What Are the Pros and Cons of Scatter Advertising?

Within the scope of government procurement, decentralized procurement refers to non-concentrated procurement of goods, engineering, and services beyond the centralized procurement catalog by the purchaser and above the limit.

Decentralized procurement

This entry lacks an overview map . Supplementing related content makes the entry more complete and can be upgraded quickly. Come on!

Within the scope of government procurement, decentralized procurement refers to non-concentrated procurement of goods, engineering, and services beyond the centralized procurement catalog by the purchaser and above the limit.

It can be organized by the purchasing unit itself, or it can entrust a purchasing agent.

But decentralized procurement is

Decentralized government procurement refers to procurement projects that implement a single item or bulk purchase of goods or services with a minimum limit of 500,000 yuan (excluding 500,000 yuan) and procurement approved by relevant procedures that exceed the procurement limit standard by decentralized procurement Item ^[1]

Level 2

Small batch, single piece, low value, total expenditure

The procedure of decentralized procurement is roughly the same as that of centralized procurement, except that the centralized decision-making link is eliminated and other steps are implemented. The production R & D personnel of the subordinate unit of the enterprise shall fill in according to the needs of production, scientific research, maintenance and office.

On the one hand, compared to decentralized procurement, centralized procurement is large in scale, good in efficiency, easy to obtain initiative, and easy to ensure the quality of purchases. It is conducive to the overall arrangement of the procurement of various items, the supporting arrangement of items, and the overall logistics planning and The reduction of procurement costs is conducive to obtaining support and guarantees from suppliers, reducing the unit price of items, and facilitating collective decision-making. In addition, centralized procurement also helps to increase the transparency of the procurement process and reduce the growth and spread of corruption. On the other hand, compared to decentralized procurement, centralized procurement has the disadvantages of large volume, long process, and multiple procedures, which easily lead to increased inventory costs, occupation of funds, disconnection between procurement and needs, increased storage losses, and higher requirements for storage standards, and easily hurt the grassroots. Enthusiasm, mission and innovation.

In the actual procurement, we must seek advantages and avoid disadvantages. According to the company's own conditions, resource conditions, and market needs, make flexible arrangements and actively innovate procurement methods and content, so that the company is in a favorable position in market competition.

When deciding on decentralized procurement, the following factors or criteria should be considered.

(1) Versatility of procurement requirements. The more versatile a business unit requires to purchase a product, the more benefit it will gain from a centralized or collaborative approach. This is why the purchase of raw materials and packaging materials in large companies is usually concentrated in one place (company).

(2) Geographical location. When operating units are located in different countries or regions, this can greatly hinder collaborative efforts. In fact, there are large differences in trade and management practices between Europe and the United States, and even major cultural differences exist within Europe. Some large companies have shifted from global collaboration strategies to regional collaboration strategies.

(3) Supply market structure. Sometimes a company chooses one or a limited number of large supplier organizations in some of its supply markets. In this case, the balance of power is definitely good for the supplier, and it makes sense to adopt a coordinated procurement method to gain a better negotiating position in the face of these powerful trading partners.

(4) Potential savings. The price of some types of raw materials is very sensitive to the quantity purchased, in which case buying more quantities will immediately lead to cost savings. This is true for both standard goods and high-tech components.

(5) Required expertise. Sometimes effective procurement requires very high expertise, such as in the procurement of high-tech semiconductors and microchips. As a result, most electronics manufacturers have centralized purchases of these products, as well as software and hardware.

(6) Price fluctuations. If the prices of supplies (such as juice, wheat, coffee) are highly sensitive to the political and economic climate, centralized procurement methods will be preferred.

(7) Customer needs. Sometimes, a customer will specify to a manufacturer which products he must buy, a phenomenon that is very common in the aircraft industry. These conditions are negotiated with the business unit responsible for product manufacturing, and this practice will significantly hamper any effort aimed at procurement collaboration.

In addition to the factors that need to be considered above, when choosing centralized procurement, it should also be conducive to the rational allocation of resources, reduce levels, accelerate turnover, simplify procedures, meet requirements, save items, increase comprehensive utilization, ensure and promote the development of production. It is conducive to mobilizing the enthusiasm of all parties and promoting the realization of the overall goals of the enterprise.

Of course, centralized procurement and decentralized procurement are not completely antagonistic. The objective situation is complicated. Only one procurement method cannot meet production needs. Most companies balance between the two extremes: at some point they will adopt a centralized procurement organization, and after a few years they may choose More decentralized purchasing organizations.