Hospitality disposable razors distributor and wholesaler, Wang Li Shaver is established in 2009 by Mr. WangLi, is a professional manufacturer of manual plastic disposable shaving razors. The product line covers single blade razor, twin blade disposable razors and 3 blade disposable razors for male and female. Our disposable shavers are popular in the market of Middle East, South America, The United State, Russia and Africa etc. We are ISO9001 qualified enterprise with more than 160 employees working in a 10,000 square meters workshop, 20 sets plastic injection molding machines,10 sets automatically assembly machines, 4 sets packing machine and conveyors, and annual production ability has reached 150 million units.
When it comes to cost management, procurement often feels that it is going to bargain, and suppliers often feel that they have to reduce price.
The original intention of management cost is to use the technical methods to manage costs, reduce waste, reduce costs, and improve the company’s competitive position in the market.
The so-called management cost is to reduce the cost of various wastes and reduce the cost without value-added. It is not to cut down the price of the supplier to fill with the buyer’s benefit. The transaction that the one party benefits and the other lost is not long-lasting.
Today we will discuss common cost-driven factors, three driven factor for costs:
Generality of material
Non-industry standard parts mean that there are few suppliers, or even only one supplier. The supply of the market is not large enough, and the materials are usually not in a fully competitive market environment. Both supply and cost are a challenge to procurement.
Complexity of mix products
The complexity of the product portfolio refers to quantity, specifications and models, colors for the same product.
The more choices a company offers to its customers, the higher the complexity of the product portfolio, which means having to prepare more inventory, even to respond to urgent demand changes to increase supply flexibility, which often means more High cost.
In order to ensure the efficiency of operation and the competitiveness of the price, more and more companies tend to streamline the product portfolio. The classic representative in this field is Apple Inc. such as the Apple mobile phone. The initial period is only black, low and high configuration for selection.
The complexity of a product portfolio is directly related to inventory, supply, cost, and material scrap. High complexity often means high costs.
Scale of operations
Large-scale manufacturing plants and distribution centers must match large-volume shipment in order to achieve economies of scale to be profitable, while small-scale manufacturer also need to match their own size with shipments. If small factory scale is matched large volume shipment, it is often not profitable due to overtime costs, inefficient operation, machine failure, maintenance, etc.
Therefore, when selecting a supplier, it is necessary to consider whether the order quantity of the product matches the size of the supplier. The wrong match often means an increase in cost.
The driving factors of cost are closely related to the internal and external processes of the company. When we evaluate whether the material is an industry standard part, when we evaluate the complexity of the product mix, when we evaluate the size of the supplier, we cannot simply say good and bad, we must analyze the corresponding value of these cost drivers.
For instance, providing multiple product combinations is more complicated and costly than providing a single product. However, if the market positioning of the enterprise is to provide customers with more product choices and this is the core competitiveness of the enterprise, then the increase in cost is valuable, it should be supported.
When we manage the three major factors driving costs, we need to see if these factors bring added value. How to find the best balance between added value and cost is the test for purchasing managers.
Hospitality disposable razors distributor and manufacturer, WangLi Shaver Manufacturing Company is specialized in plastic manual disposable razors. Welcome any inquiry from travel products bulk wholesaler, hotel amenities distributor and grocery stores chain supplier etc. Welcome any inquiry or comments.