Ping Steel Distribution System Analysis

Pingxiang Iron and Steel Co., Ltd.,the first iron and steel enterprise of Jiangxi Province (hereafter referred to as Pingxiang Steel), is established in 1954. In planned economy period, the company had more losses than profits. In 1996, the output of steel was 350,000 tons; the income from sales was 640,000,000 Yuan; the annual loss was 103,000,000 Yuan; the total losses were 306,000,000 Yuan and the asset-liability ratio was 118%. The company was on the verge of bankrupt. In April of 1997, the new leading group headed by Mr. Tu Jianmin came to power. With the drastic reform, the company got onto the right track of sound development progressively. In 1999, the company realized making a profit instead of suffering a loss. In 2004, the output of steel was 2,420,000 tons; the income from sales was 7,000,000,000 Yuan; the profit before tax was 704,000,000 Yuan (Among them, the profit was 235,000,000 Yuan and the tax was 469,000,000 Yuan.). By withdrawing all state-run assets, the company changed its system into a joint-stock company, whose interest was controlled by Shenzhen Feishang Company. 98.13% of the staff became the shareholders of the company. After the new leading group of Pingxiang Steel assumed the management posts, the work of "three changes and one enhancement" was carried through. Especially the reform of the distribution system carried out in the iron and steel enterprise was the first in the whole province and even in the country. In the past few years, with the sound development and the successful system reform, Pingxiang Steel formed a system to distribute by key elements such as labor, technology, management, and capital. For the workers, the annual income per capita keeps increasing at the speed of two -figure number every year. The income rose from 6,345 Yuan in 1996 to 23,191 Yuan in 2004, and the company became the highest-income colony in the city where it is located (In 2004, the enterprise's annual income per capita was 6744 Yuan). The distribution system has played a great role to the company's fast development and the improvement of competing power. However, there is a progressive course in the perfection of the distribution system. At present, the drawbacks of the system have made a negative influence on the company's competing power. In this article, the author analyzes the treats of the distribution system and offers solutions to the problems.