Apr. 30, 2021 - The price of raw materials continues to rise, and the rise in business costs has become inevitable, especially the rise in copper prices has a great impact on sanitary ware companies.
For example, according to Huida’s 2020 annual report, the company’s hardware & sanitary ware production cost increased 24.01% compared with the same period last year, which was higher than the production cost changes of sanitary ceramics, bathtub shower room, wall and floor tiles, bathroom furniture and other categories.
In order to reduce operating costs, it is necessary for companies to adopt flexible procurement policies to avoid risks. Hansgrohe mentioned in the price adjustment letter that the company has adopted an active procurement policy and increased inventory at the same time to offset part of the cost increase.
The same is true for domestic enterprises, Huida adopts two methods of long - term procurement and temporary procurement. For bulk raw materials, it has established long - term cooperative relationships with major suppliers, clarified long - term prices and established strategic reserves for centralized procurement of key raw materials. For auxiliary materials, packaging materials, etc., it is necessary to comprehensively consider price, quality, delivery and other factors in real time according to specific needs.
RUNNER also said that the company generally purchases based on actual product orders or predicted market demand, and the competent department submits a purchase application based on the ordering demand, and the supply chain management center implements the purchase. In addition, the supply chain management center will track and analyze the market conditions of major raw materials in a timely manner, and implement strategic purchases.