Apply cost levers to purchase raw and auxiliary materials

The hardware conditions of the entire printing industry (including production equipment, etc. are basically the same, the printing process is basically similar, and the skills of operators are equal, so the quality of printing products is almost the same, which results in a close market competitiveness of products, and can be said that the entire printing industry In the era of convergence, under such conditions, competition will become more fierce. In order to survive, the printing industry must obtain maximum profits under harsh market competition conditions. Only in this way can we ensure that we are in a leading position in the industry. It can be guaranteed not to be eliminated by the times.

For now, how to get the maximum profit will become a difficult problem for every printing factory manager. It may be a shortcut to reduce the procurement cost of raw and auxiliary materials. However, the endless reduction of raw material procurement costs will bring A series of negative effects will lead to a vicious cycle of “lower purchase costs of raw and auxiliary materials, lower quality of raw and auxiliary materials, lower product quality, lower qualified product rate, lower market competitiveness, and eliminated by the market”. This is not an alarmist because There are indeed such potential crises that endlessly reduce the purchasing costs of raw and auxiliary materials!

So how can we get the maximum profit? The answer is to ensure that the cost of procurement is minimized. This is not a joke, just said that we can not blindly reduce the cost of procurement of raw materials. In fact, the connotation of guaranteeing the lowest purchase cost is to ensure that the cost of comprehensive procurement of raw and auxiliary materials is minimal, that is, to maintain the best price/performance ratio of raw and auxiliary materials. In order to control the cost-effectiveness of raw and auxiliary materials in the best condition, we must do a lot of work, not simply considering the unit price of raw and auxiliary materials. This is a systematic project that requires a lot of effort and effort. As the saying goes, “The sharp knife does not cut the firewood by mistake”, we should pay attention to the following points when reducing the purchase cost of raw materials.

Taking full account of comprehensive costs

Because there are many relevant factors that affect the quality of printed products, and most of them are variable factors, the input and output of raw and auxiliary materials are not a simple linear relationship, which requires us to fully consider the raw and auxiliary materials. The relevant performance is demonstrated, and then it is analyzed whether the relevant raw and auxiliary materials have the best price/performance ratio. How can we make a correct analysis of the best cost-effectiveness of raw materials? The answer is to conduct a full-scale pilot test for the relevant raw and auxiliary materials, and fully consider whether the raw and auxiliary materials will affect the relevant tests. Product quality, production efficiency and qualified product rate, and other factors, and then consider the raw materials in the production process of the overall cost, and then with other various raw and auxiliary materials in use to compare, in order to obtain the lowest overall cost Supplementary materials will be put into future production. Below, we use a case study to analyze the selection of raw and auxiliary materials.

The paper A used by a printing factory is RMB 8900/t. It is proposed to use a paper B of RMB 7800/t to replace it. After a period of trial, some relevant data are obtained.

Calculated and analyzed:

The total cost of consumption for the production of qualified 1 million copies of paper using Paper A and Paper B is:

A: (1.5 × 8900 + 39 × 80 + 56 × 10 + 240 × 0.5) × (1 ÷ 0.9785) = 17600.3673 (yuan)
B: (1.575×7800+43×80+75 × 10+340×0.5)×(1 ÷ 0.951)=17609.8892 (yuan)

Therefore, it can be seen that although paper B is cheaper than paper A, due to certain differences in quality, some production-related indicators such as paper consumption per unit product, unit ink consumption, production hours, and power consumption appear. Ascending trend, in addition, the pass rate of finished products has been reduced. The impact of these factors directly offsets the cost reduction of paper unit price. Therefore, after calculation, it is found that the comprehensive cost of qualified products of production units has not been reduced, but has increased. If you consider the impact of production efficiency (using paper A for production, the yield per unit of time is higher than using paper B for production), the overall cost of using paper B for production will be higher.

After analyzing the previous case, we can see that although paper A has a lot of investment, its overall cost in production is reduced. This is the secret of the comprehensive cost lever, if not fully consider the synthesis of raw and auxiliary materials. Cost, then it will produce a lot of unnecessary waste, and will reduce the quality of the product to a certain extent, thereby reducing the market competitiveness of the product, it can be seen how important it is to excavate a comprehensive cost of raw and auxiliary materials.

Guarantee the best price/performance ratio

In the procurement of raw and auxiliary materials, we must not only consider the input and output of comprehensive costs, but also consider the impact of the replacement of raw and auxiliary materials on product quality. We must fully consider the requirements of end customers on product performance and quality, and must ensure that the cost is reduced. It is to provide users with quality clearance products. Let's look at the second case.

A product produced by a unit needs to be packed in a corrugated box. Since the product is to be stored in the warehouse, the finished corrugated box must have a high capacity for compressing the box, which must be more than 1250 N. In addition, the edge of the corrugated box is also required. The pressure and pressure resistance is high and the requirement is up to 2000N/m. After a carton factory received the order, it repeatedly demonstrated that it had 3 plans.

(1) High-strength corrugated paper and high-quality corrugated cardboard are used for corrugated box production. The corrugated boxes produced are of high quality. The compressive capacity of the box is as high as 1800N or more, and the side pressure resistance is as high as 3780N/m. Each corrugated box costs up to 1.9 yuan/piece.

(2) Corrugated box production with corrugated paper of good quality and relatively good quality is used for corrugated box production. The quality of the corrugated box produced is high, the compression resistance of the box is over 1340 N, and the pressure resistance under side pressure is over 2150 N/m. The cost is only 1.5 yuan / piece.

(3) Two kinds of high-strength corrugated paper are used to produce corrugated cartons, and the corrugated boxes produced have a compressive capacity of more than 1450N and a side pressure resistance of 2560N/m or more. The cost is the lowest, only 1.35 yuan/piece. .

Under normal circumstances, we will choose the program for production, because scheme 3 has the lowest cost and the product performance is not low. This is not the best choice. In fact, the relative humidity of the end user's warehouse is relatively large, and the corrugated cartons produced by the use of scheme 3 have higher hygroscopicity. If the water content of the corrugated cartons is too high, the pressure resistance and pressure resistance performance of the box will be seriously reduced. Under such circumstances, comprehensive consideration should be made to choose Option 2 for production. After tests, it is proved that Option 2 is indeed better than Option 3.

In summary, we can see that the purchase of raw and auxiliary materials is learned, we should fully consider the overall cost of the product, and consider whether the relevant factors such as cost and quality reach criticality, and strive to make the least investment in production. Out of the most, and the quality of the product is not reduced, and based on this procurement, to fully play the role of comprehensive cost leverage in the procurement of raw and auxiliary materials.

Author/Wang Chengxin

Source: China Printing Materials Business