, is to rack their brains to meet the quality, delivery on the basis of the first down, improve the cost performance is the fundamental way for the business to obtain orders in our company. The same kind of material, our company will reserve at least 3 or more businessmen, through the competition and mutual containment between businessmen, the company will always be in a favorable position in the negotiations, and strive for preferential treatment.
For materials and equipment with a large annual purchase amount or a single purchase amount of more than 3 million yuan, our company often adopts the method of bidding and finally realizes it through the bidding of multiple merchants.
Larger amounts of cost reductions.
Our company holds a business conference every year, and awards "strategic partners" to those who have good cooperation, excellent quality and delivery, and give preferential measures such as shortening the payment cycle and giving priority to transactions under the same conditions. There is a 20% elimination rate of the last place every year, which ensures the healthy development and dynamic balance of the ** chain to a certain extent.
The company also pays special attention to the procurement market survey and information collection, and the boss arranges special personnel to do on-site research and form a research report on the front line of the procurement market every month. The research and inspection personnel inspected the production and operation status of the current cooperative businessmen, developed new first-class merchants in a targeted manner, gained insight into the real situation and trend of the procurement market, further avoided procurement risks, and ensured the health and sufficiency of first-class business resources.
4.Use the payment method as a lever to reduce the cost of procurement
Our company has abundant funds, and in order to motivate the business to quote more favorable, we sometimes adjust the payment method to reduce the cost of procurement. Usually, the wire transfer settlement** can be about 3% cheaper than the acceptance**;For the long-term cooperation of the strategic business, from the goods to the account payment to the goods on delivery, the payment to the delivery can also strive for a certain degree of preferential results, to achieve a win-win situation.
PerceptionIn our company, everyone can stand on the foundation of the enterprise to create value, for the procurement personnel, procurement cost reduction is undoubtedly the most powerful and intuitive embodiment of their own value, is the job bowl and "lifeline" of every purchaser.
We are willing to work hard for every procurement colleague to improve their professional quality and show their strength in procurement cost reductionI wish all my procurement colleagues good health, all the best, progress in their work in 2022, and achieve a double high position and salary!