dc.description.abstract | The commercial applications TFT-LCD has developed since the 1990s’, and is currently in mature stage with relatively slow growth. While emerging markets and new applications have kept its growth momentum, the maturing manufacturing processes and the relatively stable market have caused intense competition among the key players, and thus suppressed the gross margin of the entire industry.
The subject of this study is one of the leading player of TFT-LCD industry in the world, both in technology and capacity. Yearly revenue of this company had exceeded NT$100 billions. In the TFT-LCD industry, the majority of the cost of goods sold comes from materials. A small reduction in procurement costs will contribute heavily to the gross margin and profit. Thus, the goal of this research is to attempt to redesign the procurement cost management model, aiming to effectively control the cost of materials and enforce this new management mechanism.
The core of building up this procurement cost management model is to provide transparent information for decision making, by consolidating all relevant information. Using a single contact window and linking employees’ performance assessment to cost reduction will let procurement officers change their habits of operation to fulfill the business target of the management team. The result is a tight coupling among authorization mechanism, management objective, and employee performance.
This study also discusses the critical success factors for the proposed reform. In addition to utilizing the existing foundation of the company and the chance of severe competition externally, the most important is the new management model effectively solve the issues in the current environment and meet the expectation of the management. Besides, the original organization and business processes do not require too much change, which reduce potentially forces for resistance.
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