how to reduce purchase cost



1, value analysis. Whether the procurement of any kind of material to function for a product or service, before purchasing to understand bought the cost structure of the material, understanding supplier production finished the source of raw materials prices, collected different aspects of material procurement information, geographical differences, and accurate price.

2, negotiations. Control purchasing cost is one of the important link, the value analysis as the foundation has to negotiate, accomplish tell foregone the other, victorious, expected to reduce prices the magnitude of is personnel procurement negotiation skills.

3, select the appropriate suppliers. A good supplier can be with your common development, to give advice and suggestions of your development, cost saving. Select suppliers mainly from the quality, price, service, technical strength and other considerations, especially in the early stage of product development, can use the expertise of suppliers to achieve the purpose of reducing costs. Suppliers should not be replaced frequently, conditions are ripe, achieve supplier delivery stand-by, avoid stop transferring risk and backlog of material risk, virtually save the purchasing cost.

4, standardization. Products, fixtures or parts using common design, specifications, as well as the use of industrial standard parts, increase the convenience of procurement, reduce procurement costs, to obtain greater benefits

.5, bulk or joint procurement. Combined with the demand of different departments or production units, to focus on expanding the purchasing volume, increase the bargaining space and discount, to avoid the same suppliers to purchase the same material but the price is different, the loss of the opportunity to save the cost of procurement.

Why Sourcing agents ccould reduce costs

Purchasing agent has the characteristics of cheap, efficient and fast.

A new type of material purchasing mode

Relative to the current our country most enterprise material purchasing mode, procurement agent is a kind of new procurement mode. It with the traditional mode of supplies the biggest difference is that a purchasing agent to the material purchasing this is separated from the enterprise internal functions, to achieve the procurement of externalization. That is to say, in the procurement agent mode, most companies will not set up special material purchasing department and reserve a large number of inventory raw material, the work will be a new type of material purchasing agent to complete. This kind of material procurement agent completely independent of the customer unit, but is different from general procurement intermediaries, it stands on the customer’s position, specialize in one type of or related to several types of the materials procurement agent, has its own warehouse and professional distribution team, can timely and accurately after received customer purchase order the goods are delivered to the customer designated locations. The procurement agent through this way of professional procurement and highly efficient material distribution team to replace the procurement department work carried out by the customer, can make oneself in the development at the same time, realize customer unit purchase cost savings.

This new material purchasing pattern can survive and grow, must satisfy three conditions. One is the low price, that is, it provides material price is cheaper than purchasing customers yourself, this is the premise of a purchasing agent can exist. Second, high quality, the materials provided by the quality to meet the requirements of the customer which is the key to the purchasing agent can exist. Three is integrity, namely the materials needed to make customers believe that their can be accurate and timely sent to the designated place, this is the foundation of the purchasing agent can exist. This requires, purchasing agent must have a high degree of social responsibility, highly professional distribution team and highly specialized management, depend on efficient management, high quality talent, establish a good social reputation.

Purchasing agent can be the key to survival is whether the procurement agent for customers purchasing to cheap and fine materials, and low cost operation is necessary to pursue purchasing agent enterprise strategy. In fact, purchasing agent really has such advantages and ability.

Material purchasing link itself also has cost squeeze space. According to relevant data, the traditional procurement mode of procurement costs accounted for the total cost of the enterprise investment 60% ~ 65%, and in foreign countries, the proportion was below 40%. That is to say, our country there is at least 20% of the material purchasing cost compressed space. Enterprises should improve the economic benefit, the procurement cost reduction is a very realistic choice.

Purchasing agent can realize more purchasing direct cost savings. Purchasing agent enterprise specialized in the procurement and distribution of goods, it supplies procurement functions of the spun off from the production enterprise, realizes the social division of labor. According to the theory of division of labor and specialization, division of labor is conducive to the further development of specialization, and specialization is the direct effects of cost savings. The procurement enterprises is specialized materials purchase, it has a professional team of procurement and supplies distribution team, can effectively reduce the purchasing cost. First of all, it specializes in one or several types of the materials procurement, can also provide the service for many customers, so in operation is usually a bulk purchase, bulk purchase tend to have larger discount on the price, can enjoy preferential discount is even more important than the general customers. The procurement business only one second, or a variety of materials procurement, have more abundant information than the average company, familiar with the field of market, and can quickly finish purchasing task when customer issue purchase orders, save a lot of transaction costs such as inspection, negotiation.

For customers, in addition to saving the cost of purchasing department daily, procurement staff wages, material inventory cost and transaction cost in purchasing, can also with high efficiency, low price to buy the materials required. Enterprise’s whole purchasing tendency of simplification, streamline, procurement cost is reduced greatly.

Purchasing agent can ensure the quality of the goods purchased. Purchasing agent can exist and develop lies in it is restricted by an invisible, is it to the customer’s responsibility. Customer trust it, willing to put their own material purchasing business entrusted to it, can it survive and to grow. Therefore, it must stand on the position of customer, want to think of the client, the urgent need of the client. It must stay awake, because in the information society, the circulation of a negligence or fraud (such as shoddy) will not only bring myself to never lose a customer, and may give yourself a devastating disaster, in this sense, the procurement agent purchasing department more than customer itself has the sense of responsibility and the sense of crisis, have more incentive to seek high quality goods. In addition, the procurement agent enterprise specializing in one or several types of the materials purchasing, have more professional procurement staff, to grasp the market more accurately, the merits of the quality of related materials also have identification ability more. Therefore, purchasing agent can purchase to meet the requirements of the customer supplies. This to one or a few class materials more professional knowledge, for the procurement enterprise, is indispensable for its survival, and for the customer, is potentially save the purchasing cost.

Purchasing agent can provide more efficient service. Purchasing agent have professional distribution team, it would be able to in a short time the customer needed supplies ability to accurately to the customer designated location. And engaged in some kind of goods or several categories of goods distribution, on the distribution of supplies, transportation, performance requirements more understanding, thus reduce the loss of the goods and materials in the process of loading and unloading and transportation to save the cost. For enterprise customers, because as long as according to production schedule in a reasonable time before a purchase order, materials will be able to get the supply in time, so there is no need to reserve a large number of materials, only a small amount of inventory or zero inventory, to prevent the backlog of raw material supplies, reduce inventory costs.

Purchasing agent can effectively prevent corruption in the procurement. Traditional procurement mode, procurement staff to identify suppliers, often need to supplier for field trips, and it is often easy to cause corruption in purchasing link chain. In reality, some vendors to obtain supplies, willing to spend heavily on wooing procurement staff, or promises to give the secret commissions. But the wool is on sheep’s body, procurement staff covet interest costs as a result of the enterprise. And enterprises in order to prevent the occurrence of fraud in purchasing link, established a series of supervision mechanism, but judging from the results of actual execution, the enterprise not only spend the high cost, and the effect is not obvious.

Procurement agency model material purchasing this function from the enterprise internal separated, the relationship between the customers and the purchasing agent into the open, and clarity. For enterprise customers, reduced the materials purchase link, which appear in the source to reduce the material purchasing the possibility of corruption, greatly reduces the procurement cost of supervision.

To sum up, the procurement agent as a kind of new material purchasing mode, the characteristics of its cheap, efficient, fast, will be overtaken by more enterprises know become a new choice of many enterprises to reduce purchasing cost.


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