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Nowadays,the profits of packaging factories are getting lower and lower,How to improve the profit rate is a problem that bosses are considering.JWEI technology provides intelligent carton proofing machines for many packaging factories, we have a deep understanding of the industry,Let’s talk about that how to improve profitability by reducing procurement cost.

1. Control purchase cost

The material cost of the carton factory accounts for most of the total cost.The high one accounts for 70%~80%,and the low is close to 40%~50%.It can be said that the focus and source of enterprise cost control start from purchase cost.

Studies have shown that if purchase costs are reduced by1%,profits will rise by 10% or even higher.

The greater the ratio of procurement costs to total costs,the greater contribution of reducing procurement costs to profits.

2. Procurement method

As far as carton factory procurement is concerned,there are many ways to reduce costs.In summary,there are mainly the following six:

1. Analysis and Value Engineering

In other words,the VA and VE methods are commonly referred to as:

Applicable to new products:research on the functions of products or services,with the lowest life cycle cost,through elimination,simplification,change,substitution,etc.,to achieve the purpose of reducing costs.Value Engineering is a systemic study and analysis of the functions and costs of existing products.Now Value analysis and Value Engineering are regarded as the same concept.

2. Inquiry and negotiation method

Negotiation is a process in which buyers and sellers reach mutual agreement for their respective goals.Negotiations are not limited to prices,but also apply to certain specific needs.Using negotiations,it is usually expected that the purchase price will be reduced by about 3%~5%.

3. Early supplier participation in ESI

In the early stage of product design,supplier who choose partnerships participate in the new product development term.Through the early participation of the supplier,the new product development term can adjust the strategy of the supplier,and use the supplier’s professional knowledge to achieve the goal of reducing costs.

4. Leveraged procurement

Avoid separate purchases, causing different units in the organization to purchase the same parts from the same supplier but at different prices, but they do not know each other, and the opportunity to save purchase costs is lost for no reason. Should focus on expanding the procurement volume, thereby increasing the bargaining space.

5. Designed to facilitate purchasing, DFP—the strategy of making and outsourcing

In the design stage of the product, the standards and technology of the co-organizers and the use of industrial standard parts are used to facilitate the convenience of obtaining raw materials. This can greatly reduce the technical support required for self-made, while also reducing production costs.

6. Price and cost analysis

This is a basic tool for professional procurement. It is very important for purchasers to understand the basic elements of cost structure. If the purchaser does not understand the cost structure of the purchased item, it cannot be regarded as knowing whether the purchased item is at a fair and reasonable price, and it will also lose many opportunities to reduce the purchase cost.

3. Procurement process

In the procurement process, almost every link is directly related to the procurement cost, among which there are four more important links:

The first is to compare the inventory when formulating the order list. Repeated purchases when the warehouse already has inventory will inevitably increase the capital occupation, but also increase the natural consumption of materials;

The second is to formulate a reasonable target cost of material procurement, so that the actual cost and the target cost will not deviate too much;

Then there is inquiry and price comparison. In the case of comprehensive consideration of material quality and delivery time, shop around and choose the lowest price suppliers;

The last is the quality inspection when the goods arrive. By checking the quality, we can avoid the potential costs of repairs, scraps, and breach of contract claims caused by the quality of the materials.

Purchasing links need to be continuously optimized. Only in this way can costs be effectively reduced and profit margins increased.

Tags： intelligent carton proofing machines