Post on 16-Oct-2020
Sinopec Procurement Division
Introduction to Sinopec Procurement (Material Supply)
Management
Sinopec Procurement Division
Introduction of Material Supply Management
I. Brief Introduction to Sinopec
II. Procurement Management System
III. Procurement Operation Mode
IV. Core Concept of Material Supply
V. Supplier Relations Management
VI. E-Commerce
VII. Project and Business Opportunities
Sinopec Procurement Division
Sinopec is a vertically integrated energy and chemical companywith upstream, midstream and downstream operations. Itsprincipal business includes exploring, developing, producing andtrading of crude oil and natural gas; and, manufacturing andmarketing of petroleum products and petrochemical products. In2018, Sinopec ranked 3rd among the world's Fortune Global Top500 companies.
In 2018, Sinopec produced 250 million barrels of crude oil and1000 billion cubic feet of natural gas; processed 244 million tonsof crude oil; produced 11.51 million tons of ethylene; and sold 198million tons of oil products.
I. BRIEF INTRODUCTION
Sinopec Procurement Division
One Unit
Two Levels
Three Platforms
Seven Unifications
“One Unit, Two Levels, Three Platforms, Seven Unifications”
• Sinopec Procurement Division
• Corporate
• Subsidiary
• For domestic trade
• For global trade
• Supply Management
• Operation Mode
• Management Rules
• Procurement Process
• Supplier Management
• E-Commerce
• E-Bidding
• E-Commerce
I. BRIEF INTRODUCTION
Sinopec Procurement Division
Integrated Management
Consolidated Settlement
Centralized Procurement
Unified Reserves
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Sinopec Procurement Division
Integrated Management by Specified Departments One enterprise leader is in charge of the procurement and material
supply.
One procurement department is responsible for the specializedmanagement of materials for production and construction.
Includes: Regulation Construction, Supplier Relations Management,Price Control, Inventory Management, Performance Evaluation, etc.
Centralized Procurement One procurement department is responsible for the centralized
procurement of materials for production and construction.
Construction Principle of Material Supply Management System
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Sinopec Procurement Division
Unified Reserves One procurement department is responsible for the unified reserves
and delivery of materials for the production and construction.
Consolidated Settlement Procurement funds are allocated by one material supply management
department.
Construction Principle of the Material Supply Management System
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Sinopec Procurement Division
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Procurement Division of both
-Sinopec Group and Corp.--Sinopec International Co., Ltd.-
13 Oilfields 37 Refineries, petrochemicals
10 Specialized Co. and PD
9 Joint ventures
12 Service companies
8 Engineering companies
8 Research Institutions
Structure at Subsidiary Level
A total 97 entities set up procurement departments.
A total of 97 entities make up the procurement departments.
The procurement departments are set up by a total of 97 entities.
Sinopec Procurement Division
Sinopec Procurement Division (Sinopec International Co., Ltd. )
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Procurement Division of Sinopec Group
Procurement Division of Sinopec Corp.
Sinopec International Co., Ltd.
One Organization
with
Three Name Plates
Sinopec Procurement Division
Sinopec Procurement Division
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Rules regulation, procurement organization, subsidiaries management and appraisal.
Direct centralized procurement for bulk material, standardized equipment and for
supply of key projects.
Import and export of refinery by-products, catalysts, lube oil, equipment and materials
other than crude oil, oil and chemical products.
Procurement Management
Centralized Procurement
International Trade
Functions at Headquarter Level
Sinopec Procurement Division
Procurement ManagementResponsible for the integrated management of Sinopec’s materialsupply, including regulation construction, structural reform andmechanism optimization; procurement strategies establishment;guidance, coordination and supervision of subsidiaries’ materialsupply.
Centralized ProcurementResponsible for the centralized procurement of commodity, generaland key materials for the production and construction of SinopecGroup, such as coal, chemical agents, steel, compressors, reactors,etc.
International Trading BusinessResponsible for the unified management of the import and exportbusiness and the third-country trade of Sinopec Group, in addition tocrude oil, oil products and chemical raw materials.
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Sinopec Procurement Division
Functions of the Procurement Departments (Material Supply) inSubsidiary Companies
Procurement Management of Subsidiaries
Regulations establishment, guidance, coordination and supervision of theexecution.
Integrated management of the implementation of purchase plan, along withother specialized work such as management of suppliers, commodity priceand quality, inventory, etc.
Collection and compilation of the internal demand for centralizedprocurement materials, which is to be submitted to the headquarters.
Centralized Procurement at Subsidiary Company Level Centralized procurement and unified reserves of materials for production
and construction. Inspection, storage, delivery and on-site service for purchased materials.
II. MANAGEMENT SYSTEM OF MATERIAL SUPPLY
Sinopec Procurement Division
III. PROCUREMENT OPERATION MODE
Direct Centralized Procurement by Sinopec HQ
• Variety: Coal, petroleum
geology special pipes,
compressor units, reactors and
other important materials.
• Operation: The Procurement
Division (International
Company) signs contracts and
implements procurement.
Centralized Procurement Organized by Sinopec HQ
• Variety: Chemical agents,
seamless steel pipes, heat
exchangers, valves, cable and
other bulk commodities.
• Operation: The Procurement
Division (International
Company) organizes the
negotiation between
enterprises and suppliers,
determines the purchase price,
signs the framework purchase
agreement, and implements the
purchase according to the
agreement.
Procurement by Subsidiary Companies
• Variety: Materials besides
those included in the catalogue
of centralized procurement by
Sinopec HQ.
• Operation: Procurement shall
be carried out by enterprises in
accordance with the unified
requirements, procedures, on
the unified platform and within
the unified supplier network.
Three Types of Procurement
Sinopec Procurement Division
Process of Direct Centralized Procurement by Sinopec HQ
② Sign purchase contract
Sinopec Finance Company
⑦ Capital allocation
⑥Settlement request
④ Acceptance and quality confirmation
⑤ Payment
ProcurementDepartment
⑧ Capital allocation
Procurement Entity:
Procurement Division
(International Company)
Supplier
① Submit purchase request
③ Delivery
III. PROCUREMENT OPERATION MODE
Capital flowInformation flow Logistics flow
Sinopec Procurement Division
Process of Centralized Procurement Organized by Sinopec HQ
② Submit purchase request
③ Place purchase orderafter balance inventory
供应商
Procurement Entity:
Procurement Department
at Subsidiary levelSubsidiary’sFinance Department
⑥ Settlement request
⑦ Payment
Supplier
Material Required-Subsidiary-
Procurement Division
(International Company)
① Procurement agreement
④ Delivery, acceptance and storage
⑤ Delivery
Capital flowInformation flow Logistics flow
III. PROCUREMENT OPERATION MODE
Sinopec Procurement Division
② Sign purchase contract
供应商
Procurement Entity:
Procurement Department
at Subsidiary level
⑤Settlement request
⑥ Payment
③ Delivery, acceptance and storage
① Submit purchase request
④ Delivery
Process of Procurement by Subsidiary Companies
III. PROCUREMENT OPERATION MODE
Material Required-Subsidiary-
Subsidiary’sFinance Department
Supplier
Capital flowInformation flow Logistics flow
Sinopec Procurement Division
Advantages
Enhanced bargaining power against coal mines, steel works
and manufacturers.
Cultivated group of strategic suppliers, domestically and
aboard.
Strengthened capability of securing resources, price
negotiation and risk controlling.
III. PROCUREMENT OPERATION MODE
Sinopec Procurement Division
Safe Supply
IV. CORE IDEOLOGY OF MATERIAL SUPPLY
Sinopec Procurement’s Value Orientation:Safety First; Timely Second; Economic Third
• Safety First
Guarantee the operational and environmental safety of the plant
• Timely Second
Ensure uninterrupted construction and production
• Economic Third
Control the operational costs of the plant
Sinopec Procurement Division
-- Fundamental Principle of Procurement Cost Control
Best Price/Performance Ratio, Lowest Overall Supply Cost
IV. CORE IDEOLOGY OF MATERIAL SUPPLY
• Best Price/Performance Ratio
Prevent material quality and function surplus, prioritize on material quality
and avoid pursuing excessively low purchase price unilaterally.
• Lowest Overall Supply Cost
Pursue the lowest total cost of the whole life cycle of materials, paying
attention to the service life, maintenance cost, reserve capital occupation,
logistics transportation, energy consumption, technological progress,
environmental protection, safety and other costs and factors, besides the
purchase price.
Sinopec Procurement Division
-- Fundamental Principle of Procurement Operation Mechanism Construction
IV. CORE IDEOLOGY OF MATERIAL SUPPLY
Specialized Division of Labor, Process-oriented Operation
• Tripartite System of Procurement Operation: the powers of supplier
selection, price determination and payment request are separated.
• Business operation mechanism established with division of execution,
supervision, and management.
• Shift the focus to demand analysis, market research, supplier
management and process control, strengthen the professional
management function of material supply.
Sinopec Procurement Division
• The supplier is the source of security, quality and risk of resource, to a
certain extent, determines the cost competitiveness of the enterprise and
is an important external resource for the survival and development of an
enterprise.
• The establishment of relatively stable cooperative relations with
competitive suppliers to form a benefit chain of risk and benefit sharing
and common development, fundamental for assuring the reliable and
stable resource for enterprises, thus, ensuring safe, timely and economic
supply.
Win-win Cooperation-- Basic Principle of Supplier Relations Management
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Entry Qualification Management of Suppliers
Open to all -- supply services are open to all, suppliers can apply to participate
in Sinopec’s procurement activities.
Qualification review – a qualification check and supply and service capacity
review will be implemented for suppliers looking to participate in procurement.
Quantitative evaluation – integrated evaluation of suppliers on credit
certification, quality evaluation, dynamic performance and market performance
according to Epec Standard.
Resource sharing – the unified resource management platform has been built
for Sinope’s material purchase and supply, thus, guaranteeing the sharing of
resources within Sinopec group.
Win-win cooperation -- as an important external resource, the partnership and
cooperative relation with suppliers are highly valued to achieve mutual benefits.
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Supplier Search
Registration
Basic Information Review
Qualification Review
Qualification Approved
Registration on Epec (https://www.epec.com)
Qualification verification includes certification review and on-site inspection, organized by the Procurement Department.
Assigns the relevant material categories in the System’s products catalogue for approved suppliers.
Supplier’s Entry Qualification Management
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Directory Management
Based on the supplier’s core products
assign the supplier the product catalogue
Procurement according to the supplier’s product catalogue
Periodically inspect documents related to the assignment of supplier’s product
catalogue
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Evaluation Management of Suppliers
Credits Certification, in cooperation with 3rd party credit rating agencies,
grants comprehensive rating, based on the assessment of basic qualifications,
business performance, financial situation and credit record.
Quality Evaluation, in cooperation with 3rd party quality evaluation agencies,
assesses product quality regarding qualification, capacity, quality assurance,
and performance test.
Dynamic Performance, evaluates product quality, service, and delivery, the
results reflect the suppliers’ transactions and compliance to contracts, which
are updated and shown in real time.
Market Performance, with big data technologies, the evaluation results
showing the recognition, procurement strategies and innovation of the suppliers,
will be updated and showcased in real time.
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Punishment of Faulty Suppliers
Risks Alarm
Warning Internal Notice Suspension
Disqualification
Cheating, fake products,bid-rigging, bribing, serious
late delivery or qualitydefects causing severe
economic loss.Correctiveaction bysuppliers.
Substantial loss ornegative effect.
V. SUPPLIER RELATIONS MANAGEMENT
Sinopec Procurement Division
Sinopec E-Commerce System Structure
`
Plan
ERP
Settlement
Standardized Coding(MDM) Contract Management System(CMIS)Supply Resource Management System
EPEC
Data Warehousing
BWBusiness Publicity System
Collaborative Workbench
Procurement
E-Commerce Systems
EC5.0
Electronic Bidding and
Tendering System
VI. E-COMMERCE
ERP
Sinopec Procurement Division
The largest B2B procurement e-commerce platform in China
Online Users: over 81,000
Online Transaction Products: over 3,22 million varieties
Online Total Transaction Volume: over 2.3 trillion CNY
Sinopec Procurement E-Commerce Platform
VI. E-COMMERCE
Online purchase order submission, inquiry, supplier quotation,procurement plan formulation and approval, contract elementformation and supplier evaluation are executed online.
Sinopec Procurement Division
Procurement
6
4
2 7
1 Demand Confirmation
Acceptance and Inventory
Management
8 Payment
3 Supplier Selection
10 20 30
采购订单
10 20 30 Order Operation
供应商
5 Order Monitoring
采购订单
10 20 30
?
Invoice Verification
采购申请
Resource Confirmation
MRO Module in ERP
VI. E-COMMERCE
Sinopec Procurement Division
Supplier Management System
Sinopec Material Supply and Resources Management Regulations
Supplier Search: Supplier self-registration and global supplier search.
Qualification Verification: includes certification review and site inspection, prevents
and controls supply risk from source.
Dynamic Evaluation: supplier performance summary and dynamic quantitative
assessment.
Hierarchical Management: according to the evaluation of suppliers.
Resource Sharing: Sinopec's unified supply resources ensure the accuracy and
completeness of supplier information.
Basis for purchasing decision: results of supplier transaction, evaluation and classification.
VI. E-COMMERCE
Sinopec Procurement Division
Supplier Sourcing
Supplier
Registration
Grading and Assessing
Management
Dynamic Evaluation of Supplier
Performance
Integrated Query
Archives Query
Supply Amount Query
Supplier Management Report Query
Supplier Classification
Query
Business Process Query
Supplier Historical Data
Query
Qualification Examination and Catalogue Review
Application for Catalogue Review
Modifications in the Categories
System Management
User Management
User Group Management
User Limit Management
Performance Query
Updated Product Categories
Application for Examination
Approval of Examination
Supplier Sourcing
Supply Resource Hierarchical
Management
Notification of Defaulting Suppliers
EpecRegistration
Supplier Management System
VI. E-COMMERCE
Sinopec Procurement Division
① Online Member Registration
② Select Member Identity
③ Submit Basic Information
Company Information
Procurement Manager Information
Contact
④ Verification
Registration
Supplier Management System
VI. E-COMMERCE
Sinopec Procurement Division
Product Code Management
Centralized management of product codes used within the System,synchronized to each material supply management information systemthrough the interface between systems.
VI. E-COMMERCE
Sinopec Procurement Division
BW System
Integrating of e-commerce systems,ERP, Epec and othersystems.
Real-time monitoringof procurement andinventory.
Cross-enterprisessharing of purchaseprice and inventoryinformation.
VI. E-COMMERCE
Sinopec Procurement Division
Upstream Projects:
Southwest shale gas project construction
North China natural gas and Northwest crude oil productioncapacity construction
Tianjin LNG
Wen 23 gas storage construction
New Guangdong-Zhejiang Pipeline Phase I
Erdos-Anping-Zhangzhou Pipeline Phase I
Construction of overseas oil and gas project
Project Investment
In 2018, Sinopec arranged a project investment of *** CNY.
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Sinopec Procurement Division
Downstream Projects:
Zhongke refining and chemical project construction
Zhenhai, Maoming, Tianjin and other refinery structureadjustment
Gasoline and diesel national VI quality upgrade alkylationproject group
Gulei integration project
…
Project Investment
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
In 2018, Sinopec arranged a project investment of *** CNY.
Sinopec Procurement Division
Projects in 2019:
2 oil and gas field surface engineering projects
19 refining and chemical projects
14 storage and transportation projects
2 research support facilities projects
In 2019, Sinopec plans to carry out 37 key construction projects(including project groups), and the project investment will increase to ****billion yuan
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Project Investment
Sinopec Procurement Division
Erdos-Anping-Zhangzhou Pipeline Phase I
Wen 23 Gas Storage
Zhong'an Coal Chemical
Hainan Aromatics Project
Zhenhai refinery structure adjustment
gasoline and diesel national VI quality upgrade alkylationproject
…
Projects that are scheduled to be delivered in mid-2019:
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Project Investment
Sinopec Procurement Division
Zhongke refining and chemical project
Gulei integration project
Zhongsha polycarbonate project
Yangzi EVA
Sino-Korean ethylene transformation
Refinery structure adjustment of Maoming, Tianjin, Luoyangand Jingmen
…
Projects that are continuing to be implemented in 2019 :
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Project Investment
Sinopec Procurement Division
Southwest Weirong shale gas project construction
Project group of Zhenhai Refinery
1 million tons/year ethylene of Hainan Refinery
Guizhou coal chemical project
Yangzi Wuhan Refinery structure adjustment
…
New projects started in 2019:
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Project Investment
Sinopec Procurement Division
Business Opportunities
Sinopec's daily production and operation and project construction require alarge number of large-scale key technical equipment, spare parts, materials,chemicals and other materials, and it is necessary to collect resourcesthrough the international market.
Upstream Projects:
Seismic exploration equipment, oilfield drilling and production equipment.
Downhole tools for offshore and high pressure land drilling rigs.
Metering skid, pressure skid and valves for oil and gas transportation.
High pressure pumps and low temperature valves for LNG project.
Analytical Software for oil and gas exploration.
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Sinopec Procurement Division
Downstream projects:
Compressor unit, reaction unit, heat exchanger and other high pressurevessels, pipeline and instruments for EVA plant.
Hydrogenation feed pump and high pressure pump for LNG plant, axial flowpump, etc.
Temperature control valve, orbit ball valve, cracking gas valve, plungervalves, etc.
DCS, analytical and testing instruments.
Environmental protection technologies, such as waste water control, airquality control, etc.
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
Business Opportunities
Sinopec Procurement Division
Sinopec will open supply services and procurement projects to all.
All transaction rules will be disclosed.
VII. PROJECT STATUS AND BUSINESS OPPORTUNITIES
We sincerely look forward to
cooperating with suppliers
around the world.
Sinopec Procurement Division
Thank you!