What is centralized procurement? What are its advantages and disadvantages?

The advantages of centralized procurement are:

(1) Centralized procurement can increase the quantity, improve the bargaining power with suppliers, and make it easier to obtain preferential prices and good services.

(2) There is only one procurement department, which makes it easier to uniformly implement procurement policies and operating rules.

(3) Centralized purchasing function to reduce manpower waste; Facilitate the training and training of purchasing talents; Specialized division of labor can reduce procurement costs and improve efficiency.

(4) Establishing the standard specifications of the same materials in all departments can simplify the types, exchange the required items and save the inspection work.

(5) The quantity of supply and demand can be planned as a whole to avoid fragmentation and excessive inventory, and the surplus materials of various departments can also be used for other purposes.

The disadvantages of centralized procurement are:

(1) The procurement process is too long and the time limit is delayed; Sporadic, regional and urgent procurement situation is difficult to adapt.

(2) The centralized procurement of non-* * same-sex materials does not enjoy quantity discount.

(3) The procurement is separated from the employer, and the procurement performance is poor. Such as specification confirmation, material transfer, time-consuming and labor-intensive.

The above is the centralized procurement method of manufacturing enterprises. In fact, centralized procurement is more widely used in chain retail enterprises, and is often carried out by the procurement and procurement Committee of this department.