Research On The Project Procurement Management Of Petro-China Jilin Chemical Engineering Co. Ltd

This thesis studies the procurement management of Petro-China Jilin Chemical Engineering Co. Ltd. (JCC). Aim to establish a set of procurement strategy and model that in line with the development strategy of JCC, that is to say, within five years, we will develop JCC into domestic first class general Engineering Corporation.This thesis discusses the challenge and opportunities faced by the Engineering Corporation, and points out that since the innovation, the national economy of China has developed persistently. With the entrance of WTO, our investment environment turns to be revising. In this good situation, the demand of engineering contract market gets more developing chances. Moreover the government will give more room to the developments of all kinds of industries. Therefore, it is an inevitable trend to open the market furthermore. The bright prospects give lots of commercial chances to the rich economic and technical strength foreign companies. Because lots of foreign famous engineering corporations pouring into Chinese market, the challenge becomes internationally. In the same time, the international engineering contract market welcome China with open arms. A lot of limits have been canceled.Most-favored-nation can be enjoyed unconditionally and permanently among WTO members. Our engineering corporations get the entry qualification of the member country's project market. Consequently our engineering corporations get the chances to take the projects which invested by the host governments and private agencies. Therefore, our engineering corporations will get more chances to aboard construction projects. Clearly, there are opportunities and challenges coexisting. To show us out and beat the opponents depends on our general-contract capability, our engineering, construction and management capability. How to grasp the opportunities and meet the challenges is the most important thing for the engineering corporations to consider with.Among all kinds of managements in engineering corporations, procurement management plays a vital role. The thesis points out that, to engineering corporations, procurement management is the basis of goods and materials. It is also the key of success or failure. The procurement part directly influences the purchasing costs and the project's future economic benefits. Furthermore, the procurement department can contribute to the company indirectly through improving the performances of other departments or privates. The indirect influences contain lots of invisible improvements, like the information resource, the procurement efficiency, competitive position and the company image. Although, it is indirect, the significance is profound and lasting. It will effect the competitive position, efficiency and the customers'satisfaction. So we can say, procurement is not an independent department. It reflects the engineering corporations'competitive ability in many aspects. In the modern time, procurement, which had direct link to the market, becomes the value enhancement process. It reflects engineering corporations'market's innovative ability and value transferring ability.The thesis discusses the market competition environment and the market developing trend that the engineering corporations have to face. It also points out a way for the engineering corporations to beat the competitors in international market. The only way is to enhance the comprehensive ability, like the ability of procurement and construction, the ability of techniques, administration and finance, and the ability to offer various services.After a deep study on JCC, the thesis puts more focus on the company's developments. In the wake of in-depth study, the writer finds there are some weak points on JCC'S prevailing system. For example, compared with the other international contractors, JCC is weak on integrative service. It only focuses on construction and subcontract. JCC lacks of competition on the design-procurement-construction integrative service, short of qualified manpower, design and procurement ability on construction management, JCC is limited on contracting big projects. Obviously, the existing development layout and growth model can't achieve the final goal to make JCC the general engineering corporation. In this case, the thesis gives some researches on procurement management and operation system. Using the theory of institution innovation and modern management, the thesis gives an intensive discourse on JCC's procurement management system, organization set-up and management model. Finally, it sets up a model that fits for JCC's long-term development. The model is centralized procurement going with practicable organization, region distribution, and assignment management. To make a long run development for JCC, the thesis also gives some advisement about human resource management, and the management of the relationship between suppliers and customers. The suggestion also contains the set-up of information system and international procurement business development. Based on the modern management theory, the thesis gives the advisement on how to avoid the risks in procurement process. The best way is to maintain the project's materials'value.In the project contract market, the demand of construction & installation is kind of pyramid mode. On the top of the pyramid is the project management level based on information, proprietary technology, complete plant, procurement and comprehensive management. From top to bottom, the service needs reduces gradually. At the very bottom, the only demand is to supply construction and manufacture service. In consequence, the benefit of construction and installation goes down from top to bottom. Under this circumstance, lots of domestic construction & installation companies are out of the main stream. They can't locate their development direction exactly. Since China becomes the member of WTO, the competition between project contractors becomes more and more international. This leads to huge developing opportunities and severe challenges faced by construction and installation companies. The way for the companies like JCC to survive is to comply with the demand of international project market. They have to change the companies'operating system, adjust the operating structure, and build a practicable way for companies'development. In addition, they should attach importance to procurement and make procurement in the same level with design and construction or even higher. In this way, procurement becomes the operating core and main source of benefits. Only reform the procurement system, carry out the policy of centralized procurement, region distribution and assignment management, can make JCC keep itself on top and survive in the severe competition. Only in this way, can JCC more competitive and unbeaten. It is also the call from the modern enterprise management system.At the mean time, the thesis gives some suggestion about the procurement management reform for engineering corporations. Reform relies on the lead level, especially the chairman. The chairman has to realize the importance of procurement. Procurement is the key aspect for company's success in the competition and influence the company's long-term development. There is a common rule for management reform, that is the leaders advocate-the middle level administrators implement-create typical experience-expand in the organization-form a new institution-consolidate the new institution. Leaders advocating is the key step. The leader must be foresighted, general interests considered, getting rid of prejudice, incorrupt and self-discipline, reject all kinds of human relationships misprision and make sure the management reform successful. Meanwhile, the leader must take the responsibility of protecting owner's right and national assets safety. Besides, the leader has to revive the company. The procurement management ranges over all kinds of benefits. Up to a point, it is redistribution for rights and benefits. Definitely, there will be lots of obstacles. Yet, in the company, procurement department is assistant department. The real in-power departments are the ones which can control the finance. Therefore, there are lots of difficulties in reforming. To achieve the goal, we have to slow down the steps, go forward steadily and smooth out the obstacles. First, we can practice this method in experimental units in the company then popularize it to the whole company.This thesis has certain directional meaning for the achievement of general strategy goal of JCC through strengthen procurement management and enforce its EPC general contract power.