introduction manufacturers' pursuit of flexible manufacturing and the continuous expansion of production scale have correspondingly increased many difficulties in material management. Compared with BOM materials that directly constitute the final product, MRO materials often bring troubles to procurement management because of their lower price and various types. However, it is these humble MRO materials whose purchasing cost often accounts for 31.35% of the total purchasing cost. This paper will introduce the elements of material purchasing management, and how to subdivide and manage suppliers, establish an incentive system for purchasing team, help purchasers to better purchase and manage MRO materials, and provide material support for normal production. 1 procurement management element MRO is English Maintenance, repair &; The abbreviation of Operations, for manufacturers, MRO materials mainly include anti-static products, consumables in the production process, various manual/electric tools, electronic/electrical parts and spare parts on production equipment. In some factories with clean and dust-free requirements, purified products are also a major category of MRO. In addition, some manufacturers also include some chemical products (such as solder paste, tin bars, etc.) and office supplies (including consumables for printing and copying equipment). Unlike the direct material (BOM) that constitutes the final product, MRO materials are usually some low-value and consumable goods, and their types are complicated and the purchase volume is uncertain, so they are also quite different from BOM materials in procurement and inventory management. In the process of purchasing MRO materials and managing suppliers, the purchasing staff of manufacturers can strive for better prices and services by grasping five elements. 1.1 quantity is power, and quantity is power, which is the basic principle in negotiation course. The buyer's purchasing quantity is the biggest advantage in the negotiation, but how to use this advantage reasonably depends on different purchasing strategies. For BOM materials, especially for large OEM/CEM manufacturers, its advantages in purchasing batch are quite obvious. In order to keep the price competitive and spread the risk, BOM materials often have to maintain two or three suppliers. As for the procurement of MRO materials, the opposite has happened. MRO materials are usually low-value items with a wide variety, and the purchasing scale of a single commodity is not necessarily large. If you still adopt decentralized procurement, you will cut your own advantages. In this case, the same kind of goods, even different kinds of goods, can be merged and purchased, thus enhancing the power of negotiation. Imagine that if a manufacturer has nearly a thousand items with an annual purchase volume of several thousand yuan, if each product is purchased separately, none of them will gain a purchasing advantage, and because they have to trade with hundreds of different suppliers, the purchasing cost of the manufacturer is also quite huge. However, if these thousand items can be purchased from one or two suppliers, the manufacturer is a big customer with an annual purchase volume of several million yuan, and no supplier will ignore the existence of this customer. 1.2 Choose a comprehensive supplier If we want to merge procurement projects, the MRO supplier is not necessarily a material manufacturer or a huge organization, and sometimes a small and medium-sized company with comprehensive capabilities may better meet the needs of the buyer. For the manufacturer of a single material, the purchase volume of a single customer may not be very large. Although they have cost advantages, what they offer to buyers is not necessarily the best price, and they rarely reserve a large amount of inventory for a customer alone. However, due to its own system, large institutions will not reserve inventory for each customer, and the delivery speed is often slower. In contrast, when purchasing through a comprehensive supplier with flexible service, the buyer can often get a special discount for the huge purchase volume, and they can ask the supplier to reserve a certain amount of inventory, so as to minimize their own inventory. When the buyer cancels the purchase order of some materials due to production change or output fluctuation (this is very common for OEM), because most of the inventory is placed with the supplier, this part of the loss can be shared with the supplier, and the supplier can also sell these surplus inventory to other customers through its own sales channels. With the support of supplier inventory management, flexible production and JIT production are guaranteed in material supply. Not only that, suppliers can also form quite close partnerships with large customers by increasing inventory and providing additional services. Suppliers realize the goal of small profits but quick turnover through large quantities of goods in and out; And when customers have other needs, they often become the first choice suppliers. This is actually a win-win situation. 1.3 The role of time and cost of local procurement and transportation in MRO material procurement cannot be underestimated. About a quarter of the delivery time of materials is spent on transportation. Because MRO materials are mostly low-value products, long-distance transportation will undoubtedly increase the cost of procurement, and sometimes it may even exceed the value of the materials themselves. In fact, many manufacturers have noticed this. For example, in the construction of Starnet Industrial Park in Beijing Economic and Technological Development Zone, Nokia also invited their main material suppliers such as motherboards, batteries and enclosures to set up factories in the development zone. In the whole Starnet Industrial Park, Nokia's materials can be taken as needed, basically achieving zero inventory. The Pearl River Delta region has also formed a relatively complete industrial chain, and a good transportation network enables products to be delivered within one day, which is why electronics manufacturers like to put their production bases there. The above examples are also the same when applied to the procurement of MRO materials. 1.4 Application of ERP system The application of ERP (Enterprise Resource Management) system can undoubtedly improve the efficiency of enterprises in using various resources. For the procurement management of MRO materials, the application of ERP system can improve the speed of operation, reduce the error rate, enhance the accuracy of planning, and thus bring about a corresponding decline in procurement costs. But it must be noted that ERP is not a panacea. For BOM products and other products closely related to output, the application of ERP system can really improve efficiency. However, for other miscellaneous goods, it may be counterproductive if ERP is used indiscriminately. 1.5 Timely and rapid payment is very important for any enterprise. Good supplier relationship is achieved through honest and mutually beneficial cooperation, in which the timeliness of payment is the most important criterion. A good credit record can greatly enhance the position of the buyer in the negotiation, and it will not be difficult for the buyer to ask the supplier for a longer payment period. At the same time, a good supplier relationship can often enable the buyer to get the supply in time at a relatively reasonable price when the materials are in short supply, and get a quite favorable price when the supply is abundant. Of course, it depends on the speed of the payment process of the whole company and the cooperation of the financial department. The arrival of "turbulent economy", the incentive system of purchasing team, has changed the competition law from competition among companies to competition among supply chain alliances. Good supplier relationship is the basis of building a supply chain alliance, and supplier relationship management has thus become an important factor in determining the competitiveness of enterprises. Supplier relationship management is a framework, which includes two aspects of subdivided management of suppliers; And the incentive and monitoring of purchasing personnel. 2.1 Subdivision of suppliers In supplier management, we must first distinguish between general suppliers and strategic suppliers. For general suppliers, they can use standard procedures to deal with each other, and the energy spent is relatively less. For strategic suppliers who need to be divided into different levels and managed differently, it is necessary to find out who depends on whom and when/how to achieve interdependence. Great Wall Computer Company manages general suppliers and insists on' institutionalized' management. Establish systems such as "no black-box operation" and "avoidance of close relatives" to prevent related transactions. When managing strategic suppliers, it is usually directly involved by the company's top management. For global suppliers like Microsoft and Intel, almost all computer manufacturers pay great attention to the relationship between them. It is very important to improve the competitiveness of manufacturers that delivery is timely and the price can be appropriately tilted. Here: Relationship is also productivity! "No matter what kind of supplier-buyer relationship, communication and consideration for each other are the keys to handle the relationship well. We can set some specific goals to encourage conflict resolution and information sharing, and then we can effectively reduce costs and improve quality. For the long-term alliance relationship, we can measure it by the cooperation time, the growth of transaction volume and the number of technical upgrades. " 2.2 Subdivision of supply market Subdivision of suppliers should be based on the premise of subdividing the supply market. The supplier market can be divided into competitive market and monopoly/centralized supply market according to the difference of the number of manufacturers and competitive relationship, and the latter can be manifested as single oligopoly and multi-oligopoly. In a competitive market, the purchasing strategy is to maintain the competitiveness of the supply market; In the multi-oligopoly market, we should use dynamic sorting to divide the purchase amount; In the oligopoly market, the strength of the purchaser is the heaviest weight. For example, packaging suppliers and some component suppliers belong to the competitive supplier market. In this kind of market, there are a large number of suppliers and suppliers have basically no excess profits. Buyers can make full use of their active right to choose, analyze and predict the supply market, and establish a competitive mechanism to limit monopolistic behavior. At the same time, it is necessary to make new competitors have the opportunity to enter their own supplier list and create a supplier team that gives consideration to both dynamics and stability. For the multi-oligopoly supplier market, buyers mainly rely on bargaining to obtain relatively good supply services. The multi-oligarchs are dynamically sorted and the purchase share is divided, so as to improve the ranking of buyers in the customer list of oligopoly suppliers. Through the ranking selection between suppliers and buyers, we can choose the right supplier to establish a different and in-depth cooperative relationship, and win the priority price and service of suppliers from the purchase volume and cooperation degree. The monopoly market of oligopoly is mainly the choice of suppliers and buyers. At this time, for the purchasing department, the strategy is relegated to the second place, and the overall strength of the company and the share of purchasing power in the total purchasing market are the most important. 2.3 The main cost of motivating and monitoring the purchasing team in the supply chain of electronic manufacturing industry is the direct materials of products, and there are two factors that affect the cost: purchase price and purchase volume. The former reflects the purchasing staff's understanding of the industry and cooperation with R&D; The latter reflects the communication between purchasing personnel and marketing, R&D, planning and forecasting departments. In purchasing behavior, both of them show how to grasp the best opportunity to negotiate with various suppliers according to the changes of internal demand and external supply. Therefore, the success of supplier relationship management depends on the strategy and measures of the purchaser on the one hand, and the communication and trust between the purchasing team and suppliers on the other hand. After years of exploration, each enterprise has precipitated a set of methods for its own supplier selection, evaluation and management. The problem that really bothers purchasing managers generally lies in: how to "people-oriented" to manage purchasing personnel, motivate them to consciously and actively improve their relationship with suppliers, and always put cost reduction in the first place? Constantly improving the procurement management system, providing an efficient monitoring system and effective management methods, strengthening incentive management and avoiding the "grey" phenomenon to the maximum extent are the fundamental ways to solve the problem. In addition, strengthen the training of procurement personnel, including the training of professional procurement skills and communication skills; It is necessary to train suppliers in time and infiltrate the corporate culture and purchasing operation mode of the purchaser into the suppliers. Great Wall Computer Company's management of the purchasing team is based on historical experience and the trend of competition in the same industry, and gives the purchasing department a decline index. Reward if you complete the task, stimulate the enthusiasm of the purchasing team, and help them analyze it realistically if you fail. Although the implementation of institutionalized management has many divisions of labor and complicated procedures, on the surface, it reduces efficiency, but it also avoids the emergence of personal arbitrary behavior, and buyers do not have to ponder over adopting some risky and short-term behaviors. And because there is no opportunity, there will be no regret for losing the opportunity. Really' love the post, do your job, be loyal to it, and work hard for a long time' ".Let the purchasing staff feel the sense of accomplishment brought by their work, and at the same time stimulate their enthusiasm through material rewards are two important aspects to motivate the purchasing team. Motivation is the support of management, and the premise of effective motivation is clear benchmarks and goals. The establishment of monitoring system and incentive mechanism enables the purchasing team to straighten out their relationship with the company in the face of a large amount of cash flow and logistics, and effective management methods can improve work efficiency. However, how to combine the management system and management methods organically, while improving efficiency, so that buyers can proceed from the interests of the company is still a problem to be explored. The procurement staff of AB angle supplier management law often encounter a thorny problem: at present, when purchasing the products of Company A, the quality of the products of Company B has surpassed that of Company A for a while, and the price is lower, what should be done? Choose a or b? If you choose B, your relationship with A will be over. If C exceeds B in the future, do you want to establish a new relationship? In order to solve this problem, Great Wall Computer Company's solution is to implement AB angle system, and the supply will be completed by AB two suppliers. B's products are of good quality and low price, so buy more and A's products are less. But let a realize the standard of choice. When the delivery date is met, the order quantity should meet the following formula: order quantity = (quality/price) × relationship, that is, the purchase quantity is directly proportional to the quality of the supplied products and inversely proportional to the product price, and the relationship elements are usually regarded as 1 (unqualified suppliers are regarded as 1). In this way, as long as the purchaser is open, fair and just, it will convince supplier A, so as to pay more attention to improving quality and management and strive to do better in the competition. Practice has proved that this is not only a risk-free delivery, but also a more stable long-term relationship.