Baosteel Group Corporation Assets Operational Efficiency Management Pratice And Research

This thesis begins with a review of state-owned enterprises(SOE) reform and performance appraisal evolution since the reform and development of China, and introduces the current mechanisms for management and performance evaluation of leaders in state-owned enterprises in China emphatically, analyses the develop direction advocated by the ruler of performance evaluation on the leaders of Central Enterprises.The operational performance evaluation is the core content of the appraisal on leaders of SOE. SASAC introduced both the profit and economic value added(EVA) as the basic targets of annual operational performance evaluation, and put both the maintenance and increase of the value of state-owned assets and sales growth rate as term business performance indicators. It reflects a develop idea to request SOE growing stronger and lager which SASAC as the representatives of state-owned capital, and expresses a management orientation to speed up transformation of development mode which SASAC as a component of national central ministries and commissions. The new idea and orientation shall have material influence on the enterprise decision making on investment and finances.The steel industry of China now have many disadvantages, for example, the control of investment, the deficits of policy support, the sufficient international competition, the resources monopoly and the social responsibilities. Only the economic benefit of the iron and steel enterprises at the present stage can be sourced from transforming concepts, internal potential and optimize assets allocation.To adapt the management orientation of operational performance evaluation, Baosteel Group has established a management system of assets operation efficiency to improve assets efficiency, optimize assets allocation. And it is a guarantee to achieve the strategic objectives to build Baosteel to become a world-class international corporation, which owning independent intellectual property and powerful competitiveness, being respected by social public, developing as "a strong, moderate diversity". Accordingly, Baosteel Gruop has established management system around the assets operational efficiency, and corresponding adjusted the evaluation indicators system of performance.This article investigates the return on a project and a company of a stainless steel processing and distribution center,proves that the investment is not the reason that reduces corporate assets operational efficiency. The key point of return on invested capital still is the profitability of the project itself. As the normal operation of the enterprise, the capital occupation of enterprises must exceed the demand of projects; surplus capital shall make the ROIC of enterprise lower. So,the enterprises to seek new growth points, to invest in new projects is the inevitable demand of surplus capital. The core elements of assets operational efficiency management is concerned about the efficiency of capital input and output, to shift from extensive mode relying on capital investment to intensive mode relying on improving the quality and utilization of production factors in economic growth, to achieve the sustainable development of enterprises.The ROIC of a company is decided by the profitability of investment projects, thus the key of improving assets operational efficiency must be how to make right investment decisions carefully. Despite this, companies are also available some methods to improve assets operational efficiency improved to a certain extent. This article around the capital input and output planning,fully explores the path and the method using management methods, financial instruments and accounting policies to arrangement profit and management assets, and shares the practices and cases of Baosteel.Finally, the article also simply analyses the limitations of the economic value added and return on invested capital as core indicators, introduces to combine qualitative and quantitative analysis to appraisal the competitiveness and competitive advantage of enterprises more objective, comprehensive and long-term. The theoretical ideals, modes of work and implementation of the assets operational efficiency management is still in its infancy. We hope that through keeping exploring on subsequent work and study will enrich and improve the theory and working system.The assets operational efficiency management is not a gust of wind movement, but rather based on the base, a long journey of continuous improvement.