Research On Purchase Of Bulk Raw Materials In Strategic Purchasing Of Hebei Iron And Steel Group--in The Procurement Of Iron Ore Case

China economy development is depending on the resources more and more. Iron and steel industry is the representative of traditional industries in China, in which supplies of raw materials become very critical to the survival and development and consist of the vast majority of the total cost of production. The iron and steel industry core raw material is iron ore. In the background of China iron and steel industry development facing the complicated situation of iron ores supply it has great significance for intensive study on the purchasing of iron ore, which enables the company not only to realize the control of raw material costs with business developing scientific strategies and the comprehensive competitiveness but also to boost the development of China steel industry in long-term.On June 30, 2008 strategically construction of Hebei Iron and Steel Group composed by Tangshan Iron and Steel, Handan Iron and Steel, Chengde Iron and Steel, Xuanhua Iron and Steel, Wuyang Iron and Steel and Shijiazhuang Iron and Steel was realized. The strategically restructuring is done in accordance with the principles of unified development plan, unified asset management, unified capital operation, unified investment management, unified financial and fund management, unified human resources management and unified marketing. Afterwards the international trading corporation, Mining Corporation, Sales Corporation and Purchasing Corporation were founded which initialized the centralization of mineral resources, imports and exports, the procurement of raw materials and sales operations.The basic principles of strategic resource and supply chain is applied in this papers, which focuses on the development objectives of the Hebei Iron and Steel Group by intensive studies on the strategically positioning of the purchase of raw materials, marketing strategy formulation, management processes optimization, the whole cost control Etc. SWOT analyses were carried out for the iron ores purchasing internal and external environment of Hebei Iron and Steel Group. The papers clearly points out that the raw materials procurement by the model of strategic sourcing is instructive to Hebei Iron and Steel Group. The strategic procurements should become a key supporting part of business development strategies in which the purchasing departments are no longer as simple operating functions but also the core elements in the supply chain. The whole process of procurement cost control can achieve efficiencies and reduced costs and improve product overall competitiveness in the market .