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    Procurement Promotion Center

    I. Introduction of Procurement Promotion Center

    The year of 2015 was called the first year of the reform of state-owned enterprises, and was especially the critical moment for those in the iron and steel industry. The industry was still in the "gnawing period" of transformation and upgrading, and the enterprises are still facing severe production and operation situation. In July 2015, Xinxing Ductile Iron Pipe Co., Ltd. (hereinafter referred to as "Ductile Iron Pipe Company") innovated in setting up Procurement Promotion Center in the new normal. The Center actively participates in the bidding procurement of various industrial areas (in Wu'an, Wuhu, Huangshi, etc.) of Ductile Iron Pipe Company, and makes trace analysis on their procurement data and monthly assessment, and is among the six management centers of Ductile Iron Pipe Company in order to strengthen the horizontal control.

    Procurement Promotion Center is not only a functional sector of Ductile Iron Pipe Company, but also is managed by Xinxing Ductile Iron Pipe Group Resource Investment and Development Co., Ltd. (hereinafter referred to as "Xinxing Resource") in order to participate in the bidding and tendering business of various industrial areas of Ductile Iron Pipe Company. At present, Procurement Promotion Center has procurement manager in various industrial areas who are responsible for the competitive procurement and daily procurement promotion work of the various areas. Procurement Promotion Center is parallel to the procurement departments of various industrial areas, participates in the competitive procurement of various industrial areas as the supplier, gives full play to the catfish effect, and promotes the lowering of the procurement costs. Tap the potential by benchmarking, and narrow down the procurement gaps among various industrial areas. Analyze the procurement data and product technologies, and deeply lower the procurement costs. Integrate the supply chain, and improve the strategic procurement level of Ductile Iron Pipe Company.

    Since its inception in July, 2015, Procurement Promotion Center has enlarged its staff size from 3 persons to 12 ones now, reached the annual procurement amount from RMB 100 thousand to RMB 950 million, realized the direct profit at the amount of RMB 6 million, and helped various industrial areas lower the procurement costs of RMB 40 million. Judging from its operation effect for over one year, Procurement Promotion Center obviously lowers the procurement costs of Ductile Iron Pipe Company, and also helps the various industrial areas make their procurement processes and management models more reasonably.

    II. Case:

    Procurement Promotion Center organized the scale bidding of the domestic lubricants, changed the previous dealership mode into the direct supply mode, innovated the procurement commercial mode, collated the procurement links, and the bid winner SINOPEC lubricant Co., Ltd. was responsible for logistics and distribution, lowered the original price by 12% and the procurement costs by 1.47 million Yuan for Ductile Iron Pipe Company.

    Ductile Iron Pipe Company conducts strategic cooperation with Xiben New Line Stock Co., Ltd. and innovates the procurement modes.
    Procurement Promotion Center assisted various industrial areas in promoting the Xiben-Xinxing procurement manager APP system.
    Procurement Promotion Center promoted the lubricant scale procurement, and the customers from SINOPEC visited the plant
    Procurement Promotion Center organizes the material scale procurement.