Must-read Introduction to Feed Purchasing: A Complete Book of Strategic Operation of Bulk Raw Material Purchasing

How to do a good job in bulk raw material procurement management and how to give full play to its two functions of raw material supply and profit creation in the operation of the group, this paper will discuss with you from two important aspects of bulk raw material procurement management-strategic management and risk control.

Challenges faced by feed enterprise groups in purchasing bulk raw materials under the background of globalization

1. The fluctuation of grain prices around the world is closely related, with violent and frequent fluctuations.

With the globalization and integration of the world economy, the fluctuation of commodity prices around the world is closely related. For example, since the beginning of this year, due to the sustained growth of the world economy, global inflation, global excess liquidity, the depreciation of the US dollar, the reduction of production in some major agricultural products producing countries, the sharp rise in crude oil prices, the speculation of international speculative funds and the increase in food demand in the biofuel industry, the prices of grain and products in the international market have continued to rise this year.

The relationship and influence between different varieties around the world are increasing. It is really "the hurricane in Louisiana, USA, which can set off huge waves in the global agricultural products market". In addition, due to the complex and interrelated factors affecting the price of grain products, the severity and frequency of price fluctuations of grain and products are aggravated, and the risk of purchasing bulk raw materials is greatly increased.

2. Three reasons make agricultural products destined to be tight commodity resources.

Agricultural products are destined to become "tight" commodity resources for three reasons: natural disasters, population growth and energy.

Bioenergy has not only ended the global food trade downturn that lasted for 20 years, but also brought the global food price into a long-term rising cycle, and is fundamentally changing the long-term business model and supply-demand pattern of the food industry.

Since 2003, the price of crude oil in the international market has risen sharply, and the output of bioenergy has expanded sharply. Grain has been endowed with new properties, and its energy properties are more prominent.

In addition, the frequency and influence of natural disasters will increase with the development of society in the future, which will greatly affect the normal supply capacity of global food.

For example, in the past five years, the climate around the world has been very bad. Australia, as the world's major grain exporter, has been suffering from persistent drought, and Ukraine, the world's eighth largest wheat exporter, also suffered from persistent drought the year before last, resulting in the failure of 400,000 hectares of wheat grains.

The consumption of food will also increase with the continuous growth of population and the "expansion" of people's consumption desire.

All these will lay a long-term foreshadowing for the contradiction between supply and demand of the whole agricultural products with grain as the main food, feed and fuel raw materials and the unequal status of bulk suppliers and buyers.

3. Capital and financial factors have become the "fundamentals" that bulk raw materials cannot avoid for a long time.

The fluctuation of price around value is the eternal law of commodity market, and the relationship between supply and demand is the most important factor affecting the long-term price of agricultural products.

However, capital and financial factors have played a great role in the trend of many commodities. For example, in addition to the reduction of planting area, natural disasters, rigid demand growth and other fundamental factors, other major driving forces are commodity funds, global inflation and the depreciation of the US dollar. The influence of capital and financial factors on commodity prices even exceeds the fundamentals in some cases.

It is undeniable that with the accumulation and concentration of the world's total wealth, the expansion of people's profit-seeking psychology, and the strong influence of a few countries on the global economy, these will increase the complexity and unconventional price fluctuations of the future agricultural products market.

Capital and financial factors have become the "fundamentals" that bulk raw materials cannot avoid for a long time.

4. The concentration of global commodity pricing "discourse power" will be higher and higher.

Due to the differences in natural conditions, historical resource endowments, high concentration of wealth and unbalanced global economic development, many agricultural products resources and their pricing power around the world will be increasingly concentrated in the hands of a few countries and organizations.

For example, the raw material futures market in capital countries such as Britain and the United States dominates the pricing power of bulk raw materials such as oil, metals and soybeans around the world.

"new york Oil", "London Copper" and "CBOT Soybean and Corn" have been recognized all over the world, and have been the pricing benchmarks for spot trading of oil, copper, soybeans and corn all over the world.

The global demand for agricultural resources has been growing rigidly, especially in developing countries such as China and India, which account for an increasing proportion in the global consumption of agricultural resources. However, these countries have not obtained the corresponding right to speak on prices and are in an extremely unfavorable position in the relationship between supply and demand.

The concentration of global pricing discourse power of bulk agricultural products will aggravate the weak position of developing countries in the procurement negotiations of bulk raw material demand groups in the future.

Problems existing in purchasing management of bulk agricultural products of domestic feed groups

1. There is no systematic risk management and control system for group bulk purchasing.

At present, many feed mills don't know enough about the importance of purchasing and the environment they are facing, and they still stay in historical memory, and they don't predict and evaluate the risks they are facing.

Many feed enterprises have not established a responsive and timely crisis management mechanism, and there are panic, helplessness or passive waiting when encountering risks.

Lack of systematic risk management and control system, the risk management and control system of this system should be a systematic project including risk assessment and prediction, measures preparation, risk management and control, sudden crisis risk treatment, and improvement of internal mechanism constraints.

2. There is no group control mode for high-risk bulk purchase.

At present, the feed group is generally composed of subsidiaries scattered in several regions, and the purchasing department is responsible for purchasing dozens of raw material varieties of the group. The influencing factors of each variety are different, and the geographical sources are also different. It is not an exaggeration to generalize them from all over the world.

Moreover, many varieties have a high concentration and are in the hands of a few organizations and countries, which is earlier than the buyer's market era. In order to improve efficiency, avoid risks for a long time and give full play to the overall advantages of the group, feed group should choose different management and operation modes according to the importance of different raw materials, the characteristics of suppliers, the maturity of management, the different supply and demand patterns, the length of procurement cycle and other factors, and decide the degree of centralization and decentralization.

At present, feed group has not established such an efficient, rapid response, moderate centralization and decentralization, and continuous optimization of group procurement control mode.

3. The understanding and management of procurement has not yet risen to the height of the enterprise's long-term strategy.

The main purpose of feed enterprise procurement is to maintain the normal production activities of enterprises and create profits by reducing the cost of raw materials.

Many enterprises have not yet reached the strategic level in their understanding of procurement, and believe that procurement management is a simple transaction to obtain the required raw materials at the lowest procurement price in a short time.

There is no way to take procurement as an important means to maximize the long-term interests of enterprises and raise their understanding to the height of long-term strategy.

The establishment of strategic procurement channels, the selection and training of more long-term stable suppliers, and the control of raw materials with tight supply and demand pattern are not well understood.

Without comprehensive consideration of long-term procurement strategic planning, any small tactical victory in front of us may be just a small victory, and what may be lost is the overall situation and the future.

4. Feed Group is short of bulk purchasing professionals.

However, the lack of professional talents has become the main bottleneck restricting the further promotion of feed enterprises' procurement. At present, compound talents who know business, management and have a global vision are very scarce in the industry.

In addition, many enterprises are eager for quick success and instant benefit, lack patience and training mechanism for patient training, and are rarely willing to take the risk of talent training.

There are also some large family-owned feed enterprises. Buyers are mostly cronies or relatives of the boss. They have no professional training and act only by loyalty and affection. Most of them are still at the level of simple bargaining.

5. Lack of scientific procurement performance evaluation system.

Many feed enterprises lack the means of purchasing performance evaluation and scientific purchasing performance evaluation system, which leads to many disadvantages, such as failure to reflect purchasing performance and lack of incentives for purchasing personnel.

In the end, business leaders don't pay enough attention to procurement, and the enthusiasm of procurement personnel is not high. Mr. Nanguo is more common.

Strategic guidance of bulk raw material procurement of feed group

1. links to pre-empt the global layout and involvement in raw material resources.

Due to the differences in natural conditions, economic development level and population, the global supply and demand of agricultural products will be concentrated in the future, and the contradiction between supply and demand in the region will become increasingly prominent.

As the largest grain consumer in the world, China will be in a tight supply and demand situation for some domestic agricultural products for most of the future.

This will make it more difficult for large feed processing enterprises to obtain raw materials continuously and stably. The bigger the enterprise, the bigger the elbow.

Therefore, it is a necessary and inevitable strategic choice for feed enterprise groups to regard bulk raw materials as long-term "resources" and set foot in the raw material resources business on a global scale, and regard the world as a chess game.

Analysis of many enterprises in Japan and the United States shows that they are often not greatly affected by the sharp rise in the prices of bulk raw materials.

A very important reason is that they have invested a lot of overseas resources and control a lot of raw material resources and networks.

With the gradual improvement of openness, domestic and international commodity prices will gradually converge, long-term global commodity price integration is an inevitable trend, and the dependence of many bulk raw materials on the international market will continue to increase.

While expanding the scale of enterprises, entrepreneurs in the feed industry should take a long-term view, especially for raw material resources (such as corn) that have not been fully opened, they should lay out the main points as soon as possible, lay a good foundation, "take precautions and occupy the position in advance", and make a global layout first and set foot in raw material resources.

Otherwise, today's soybean industry (foreign capital monopolizes most raw materials and domestic processing enterprises are subject to people) will be the tomorrow of many other agricultural products.

2 bulk raw material procurement should control other "key resources" other than raw material resources themselves.

At present, in addition to the value of raw materials, other factors, such as direct cost of transportation, convenience and timeliness of transportation, storage cost, etc., directly or indirectly account for an increasing proportion in the overall cost of raw materials.

Sometimes these factors have as much influence on the purchase of raw materials as the availability of goods.

Therefore, while paying attention to raw material resources, procurement management should pay more attention to other resources that have a great impact on procurement operation and cost, such as railway transportation, ports, docks, storage facilities and marine logistics.

From the perspective of long-term interests and long-term stable operation of enterprises, we should focus more on rationalization or control of these factors, such as the shareholding and holding of ports and terminals and the control of important storage facilities, so that we can take the lead in the procurement and acquisition of raw materials, gain convenience and realize low-cost operation.

To put it another way, judging from the investment benefits of these important resources, there is no loss.

3 feed enterprise group procurement should establish a strategic partnership with upstream enterprises.

It is our ideal goal to establish a relatively stable raw material supply chain, which is full of competition mechanism and can guarantee supply and quality.

In addition to directly participating in raw materials, it is also very important to introduce modern supply chain management theory and establish strategic alliances with suppliers who match themselves around the world to improve the stability of raw material supply, reduce procurement costs and improve procurement efficiency for a long time.

Therefore, we should strive to gradually change the simple business relationship into the establishment of strategic cooperation or partnership between the two sides, from competitive procurement to strategic procurement, and incorporate supplier management into strategic procurement management.

Depending on the operability and criticality, the cooperation mode may be tight (joint investment and risk sharing) or loose (contractual).

Countermeasures and models for risk control of bulk agricultural products procurement

1, the mode management of group procurement should be based on the principle of "concentration first, grasping the big and letting go of the small"

The design of group procurement mode should be based on the principle of "centralized procurement, supplemented by decentralized procurement", with unified pricing, unified policies, unified division of labor and unified personnel.

In the distribution of power between the upper and lower levels (groups and branches), we should follow the idea of "upper management decision-making, lower management implementation" and the principle of "grasping the big and letting the small". Give full play to the Group's advantages in information analysis and intelligence, and make full use of the information collection and execution capabilities of branches.

Because only in this way can we give full play to the advantages of the group's overall coordinated operations and concentration of superior forces, and avoid the situation of "repeated construction and fighting in the same room".

In the management of specific business, we should adhere to the principle of "macro-consistency and specialized division of labor", grasp each other's macro-knowledge and content about the global and national economic background, global fundamentals and long-term trends of major varieties, and maintain macro-consistency, not only because of the interaction between major agricultural products, but also help to find alternative opportunities between varieties.

It is necessary to maintain a highly specialized division of labor in the meso-research and micro-operation of various varieties in order to give full play to the technical advantages of different personnel, which is of course the need of risk management.

2. Build an overall industrial chain and fully control procurement risks.

Take the soybean industry as an example. Brazil is rich in soybeans, but China is short of soybeans. However, due to traffic problems, Chinese enterprises do not have their own docks and transportation equipment to transport soybeans out, and they do not control other key links in the industrial chain. In the end, they can only buy high-priced soybeans from international traders.

Japanese companies have done relatively successfully. After they found a grain-rich area in the Mississippi River, they built their own docks, shipped them back, processed them themselves and exported them without being controlled by others.

Another example is that international grain merchants headed by Bunge and Cargill control the production bases, export ports and docks, and purchase storage and transportation facilities of Brazil, Argentina and the United States, the three most important soybean producing countries in the world.

China's future grain processing market is bound to be a contest between some large private enterprises and large multinational groups. Fierce market competition will promote the competition between enterprises from point competition to the whole industry chain competition, and we can't just focus on one or two links, "not seeking the overall situation, not seeking a domain."

Feed enterprises should operate in advance, spread risks through the whole industrial chain, and realize the integration of raw material supply, purchase and sale processing and risk management, as many international grain merchants do.

Because the profit or value of the whole industrial chain is distributed from purchasing, warehousing, international trade and transportation, processing and distribution, and the processing link is at the end of the whole industrial chain, only stepping into this link will increase the risk in the competition, which will be an effective strategic choice to solve the risk of raw material procurement for a long time.

3. Make full use of various tools and adopt combined means for risk management.

The complexity and frequency of commodity price fluctuations will become more and more serious in the future. Due to the characteristics of agricultural products' own production, the long production cycle makes them lag in adjustment, which determines that their fluctuation range is often large.

However, at present, many feed enterprises are still insufficient in the use and development of tools to control the price risk of raw materials, and many enterprises only stay at the level of inventory management.

Controlling risks, realizing safe returns and maximizing reasonable profits are the business objectives of China's agricultural products processing enterprises, which requires us to take various measures to control the risk of raw material price fluctuations:

First, do a good job in inventory management with advanced methods.

It not only plays an important role in reducing capital occupation and financial cost, but also is an important means to control the risk of price fluctuation.

Second, we should make full use of the tool of hedging.

Whether it is a bull market or a bear market, we should constantly discover and analyze the opportunities to buy hedging, because the risk of callback in a bull market is also fatal;

Third, learn from international experience and try the basis trading model.

As a new trade mode, the trade mode of basis pricing can make feed enterprises have the pricing power of procurement, make them become passive in trade, and easily control the procurement cost according to the judgment of the market outlook, which not only reduces the uncertainty in procurement, but also saves the capital cost;

Fourthly, it is necessary to establish a systematic monitoring and management system for the procurement risks of bulk raw materials under the background of globalization.

Such as political risk, price risk, transportation risk, contract performance risk, quality risk, exchange rate risk, capital risk and policy risk. , should be analyzed one by one and incorporated into the risk management system, formulate detailed treatment plan.

Take an example of risk control through hedging: because the price of soybean meal is relatively low, the price of soybean meal began to soar after May, especially after August, with a huge increase of almost one price per day, which made feed production enterprises very passive, thus affecting production costs.

In this way, a feed enterprise has formulated a corresponding buying hedging scheme. The operation is as follows:

In April, a feed factory is expected to buy 5000 tons of soybean meal in late August or early September. Due to the limitation of warehouse and funds, it is impossible to buy 5000 tons of soybean meal at one time and store it in the warehouse for more than 4 months, but I am worried that the rising price of soybean meal will affect the operation of the enterprise, so I hedged it in the futures market. Specific measures are as follows:

On April 18, the spot soybean meal price was 2260 yuan/ton, and the soybean meal price on the futures market (Dalian Commodity Exchange) 1 1 month was 2500 yuan/ton (the selection of 1 1 month mainly considered the factors of trading volume). Traders only need to use a deposit equivalent to 5% of the spot price.

On August 28th, the spot price of soybean meal really rose from the original 2260 yuan/ton to 2860 yuan/ton (the highest is close to 2900 yuan/ton). At this time, each ton of spot soybean meal needs to pay more 600 yuan, totaling 3 million yuan.

The futures price of soybean meal purchased by the feed factory in the futures market rose from 2,500 yuan/ton to 2,900 yuan/ton on April 65, 438+08, and the profit per ton after liquidation was 2 million yuan.

In this way, the profit of the futures market partially makes up for the losses caused by the price increase in the spot market, and takes up less funds.

Obviously, if there is no futures hedging operation in the futures market, the feed factory will pay 2 million yuan for nothing (the specific operation is as follows).

The first step is to establish future positions.

Spot market futures market

On April 18, the spot soybean meal price was 2260 yuan/ton.

June soybean meal 1 1 price is April 18 2500 yuan/ton.

Operation: Buy 500 lots 1 1 month soybean meal at 2500 yuan/ton.

The required deposit: 2,500× 5 %× 5,000 = 625,000 yuan.

The second step is two-way operation.

Spot market futures market

On August 28th, the spot soybean meal price was 2860 yuan/ton.

On August 28th, the contract price of soybean meal 1 1 was 2900 yuan/ton.

Operation: Buy 5000 tons of spot at 2860 yuan/ton. Operation: Selling closed futures contracts at 2900 yuan/ton can make a profit:

Spot risk: 2860-2260) × 5000 = 3 million yuan

Futures profit: (2900-2500) × 5000 = 2 million yuan.

The third step is the effect evaluation.

Feed enterprises successfully saved 2 million yuan with less than 6.5438+0 million investment, stabilized profits and controlled risks.

4. From the long-term perspective of "external economy" to "internal economy".

At present, the whole feed industry lacks professional purchasing talents, which has a lot to do with the short operation time of feed factories in accordance with global game rules and the lack of long-term crisis awareness of enterprises when purchasing was in the buyer's market in the past.

To change this long-term shortage of talents requires the efforts of many enterprises in the whole industry, because when each enterprise trains talents, this behavior brings "external economy" from the long-term development of the whole industry.

When many enterprises do this, through the mutual flow of talents in the whole industry, all enterprises will eventually benefit from the "external economy" brought by other enterprises, which is equivalent to benefiting from their own behavior in talent training in disguise.

Of course, it is also necessary for those family-owned feed enterprises to introduce professional management thinking, and the talent selection and management mode should match the high risk under the background of globalization, so as to be conducive to the sustainable development and continue the glory of enterprises.