How do furniture companies control procurement costs? In recent years, although the total sales of Chinese furniture companies have generally continued to rise, their profit indicators are not proportional to the sales volume. Among furniture manufacturers, cost control is more p

How does furniture companies control procurement costs? In recent years, although the total sales of Chinese furniture companies have generally continued to rise, their profit indicators are not proportional to the sales volume. Among furniture manufacturers, cost control is more prominent and important. Many furniture companies do not do a good job in controlling procurement costs, production costs, operating costs, etc. or are not strictly strict. From the perspective of procurement, how can furniture companies control costs?

1. Build and improve the procurement system


Procurement cost control ’s basic work is to establish and improve the procurement system. Before implementing procurement business activities, it is very necessary to do the most basic work - the formulation of the procurement system, which is the prerequisite for enterprises to effectively control procurement costs.
2. Changes in traditional procurement concepts


Enterprises must follow the principle of "large cost of ownership" (TCO). They should not only pay attention to the explicit cost of , but also pay attention to the "invisible" hidden cost of .

procurement business behavior should be based on the principle of "lowest total cost" rather than just pursuing "lowest purchase price".

companies need to change their traditional purchasing concepts, have the foresight to control overall costs, and be able to evaluate the key links involved in the procurement process and other related potential costs. Only in this way can we save based on the total cost from all links and details.

A correct procurement concept is the primary factor that determines whether an enterprise can control procurement costs scientifically and reasonably. The control of procurement costs is not just the matter of the procurement department, it also assumes the responsibility of comprehensive cost management , which in turn affects subsequent R&D, production, sales and other links.
3. Establish a strict procurement system


In order to prevent purchasing personnel from "take kickbacks" and other corruption, enterprises should establish a strict and complete procurement system. This not only prevents corruption, but also regulates the procurement business behavior and optimizes the process of enterprises, thereby improving procurement efficiency. The

procurement system should formulate different specifications based on the classification of products required by the enterprise.

different product items stipulate the application category for material procurement, the authorized person’s approval and license, the method of raw material procurement and final approval, etc. It is also necessary to clarify the responsibilities and relationships of the relevant departments, and must not operate beyond the level, resulting in chaos in the final process and inseparable rights and responsibilities.

Of course, whether the procurement system can be implemented smoothly depends on the quality of the entire procurement team of the enterprise. The professional quality and professional ethics of the procurement personnel are the key factors affecting the procurement activities of the enterprise.
4. Reasonable formulation of procurement plans


The premise of formulating a scientific procurement plan is to understand the specific requirements of the demand department and the supply information of materials. Procurement business activities are in a position to serve production in the enterprise from beginning to end. The formulation of material procurement plans is mainly based on the specific requirements of the production plan and is based on the actual situation of the production demand department, rather than arbitrary procurement.

Nowadays, the traditional procurement model is becoming increasingly difficult to adapt to the development of enterprises. The offline and manual operation method is not only low in efficiency and high cost, but also difficult to meet the needs of consumers. In the digital era, a digital procurement management system is needed to solve the pain points of corporate procurement in one-stop and help companies manage costs! The ERP system of Shufu Furniture takes enterprise management as the core, uses information science and technology to automate management, supply chain, production, sales and other activities, and establishes a management system that realizes the integrated process of the enterprise upstream and downstream, helps enterprises simplify the complexity, realizes information management, promotes industrial upgrading, reduces operating costs such as procurement and production, and wins more business opportunities and profits.