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Advantages and capabilities of purchasing agents

2024-06-14

The key to the ultimate survival of a purchasing agent lies in whether the purchasing agent company can purchase cheap and high-quality materials for its customers. Therefore, low-cost operation is a strategy commonly implemented by procurement agency companies. In fact, purchasing agency companies do have such advantages and capabilities.There is room for cost squeeze

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According to relevant data, in my country's traditional material procurement model, procurement costs account for 60% to 65% of the total investment costs of enterprises, while in foreign countries, this proportion is less than 40%. In other words, there is still at least 20% room for compression in my country’s material procurement costs. If enterprises want to improve economic efficiency, reducing material procurement costs is a very realistic choice.

 

Realize procurement cost savings

Procurement agencies specialize in the procurement and distribution of materials. They separate the function of material procurement from production enterprises and realize social division of labor. According to the theory of division of labor and specialization, division of labor contributes to the development of specialization, and the direct impact of specialization is cost savings. Procurement agency companies are specialized material procurement companies. They have professional procurement and material distribution teams that can effectively reduce procurement costs. First of all, it specializes in the purchase of a certain type or several types of materials and can provide services to multiple customers at the same time. Therefore, it usually purchases in bulk during operation. Bulk purchases often have greater price discounts and can enjoy more benefits than ordinary customers. for favorable discounts. Secondly, agency procurement companies only engage in the procurement of a certain type or several types of materials. They have richer information than ordinary companies, are familiar with the market conditions in this field, and can quickly complete procurement tasks when customers issue procurement instructions, which can save a lot of money. Transaction costs such as inspection and negotiation. For customers, in addition to saving the daily expenses of the purchasing department, wages of purchasing personnel, inventory costs of materials, and transaction costs in purchasing, they can also purchase the required materials with higher efficiency and lower prices. The entire procurement process of enterprises tends to be simplified and streamlined, and procurement costs are greatly reduced.

 

Ensure the quality of materials

Procurement agency companies can survive and develop because they are subject to an invisible constraint, that is, their responsibilities to customers. Only when customers trust it and are willing to entrust their material procurement business to it can it survive and grow. Therefore, it must stand in the customer's position, think about what customers think, and be anxious about what customers are anxious about. It must stay awake at all times, because in a society with a high degree of information circulation, a single oversight or fraud (such as shoddy goods) will not only cause it to lose a customer forever, but may also bring about a devastating disaster to itself. In this sense, purchasing agency companies have a greater sense of responsibility and crisis than the customer's own purchasing department, and are more motivated to seek high-quality and low-priced materials. In addition, purchasing agency companies specialize in the procurement of one or more types of materials, have more professional purchasing personnel, have a more accurate grasp of market conditions, and are more capable of identifying the quality of related materials. Therefore, purchasing agents are better able to purchase materials that meet customer requirements. This more specialized ability for a certain type or several types of materials is a necessary means for the survival and development of procurement agencies; and for customers, it virtually saves procurement costs.

 

Provide fast service

Purchasing agency companies have professional material distribution teams, which have the ability to accurately deliver the materials required by customers to the customer's designated location in a short period of time. Moreover, those who have been engaged in the distribution of a certain type of material or several types of materials for a long time have a better understanding of the performance and transportation requirements of the materials being distributed, thereby reducing the loss of materials during loading, unloading and transportation, and saving costs. For customer companies, as long as the purchase order is issued before a reasonable time according to the production progress, the required materials can be supplied in time. Therefore, there is no need to reserve a large amount of materials. Only a small amount of inventory or zero inventory is needed to prevent the backlog of raw materials and materials, thereby preventing the backlog of raw materials and materials. Reduce inventory costs.

 

Prevent corruption in procurement

In the traditional material procurement model, procurement personnel often need to conduct on-site inspections of suppliers in order to determine suppliers, and this is usually a link in the procurement process that is prone to corruption. In reality, in order to obtain material supply qualifications, some suppliers spend a lot of money to win over purchasing personnel, or promise secret rebates. But the wool comes from the sheep, and the result of purchasing personnel's greed for small profits is that enterprises pay higher costs. In order to prevent the occurrence of fraud in the procurement process, companies have established a series of supervision mechanisms. However, judging from the actual implementation results, companies not only spent high costs for this, but the effect is not obvious. The procurement agency model separates the function of material procurement from within the enterprise, making the relationship between the procurement agency enterprise and its customers open and clear. For client companies, it reduces the number of steps in material procurement, thereby reducing the possibility of corruption in material procurement at the source and greatly reducing the cost of supervision in material procurement.As a new material procurement model, procurement agency will be recognized by more and more enterprises due to its cheap, efficient and fast characteristics, and will become a new choice for many enterprises to reduce procurement costs.