How carton companies reduce procurement costs

The cost control of carton packaging companies includes every aspect of the company's management process, from raw material procurement, cardboard production, carton printing and post-processing to finished product transportation. The control of procurement costs among them is the most direct and most important content of overall reduction of corporate costs. Therefore, the control of procurement costs is crucial to the operating profit of a company. The decrease in procurement costs not only reflects the reduction of cash outflows from enterprises, but also directly reflects the decline in product costs, the increase in profits, and the increase in the competitiveness of enterprises. Since the proportion of material costs to carton production costs often exceeds 70%, controlling the procurement costs and reducing them is one of the important and direct means for carton packaging companies to continuously reduce product costs and increase profits. By strengthening the management and control of procurement costs and improving the procurement management system, the overall procurement cost can be reduced by more than 7%. Paying close attention to the control of procurement costs is an important and long-lasting work plan for the procurement management of carton packaging companies.

Through the selection of payment terms to reduce procurement costs, cash transactions can be used to reduce the price of raw materials, but the demand for cash is large. It takes 3 months to return the current funds, and 3 times the turnover of the funds is quite stressful. If the company has sufficient funds, or if the bank's interest rate is low, cash transactions or cash on delivery can be used, which often results in large price discounts. To reduce the purchase price of raw materials, the same high demand for capital, inventory pressure, in case of raw material price fluctuations, winning or selling is also more powerful than selling cardboard boxes, a bit like buying goods, the "pressure Po" high risk. In addition, for imported materials, imported carton equipment, the choice of foreign exchange currency and the exchange rate trend must also pay special attention. If you want to import production lines from Europe, due to taking into account the weak trend of the euro, you can choose the euro as the payment currency, thereby reducing equipment costs.

Grasp the timing of price changes

Prices will often change with the season and the market supply and demand. Therefore, procurement personnel should pay attention to the law of price changes and grasp the timing of purchases. For example, the purchase of starch can be based on the timing of corn harvesting, and the change in purchase price can be grasped in a timely manner. If the procurement department can grasp the timing and procurement quantity, it will bring great economic benefits to the company.

Use competitive tendering to contain suppliers

For the more intensive use of cartons consumables procurement, an effective method is to implement competitive bidding, often through the mutual parity of suppliers, and ultimately get the price of the bottom line. In addition, several suppliers should be found for the same kind of materials, and they should be checked against each other by selection and comparison of different suppliers, so that the company will be in a favorable position in the negotiations.

Purchase directly from the manufacturer or form a joint alliance order

Ordering directly to manufacturers can reduce intermediate links and reduce procurement costs. At the same time, the manufacturer's technical service and after-sales service will be better. In addition, several similar manufacturers with conditions can form an alliance and order together to overcome the contradiction that the number of orders from a single manufacturer is small and there is no more preferential treatment.

Choose a reputable supplier and sign a long-term contract with it

Cooperation with honest and reputable suppliers can not only guarantee the quality of delivery, timely delivery, but also pay attention to their payment and prices, especially with the signing of long-term contracts, often get more concessions. Fully carry out surveys and information collection in the purchasing market

Information Countermeasures ─ Internet, comparison, open bid. A company's procurement management must reach a certain level, should pay full attention to the purchase of the market survey and information collection and arrangement. Only in this way can we fully understand the market conditions and the trend of prices and put ourselves in a favorable position. If there are conditions, companies can set up special personnel to work in this area, and form a research report on a regular basis. Systematic countermeasures—What to purchase now requires that these projects be fully collected and that they must have systems that can unify company-wide purchasing functions—a flexible system that can be quickly adopted when finding inexpensive supply products and services.

Source: China Financial News