The cost structure provided by the European, American, and Japanese Enterprise Statistics Bureau is as follows: procurement expenses usually account for 53% of sales revenue. When procurement expenses (direct raw materials) decrease by 5%, in order to achieve the same results, direct labor must be reduced by 22% and manufacturing costs must be reduced by 24%; The management and sales expenses must be reduced by 17%; If the profit ratio wants to remain unchanged (8%), sales revenue must increase by 34%. From this, it can be seen that reducing procurement costs to increase corporate profits is not only easy, but also unlikely to attract competitors' imitation, and consumers have no choice but to resist. Therefore, 'it's better to buy than to sell' is not an exaggeration. Buying unused materials can also cause inventory backlog, increase management costs, form non-performing assets, turn into scrap materials, and ultimately deteriorate and become scrapped due to aging.

According to the procurement strategy, Yangqi classified the required materials, and developed a procurement plan for commonly used low value consumables (such as water, tin wire, tin bars, etc.) based on safety stock; Purchase other commonly used materials for production according to the production plan. All items are purchased strategically based on the principles of saving procurement costs, preventing inventory backlog, and preventing production shortages, fully considering factors such as economic batch size, minimum packaging quantity, minimum purchase quantity, and procurement cycle.

Previously, we had to check the demand of each production line, confirm with R&D if there were any irreplaceable materials, and confirm with the warehouse if there were alternative material inventory. The final purchase order may not be able to be supplied by the supplier in a timely manner, and every purchase order may not be accurate. After the system goes online, it can help fully consider supply and demand, just by moving the mouse, "said Yangqi's material control.

Now we have requested the R&D department to establish a corresponding relationship between the stagnant alternative materials and the main materials in the system, and require manufacturing to prioritize the consumption of inventory. Now that we are seeing the mountain of stagnant materials slowly decreasing, we can finally breathe a sigh of relief. For material control, the warehouse also has many feelings. Through the control of the ERP system, not only is material procurement and flow transparent, but the procurement and pricing of raw materials have also become transparent and controllable.