Develop procurement budget and estimated cost 1. Formulate a budget definition The act of budgeting is to allocate scarce resources to various tasks within the organization. Budget is not only an aspect of planning activities, but also an extension of organizational policy. It is also a control mechanism that plays a comparative role. The formulation of the procurement budget is an estimate and forecast of the project procurement cost before the specific implementation of the project procurement behavior, and is a rational plan for the entire project funds. 2. The role of the procurement budget The formulation of the procurement budget not only rationally allocates and distributes the project procurement funds, but also establishes a standard for the use of funds in order to detect and control the use of funds in the procurement implementation behavior to ensure the use of project funds is certain. Floating within a reasonable range. With the constraints of the procurement budget, the efficiency of project funds can be improved, the allocation of resources in project procurement management can be optimized, some exceptions in the process of using funds can be found, and the flow and flow of project funds can be effectively controlled to control the procurement cost of the project. the goal of. Supplier selection Suppliers are an important part of project procurement management. Purchasing should provide equal opportunity for all eligible contractors based on the principle of “fair competitionâ€. On the one hand, it reflects the rules of market economy operation, on the other hand. It can control the procurement cost and improve the quality of project implementation. Therefore, there are two issues in the selection of suppliers that are worthy of attention: 1. Select the number of suppliers The question of the choice of the number of suppliers is actually the sharing of the share of suppliers. From the perspective of the purchaser, the single source of supply increases the risk of project resource supply, and it is not conducive to the price reduction of suppliers and the lack of procurement cost control. From the supplier's point of view, due to the quantitative advantage, the bulk supply can give the purchaser a commercial discount, reduce the payment of the payment and purchase additional costs, which is beneficial to reduce cash outflow and reduce procurement costs. Therefore, in the choice of the number of suppliers, it is necessary to avoid a single source of supply, seek multiple supply, and at the same time ensure that the selected suppliers have sufficient supply shares to obtain the preferential policies of suppliers and reduce the price and procurement cost of materials. . This will not only ensure the quality of the procurement of materials, but also effectively control the procurement expenditure. In general, the number of suppliers is not more than 3-4. 2, the way to choose suppliers The methods of selecting suppliers mainly include open competitive bidding procurement, limited competitive bidding procurement, inquiry procurement and direct contract purchase. The four different procurement methods are classified into bidding procurement and non-bidding procurement according to their characteristics. We believe that the use of open tendering in project procurement can use the competition between suppliers to lower the price of materials and help purchasers to obtain goods that meet the requirements at a low price; and the reasonable combination of various tendering methods will also have Helps improve procurement efficiency and quality, which helps control procurement costs. Use of procurement environment 1. What is included in the external environment? The external environment of the project will have an important impact on the formulation of the procurement strategy and the implementation of the procurement plan. The external environment includes the macro environment and the micro environment. The macro environment refers to external changes that can affect the project organization and how to purchase, including seasonal changes in the market, changes in national macroeconomic policies, adjustment of national fiscal and financial policies, fluctuations in market interest rates and exchange rates, and the existence of inflation. Various factors such as war and strike. The micro-environment refers to the internal environment of the project organization, including the organizational policies, methods and procedures that the project organization may adopt in procurement, that is, the process and procedures for implementing procurement. Under the premise of meeting the micro-environmental principles, a good project procurement strategy should make full use of the external market environment to bring benefits to the project as a whole. 2. How to use the procurement environment? An important part of making the most of the procurement environment is to be familiar with market conditions, understand market conditions, and have access to a wide range of market information on the goods and services required for the project. For example, in combination with the type of goods or services purchased, performance parameters, quality, quantity, price requirements, etc., to understand the price and supply and demand information familiar to the domestic and international markets, the source of supply and demand of the products, the foreign exchange market, and the international trade payment method. Information and information on domestic and international trade knowledge and business, such as insurance contracts. This requires the project organization to establish relevant market information mechanisms to achieve the purpose of effectively utilizing the procurement environment. Good market information mechanisms include: Establish a database of important supplier information so that you can find the right suppliers and the specifications and performance of the products or services of these suppliers and other reliable information when needed. Establish a price list of the same type of goods so that buyers can make comparisons and choices and make full use of competitive methods to obtain price benefits. Analyze and research market conditions and make predictions of market changes, so that buyers can have a reliable and effective basis for reference when formulating procurement plans, deciding how to issue packages and what procurement methods to adopt. Only by establishing a good market information mechanism can we achieve “knowing ourselves and knowing each other†in project procurement, and have a full understanding and grasp of the procurement environment, which enables buyers to be in a strong position of both supply and demand, and obtain price advantages, not only Achieving high quality goods or services can also achieve cost benefits. Supplier management Starting from the concept of long-term reduction of procurement costs, the idea of ​​“supplier management†should be carried out in the procurement management of the project, that is, the management of suppliers should be included in the part of project procurement management. This can be achieved through long-term cooperation to obtain reliable supply and quality assurance, and the advantage of obtaining the purchase price in terms of length of time and purchase volume, which is of great benefit to reducing the cost of project procurement. There are two points worth noting: 1. Establish a direct strategic partnership with suppliers For the purchaser, once a supplier can be established for long-term cooperation, a direct strategic partnership should be established with the supplier. The two parties have established a win-win cooperation relationship based on the principle of “shared interests and shared risksâ€, so that the purchasers can obtain the guarantee of supply and the cost advantage in the long-term cooperation, and also make the suppliers have long-term stability. Customers to ensure the stability of their output scale. The establishment of such a strategic partnership can bring long-term and effective cost control benefits to the purchaser. 2. Performance management of supplier behavior In the process of cooperation with suppliers, performance management of suppliers should be carried out to evaluate the quality of suppliers' supply behavior in the process of cooperation. For example, establish an information system for supplier performance management, rate suppliers, establish quantitative supplier behavioral performance indicators, etc., and use performance management results to measure follow-up cooperation with suppliers: increase or decrease supply share, and extend Or shorten the cooperation time, etc., and encourage and reward the suppliers. This will enable suppliers to continuously improve their supply behavior and ensure timely delivery, thus effectively reducing the total cost of project procurement. Full process cost concept 1. Based on the concept of full process cost, explore the issue of procurement cost When discussing the problem of cost reduction in project procurement management, the concept of full process cost should be established. What we should pay attention to is the cost reduction in the whole project procurement process, which is the control of total cost, rather than a single target for purchasing goods or The price of the service. Obtaining low-priced purchases is certainly a cost reduction, but the services obtained, timely and fast delivery, and reliable supply guarantees are undoubtedly gaining cost benefits. 2, considering the procurement cost must take into account multiple interests At the same time, reducing procurement costs means not only reducing the cost of the procurement project itself, but also the interests of the relevant parties. The cost is like the mercury in the U-tube, the cost of compressing it, the cost there increases. Reducing a certain cost separately without regard to other aspects of the response, this cost reduction is not reflected in the profit of project procurement management. Therefore, the concept of such full process cost needs to be established to achieve control and reduction of the total cost of procurement management of the entire project. We should not only see direct cost reduction, but also measure the cost-effectiveness from the whole process of project procurement, and explore effective measures to reduce the total cost from the whole process of project procurement. Only in this way can we explore the ubiquitous opportunity to reduce costs in the procurement process.
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In this paper, we will discuss some measures to reduce procurement costs in project procurement management from the perspective of cost control. 
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Purchasing is an important part of the supply chain. In soft pack manufacturing enterprises, equipment, film, raw and auxiliary materials are essential elements for the production of packaging bags, accounting for 70% to 80% of the total cost. Such high production costs mean that procurement and quality control are the key to improving the profit margin of the soft pack industry. Therefore, as a professional department of soft bag procurement, it is particularly important. It is necessary to do a good job in procurement management, and to conduct detailed investigations on the market of soft-package raw materials, and effectively assist enterprises to control production costs and capital turnover.