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Centralized Procurement Agent Practices in Large Chinese Enterprise Groups Mr. Zhang Zhifeng Vice President State Grid Materials Co., Ltd.

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Presentation on theme: "Centralized Procurement Agent Practices in Large Chinese Enterprise Groups Mr. Zhang Zhifeng Vice President State Grid Materials Co., Ltd."— Presentation transcript:

1 Centralized Procurement Agent Practices in Large Chinese Enterprise Groups Mr. Zhang Zhifeng Vice President State Grid Materials Co., Ltd

2 tendering Contents General introduction Centralized procurement agent practices Advantages of doing centralized procurement through a tendering agent

3 30+ provincial transmission networks 300+ transmission and substation projects 30+ provincial transmission networks 300+ transmission and substation projects

4 A Professional Centralized Procurement Agent established in July 1998 the first professional tendering company in the electric power industry of China has provided agent services to dozens of international thermal, hydro, wind power and transmission projects using the World Bank, ADB and foreign government loans has accomplished thousands of electric power projects the most professional tendering agent in electric power industry of China

5 Tendering ProjectsFunding Shanghai Waigaoqiao Power Plant 2×900MW Phase I projectWorld Bank Yixing Pump Storage Power Station projectWorld Bank Zhanghewan Pump Storage Power Station projectADB Henan Yuzhou 2×300MW Power Plant projectADB Shanxi Shentou No.2 2×500MW Power Plant Phase II projectForeign goverment Shanxi Yangcheng 6×350MW Power Plant projectForeign goverment

6 Tendering ProjectsFunding Jindongnan-Nanyang-Jingmen 1000kV UHV AC pilot projectOwn fund Huainan-Shanghai 1000kV UHV AC demonstration projectOwn fund XiangjiabaShanghai ±800kV UHV DC transmission demonstration project Own fund JinpingSunan ±800kV UHV DC transmission projectOwn fund Three GorgesGuangdong ±500kV HV DC transmission project Own fund Three GorgesChangzhou ±500kV HV DC transmission project Own fund Qinghai-Tibet ±400kV DC interconnection projectOwn fund

7 Transformer Instrument transformer Lightning arrester Capacitors Reactor Arc suppression coil GIS Breaker Isolation switch Switchgear Power cable Grounded line Tower Insulator Fiber optic cable Fittings Power transmission design Substation construction Project Supervision Smart meter Electricity acquisition device Bulk office supplies computer Substation protection device Computer monitoring device DC power supply Optical communication

8 1000kV UHV 35kV~220kV HV 330kV~750kV EHV 220V~10kV Practices: Centralized Procurement Scope Enlarging

9 Practices: Centralized Procurement Amount Growing billion 80.2 billion

10 Practices: Regulated Centralized Procurement Procedure instilled with quality-emphasized and technique-advanced theories offered open, transparent, and equal platform for all bidders cultivated a fair-competing market environment within the transmission and transformation industry procured high-quality equipment for safe and stable operation of power grid significantly prevented corruption

11 Centralized Procurement Agent Practices Centralized Procurement Agent Practices Based on former experience, SGM develops a operation procedure covering all steps, and the procedure has been incorporated into the E-commerce platform. Thanks to this platform, a standardized and transparent centralized procurement operation procedure has been established to provide free, equal and unlimited access to bidding for all potential bidders.

12 ERP ECP Master Data Decision Making Business Control and Execution Planning Procurement Contract Management Execution Distribution Management Warehousing Management Quality Management Waste Material Management Supplier Management and Coordination Procurement Standards Specialist Management Master Data Management Business Data Management

13 More than experts of evaluation of bid 5 levels of experts major, totally 210 majors More than registered suppliers More than 7000 suppliers bidding Deploy 46 templates of Contract 470,000 Signed contract 150,000 records of Material Master Data 792 templates of Structured Procurement Standards 619 Designing Institutes Completing 234 batches more than 1100 procurement projects About 2,538,000 bidding files Procurement Planning Supplier Management Bidding Signed Contract E-Commerce Platform of SGCC Procurement Standards 536,000 records of Procurement Request Max records in one procurement batch From go-live on Jun/2011 to Aug/2012: Experts Database

14 Suppliers Management Model First-level Management of headquarters Suppliers Registration on the E-commerce Platform(ECP) Audit and approve Participate in all bidding at E- commerce Platform(ECP) Registration of suppliers Verification of qualification & performance Verification of qualification & performance Evaluation of performance of suppliers Treatment of bad behavior of suppliers Supplies Management System Applied to the bid evaluation business Establish a centralized supplier management system, unify external service window, and enhance the quality of service. Coordinate suppliers performance evaluation with bidding evaluation organically, to supporting the bid evaluation.

15 Strengthening material intensive management by the means of information. Coordination room, as the coordination institutions of the e-commerce platform(ECP) in application, through the coordination of scheduling, business monitoring and statistical information aggregation functions, to globally co-ordinate, monitor and reasonable coordinate the deployment of various businesses.

16 Based on the Two-Level and Three-Line operation and maintenance(O&M) system, abide by the rule ofUnified operation, Unified customer service entrance, Unified operation and maintenance work orders & problem, Hierarchical management, establish a e-commerce features unified operation and maintenance framework. Based on the Two-Level and Three-Line operation and maintenance(O&M) system, abide by the rule ofUnified operation, Unified customer service entrance, Unified operation and maintenance work orders & problem, Hierarchical management, establish a e-commerce features unified operation and maintenance framework. Headquarters Customer Service Platform Call Center Headquarters Customer Service Platform Call Center Users of E-commercial Platform(ECP) Include internal & external Users Computer hardware / network vendor support Server hardware / network / channel vendor support Software provider support Consulting service providers Support System M&O Business M&O State Grid Material Co., Ltd/Province & State company Business application s support State Grid Information Communicati on Co., Ltd. State Grid IT support service center

17 ERP system E-commerce platform (ECP) procurem ent managem ent Quality assessm ent expert manag ement Waste material progra m manage ment Storage & distribution manageme nt Main process contract managem ent procure ment standar d Performan ce appraisal Quality manage ment Main data supplier management

18 Well-organizied Bid Opening Ceremony

19 Checking bid price online after bid opening ceremony

20 Separated Evaluation Bases for Large Scale Procurement

21 Sealing Communication Tools Evaluating through E-Commerce Platform

22

23 provide a more comprehensive and accurate suggestion to the tenderee for his centralized procurement decision-making, and help the tenderee avoid making big mistakes in his management of quality, schedule and price level setting. Rich Experience Advantages of doing centralized procurement through a tendering agent

24 provide comprehensive and accurate understanding of relevant laws and regulations; know how to play with international rules and how to execute regulations of the lending institutions; good at executing all the regulations and requirements; can use modern analysis model to analyze all the bidding data. ProfessionalPersonnel Advantages of doing centralized procurement through a tendering agent

25 The system provides access to all tendering information, so the procurement is more efficient, fair and transparent. It stores and manages a large amount of electronic documents and thus improves the efficiency of the procurement activities. Advanced E-commerce Platform Advantages of doing centralized procurement through a tendering agent

26 adhere to the principles of receiving orderly, opening transparently and efficiently, evaluating rigorously and carefully ", develops a standardized centralized procedure to ensure that the procurement is open, fair and just. Standardized Procurement Procedure Advantages of doing centralized procurement through a tendering agent

27 based on the professional classification criteria developed by evaluation experts in China, SGM establishes a database of experts with five categories, involving 210 majors. The pool now has 20,000 experts from around the country, and it can basically meet the demand of various types of procurement. Comprehensive Pool of Experts Advantages of doing centralized procurement through a tendering agent

28 Conclusion As a professional procurement agent, SGM, for the past 7 years, has been a successful agent for SGCCs large scale centralized procurement. Practice has proved that the use of professional tendering agent service can make the centralized procurement of a big enterprise group fair, transparent, standardized and efficient, establish a tendering platform for standardized and fair competition, and can bring win-win result to all relevant parties.

29 Thank You


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