Raw Material Procurement
Definition
Purchasing and supply management of production raw materials.
Historical Background
1990s: strategic procurement optimized costs and stabilized supply.
Example
Substrates, adhesives, release agents must be procured on time and on quality. Like logistics supply.
Formula
Procurement Cost = Material Price x Quantity + Shipping + Tax
Core Concepts
Key cost control point: raw materials account for 50-70% of total cost.
Extended Applications
Supplier management; price negotiation and contracts; quality inspection and traceability; safety inventory and EOQ; supply and price risk management.