How to use the Internet to reduce procurement costs?

By justchinait
January 12, 2021

Procurement is an integral part of chain enterprises, and the cost of purchased materials accounts for a significant proportion of the total production cost. If the purchased materials or equipment cannot be obtained at a reasonable price, it will directly affect the operation of the enterprise. If the purchase price is too high, the product cost is also high, which will affect the sales and profit of the product. If the purchase price is too low, the quality of the purchased materials is likely to be reduced, which will affect the quality of the product and make the product not competitive in the market. Force. Therefore, chain enterprises must control the procurement part and create a suitable procurement strategy!

Today I will share with you how to use the Internet to reduce procurement costs. I hope it can help you!

1) If the company’s procurement is not well managed, the purchased raw materials are too expensive, or of low quality, no matter how they are managed and controlled in the production process, their products will be directly affected. The reason why problems often appear in the procurement process is due to excessive human factors and information obstruction. The Internet can reduce social factors and information problems and minimize procurement costs.

2) First, the Internet can be used to integrate and process purchase information, and uniformly place orders from suppliers to obtain the most significant volume discount. For example, Wal-mart in the United States collects the information that needs to be purchased through its retail management information system to the headquarters, and then the bases will uniformly order batches from suppliers through the network to obtain the maximum benefit.

3) Secondly, by using the Internet to connect production information, inventory information, and purchasing systems, real-time ordering can be realized. Enterprises can order according to their needs, minimize inventory, and achieve “zero inventory” management. This has the advantage of reducing Capital occupation and reduction of storage costs, on the other hand, can avoid the impact of price fluctuations on products. For example, through its flexible online procurement system, the Dell company in the United States reduces its spare parts inventory time to less than one week, while other computer companies are as old as one month or even three months. This is a daily price for computer hardware products and continues to decline. In other words, the backlog of inventory means that the cost of your product parts is always higher than the current rate, which is an important reason why Dell can sell at 15% lower prices than its peers.

4) Third, the automation and scientific nation of inventory and order management through the Internet can minimize the intervention of human factors, and at the same time, can make purchases with higher efficiency, which can save a lot of workforces and avoid unnecessary losses caused by social factors.

5) Fourth, information can be shared with suppliers through the Internet, which can help suppliers to supply according to the production needs of the enterprise, without affecting production and increasing inventory. For example, Boeing in the United States has set up parts webpages on the Internet to meet the needs of airlines around the world for company parts and components. Users in various places can directly contact parts suppliers through their webpages for support. The user’s service speed and cost reduction, while the user can obtain the required support as quickly as possible, avoid too many intermediate links, and achieve zero turnovers.

6) By publishing the purchase information on the Internet and the “real-time video conference” system, global suppliers can make quotations and bids, thereby selecting the supplier with the lowest overall cost. For example, a self-employed in Wenzhou, after publishing a free online shopping for shark skin, received quotations from several organic aquatic producers in South Korea, Japan, and Peru within three days. The lowest price of Wenzhou was 50 yuan per kilogram. The price is 150-200 yuan per kilogram.

7) Pay attention to the problem. The following issues must be paid attention to when using the Internet to reduce procurement costs:

1. It must share data with the internal management system of the enterprise, especially the inventory system and production system (the commercial department is the sales system) so that the purchasing department can understand the information in time and publish the order information online;

2. The enterprise site should set up a particular webpage to provide the type, model, quantity, delivery time, and contact information of the products needed by the enterprise;

3. It is best to establish long-term cooperative relations with a few suppliers, and realize the sharing of purchasing information and suppliers, strengthen mutually beneficial cooperation between the two parties, and obtain long-term commercial benefits because 80% of profits come from 20% of profits local.

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