Discussion on Comprehensive Control of Material Cost (Part One)

The deepening of the competition in the printing market has made it more important than ever to improve product quality and reduce production costs. Material costs are the major component of direct costs for printing companies. Doing material cost control becomes an increasingly important issue in corporate management.

When it comes to cost control, people first think of improving the management level and reducing the consumption of raw materials. When talking about improving product competitiveness, people will naturally associate with the increase in management costs and the increase in raw material costs. Now, the quality of printing raw materials has been greatly improved, products have become more diversified, and procurement has more choices, making it possible to reduce the cost of raw materials under the premise of steadily improving product quality. This requires a comprehensive consideration of the relationship between the quality, service life, and price of raw materials to find a reasonable point, so as to achieve the purpose of reducing the cost of materials.

Material cost comprehensive control

In equipment management, there is integrated equipment management engineering, which requires a unified examination of the entire life cycle of the equipment. In the economic evaluation of equipment purchase, we emphasize the comparison analysis of purchase costs and usage costs, including expected returns from equipment operation, and use the annual fee method, investment payback method, and present value method to evaluate the plan, so as to select the most technical Good and economical equipment purchase plan. By using this concept and applying it to the economic evaluation and cost control of material procurement, a comprehensive management project for material procurement costs can be temporarily called for. By comprehensively considering purchase cost, use cost, quality cost, and other factors, the material procurement within a certain period of time can be analyzed. The comparison of the input and return of income, the selection of the best technical, the most economical material procurement portfolio.

At present, the biggest problem encountered in the realization of integrated management is the decentralization of functions of the department. In most enterprises, the procurement of raw materials and technical and quality work are often attributed to different departments, and even different managers. The purchasing department is more concerned with the reduction of direct procurement costs, and the technical or quality department wants to use more high-quality, high-grade materials in order to improve print quality and reduce process accidents. It is difficult to unify the two aspects. The relationship between material quality and print quality is naturally not to be said, but the question is how to determine the degree of impact. Moreover, different departments will have their own departmental interests and ways of thinking, and their evaluation and judgment standards will vary from person to person. Therefore, to properly handle the relationship between material procurement cost control, quality, and process requirements, it is necessary to unify the responsibilities of these departments, not to belong to the same department, and to be led by at least one director. This is convenient for comprehensive consideration.

For example, from the perspective of reducing cross-functionality, the Legal Daily Printing Company handed over the direct machinery business such as press parts and rubber rollers to the head of the equipment department a few years ago. They purchased more imported components and better domestic products. The cost of direct procurement on the surface has increased, but in a few years, the total purchase cost of these materials has dropped. Because the service life of these devices is much longer than the domestically produced low-cost devices that were originally emphasized on the direct purchase price, the use cost is reduced, thereby effectively reducing the overall cost. At the same time, they also actively carried out domestic self-manufactured processing work. Because they can proceed from technical specifications, some of the components that were trial-produced were fully up to the import level, and on the other hand, they reduced the procurement costs.

Quality cost and price

The printing industry is a processing industry, and product quality is the company's core competitiveness. With the intensification of competition, quality cost has become a cost content that companies cannot ignore. The quality of printed products is directly related to the rational selection of printed materials. Therefore, it is necessary to consider quality costs and material procurement costs together. The main way to reduce the cost of quality is to perform the quality function of material procurement well. Material procurement should provide an early warning function for quality control.

Each of us is aware of this principle. The quality and price of printed materials are proportionally increased. The higher the price, the better the quality of the materials will be, and the quality of production processes, environmental protection, and printing quality will all be great. Improves the quality of the final printed product. Some companies have long-term use of low-cost domestically produced materials, while others have been using higher-priced imported materials. Some companies have adopted imported materials at some key points, and some have used more domestic materials at some critical points. This is caused by differences in the understanding and understanding of quality costs. The manager must proceed from the whole, reasonably calculate the quality cost, and consider the material purchase cost and quality cost together.

Quality costs are divided into direct quality costs and indirect quality costs.

1. Direct quality cost

The influence of printed materials on the quality of printed matter is direct. To produce high-quality printed matter, high-quality materials are needed. The improvement of the process can solve some quality problems to some extent, but the stable improvement of quality still requires suitable material selection. Guarantee. High procurement costs do not always mean high total material costs. Take the folding machine used by manroland rotary printing press as an example. The domestic imitation cutter costs about 20 to 40 yuan, and the original imported knife is about 500 yuan. The price difference is more than 10 times. In terms of service life, The import knife should be about 5 times longer. And changing a knife will increase the working time by about half an hour. If a failure occurs during printing, it will affect the time efficiency of production, and the quality cost will far exceed the price of an imported knife. Another example is the PS version, the use of high-grade media, network reproduction and reproduction of good quality, high resistance to India, the printing plate failure, such as off the version, off the plate, etc. is very low. Low-grade domestic media is prone to plate failures, and the inhalation and exposure latitude during platemaking is also lower than that of high-quality media. Therefore, the use of a good PS version is effective in improving the quality of prints and reducing the scrapping rate. This combination will probably result in a higher purchase cost and quality cost for a batch of low-cost materials than the total cost of premium materials. Because of the high quality and cost of low-quality materials, it is often cost-effective to use high-quality but relatively expensive materials. The direct quality cost is intuitive and easy to calculate and can be the main reference for procurement.

2. Indirect quality costs

The indirect quality cost is mainly due to the loss of customers due to low quality, declining competitiveness, and increased complaints. Its impact is not directly reflected as a capital item, but it is a long-term impact on the competitiveness of the company and needs to be taken seriously. Therefore, the selection of material procurement also needs to consider the issue of indirect quality and cost. With the guidance of the company's quality policy, a material quality evaluation system should be formed to rationally select materials.
There is also a need to pay attention to such a problem: We tend to think that price and quality are directly proportional, but it is not always true. Judging from experience, the level of quality improvement of general materials will be higher than the price increase. As a manufacturer, this encourages users to actively purchase high-quality products because relatively high-quality products have higher profit margins. Moreover, the quality of products is more related to the enterprise management of producers, and the well-managed enterprises are produced with good quality materials, and their direct costs are not necessarily high. When a printing company attaches great importance to product quality and regards it as the core competitiveness of the enterprise, it becomes an inevitable choice to use more high-grade materials.