Parts procurement faces four major challenges

On May 16, from the Second China Auto Parts Purchase, Matchmaking and Marketing Development Forum held in Changchun, two messages were uploaded: First, both FAW Group and Dongfeng Company had carried out informatization construction on procurement, and the second was all. Suppliers for FAW and Dongfeng must all be synchronized to their e-procurement platforms.
A new model for the procurement of auto parts has begun to emerge, making many parts companies face challenges.
Challenges in vehicle procurement "At present, auto parts procurement faces four major challenges: First, suppliers can develop products synchronously with vehicle companies, shorten the product development cycle, and accelerate the listing of new products; second, choose a good supplier and increase the number of hosts. The competitiveness of the plant; Third, the operating costs of the supply chain operations are large, 80% of the products need to be purchased, which requires the establishment of a good supply chain, reduce costs and achieve a win-win situation.” FAW Procurement Department sources said.
“In the face of the current domestic automobile industry's integration into the challenges of economic globalization and the increasingly competitive market environment, we deeply feel that if we lack a good supply chain as a support, if our procurement and supply system cannot catch up with the pace of modernization as soon as possible, It is difficult to continue to develop in the fierce market competition, and examples of successful or unsuccessful companies at home and abroad fully prove that procurement, as the most important part of today’s business operations, plays a significant role in cost control and improving the competitiveness of product markets. The role of the procurement system and the concept of procurement management has been highly valued by domestic and foreign companies, and Dongfeng will therefore build a standardized, centrally competitive, standardized procurement system and procurement method that is in line with international standards, and will continue to upgrade Dongfeng Automobile. The overall level of the supply chain and procurement management level, to achieve a win-win situation in the market competition between Dongfeng Motor and the majority of suppliers.” Dongfeng Motor Co., Ltd. Purchasing Department sources said.
"Now, there are four problems in corporate procurement. First, the procurement of resources is decentralized and there are no group advantages. The procurement departments of each subsidiary company have their own procurement resources, resources are not uniformly planned, and resource information cannot be shared. The second is scattered procurement management and scattered resources. The prices of similar products purchased by various entities are not uniform, procurement policies and procurement standards are not uniform, and procurement practices are not standardized.3 The lack of procurement monitoring and management systems and the competent authorities are unable to control the procurement process.4 The traditional way (telephone, fax) (Letters, letters, E-Mails) exchange information with suppliers,” said Jiang Lanbo, manager of Beijing Xinhong Software Information Technology Co., Ltd., who had visited more than 60 vehicle manufacturers in China.
Purchasing information is imperative. Personnel involved in the FAW Purchasing Department believe that e-procurement can achieve standardized, efficient, and intelligent procurement strategies, effective management of product and supplier information, flexible formulation of multiple procurement rules, and the ability to integrate a variety of The purchase transaction method, tight integration with the back-end ERP system, real-time analysis of the procurement business, and the flexible and efficient procurement platform can be configured according to demand.
E-procurement enables efficient collaboration in the product development process. For example, orderly information sharing, security management of information, tracking of issues, and intelligent analysis.
E-procurement can also improve efficiency and reduce costs while meeting customer needs.
When talking about the implementation of the specific situation, the relevant person of the FAW Purchasing Department said: "FAW's replacement vehicle in 2005 has been developed synchronously with suppliers, took out three-dimensional data of each product in the concept car design, and sent it to suppliers through the Internet. Business plan, we manage the project through online three-dimensional data exchange."
After 2001, Dongfeng Motor Co., Ltd. began to seek an advanced management method and means: the organic integration of supply chain management and information technology. The popularization of computers, especially in the production and management of industrial enterprises, makes it possible to combine supply chain management and informationization. Looking at today's management software, MRP, MRPII, ERP emerge one after another. In 2003, Dongfeng Motor Co., Ltd. and Beijing Xinhong Software Co., Ltd. jointly developed DFAC-SCM system (Dongfeng Motor Co., Ltd. supply chain management information system).
According to the relevant personnel of the purchasing department of Dongfeng Motor Co., Ltd., the system has been very effective since its implementation in June 2003. First, after the implementation of the production management subsystem, the time for production planning has been shortened by three to four days. For 4 hours, the time for the plan to release to all units was shortened from 4 hours to 0 hours. At the same time, the scope of release was more extensive, saving a lot of manpower and material resources. Second, after the implementation of the procurement management subsystem, because a large amount of supplier information is maintained by the supplier itself, it is not necessary for the system personnel to input the information, so that the information is more accurate and reduces the workload of maintenance; procurement ratio management introduces computer management, so that Strictly regulate the operation, eliminate the influence of human factors, ensure the standardization of procurement behavior, and maximize the protection of the interests of suppliers. Third, after the implementation of the material requirements management subsystem, it mainly solved the business process of calculation, preparation, output printing and approval of purchase orders. Originally, after the release of the production plan, the purchase order would take up to two days (overtime) to complete the calculation of usage, preparation of orders, printing, and verification of the signature process. Finally, it would be transmitted to the suppliers via telephone and fax. Now we only need to check the numbers and make a simple adjustment. After confirming the approval, a little “posting” is completed. This process takes only half an hour and the accuracy is greatly improved. Fourth, after implementing the inventory management subsystem, the accuracy of the management of warehouse collection, delivery, and storage has been increased to 98%, effectively ensuring smooth production. Fifth, after the implementation of the information interaction platform, the problems of information communication between Dongfeng Motor Co., Ltd. and a large number of suppliers distributed throughout the country were solved. Nearly 600 suppliers use the Internet every day to log on to the website of Dongfeng Motor Co., Ltd. in order to keep abreast of their schedules, orders, stocks, arrivals, etc., and reduce the number of incoming and outgoing phone calls, and initially achieved e-commerce.
Procurement informatization is the future trend The international auto industry began to apply information technology in procurement management in 2001. The three major automotive groups in the United States (GM, Ford, and Dai-ke) share the same trading platform () and implement e-commerce procurement and online transactions. The three major groups brought all suppliers' resources to this information platform, and procurement transactions were completed directly on the procurement platform. At the same time, suppliers put product information and quotation information on this platform. Major companies can find partners directly on the platform, and weigh the prices on the Internet, thereby reducing procurement costs.
Now, Renault/Nissan, Mitsubishi, Toyota, Volkswagen, BMW, Volvo and other auto groups all implement e-commerce procurement and online transactions. Overseas automakers have applied computer-aided supply chain management systems, and world-class automakers have implemented E??DI, ERP systems to enable rapid transfer of information from suppliers, buyers, and manufacturers. Product collaborate design, inquiry, ordering, logistics, settlement and other procurement operations are all conducted online. The promotion of the supply chain goes from inside to outside and from big to small.
Jiang Lanbo said: "By expanding the scope of suppliers, optimizing the supplier structure, increasing the number of purchases, and lowering the purchase price, the cost of products will drop by 5% to 15%."
The reporter asked Jiang Lanbo: “FAW and Dongfeng have carried out information construction of procurement. How is the situation of SAIC, another big auto group in China?” Jiang Lanbo said: “Shangqi has been building procurement informatization for a long time. Now many parts and components companies are also making purchases. Information construction. This is the future development trend."

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