OREANDA-NEWS. July 19, 2011. With e-commerce, e-tendering as support and transparency standard and efficiency as purpose, Baosteel sunshine procurement action has been implemented for two years and achieved significant results. E-procurement deal size increases every year, reported the press-centre of Baosteel.

This year, from January to May, the deal size reached 11.9 billion yuan, with increase of more than 50%; new procurement module increases rapidly. Currently, 124 Group units apply online procurement, with Baosteel Co.,Ltd. achieving 100 % full-coverage. Bidding  procurement improves steadily, centralized procurement becomes gradually standardized, online procurement efficiency rises significantly and a new technological anti-corruption model is explored, which effectively purifies the procurement environment.

"Push ahead"mechanism Since 2008, sunshine procurement promotion action is  included in company's  annual work focus and is the Group performance monitoring focus project. Group Party and administrative leaders held special meetings to clarify job requirements and deadlines. In last May, the Group corporation operation improvement department and supervision department established "push ahead" working mechanism, changing the "forward promotion" to "reverse promotion": It requires that each business unit should formulate an implementation time of all common material varieties which can be purchased on line except those of strategic procurement. For non-on line purchases they should explain the reasons. Operation improvement department keeps record of  units' online procurement model analysis report and supervision department improves sunshine procurement oversight mechanism. Business units have been developing promotion plans and implementing the division of responsibilities, according to their own characteristics.

Perfect platform Relying on the East Steel platform, the units explore successfully and use extensively on line procurement models such as checking bidding, open bidding and integrated bidding and improve document collaboration process and effectively support the vast majority of procurement within the Group. Beginning with waste material standard online bidding sales rules, they clarify on line bidding sales process and rules in pace with customer operations. For example, it is stated clearly in "waste materials on line bidding sales rules" that information should be given to customers 3 working days in advance by SMS or phone with notice published on the web. The five minutes delay in the open bidding system allows full bidding for buyers with intention and ability and the prize goes to the highest bidder. Transactions and evaluation process is not operated manually, the system automatically determines and confirms the transaction unit according to publicized  trading rules.

Effectiveness monitoring. Under the coordination of Group Corporation, discipline inspection and supervision departments in the various units  carry out performance monitoring of all aspects of sunshine procurement and sales. Last year, through the  progress of performance monitoring projects, the cumulative profit amounts to 75 million yuan. On line self- introduction , online assessment, online assessment announcement for new suppliers enhance the transparency of suppliers and ensure that Baosteel procurement system is an open platform. By the end of May this year, a total of 7000 suppliers have introduced themselves on line to Baosteel, among which 2900 are approved as qualified suppliers. Corporation discipline inspection commission and supervision department develop "Baosteel Group Co., Ltd. anti-corruption bi-lateral signing management approach" to enhance management of suppliers' business practices. Meanwhile, through three step rescue system, online monitoring, project forward, etc.,  main problems in the various aspects of the sun procurement and sales are discover and the implementation of procurement and sales are assessed.

According to statistics, the Group's waste materials on line sales volume and benefit are of significant growth, in 2010, the transaction amounted to 380 million yuan, which is 2.7 times of 2008 and with benefit increase of nearly 70 million yuan. Unusable material online bidding is in rapid growth. Premium turnover in 2010 reached nearly 124 million yuan. From 2010 to May 2011, the group tender commissioned within the Group is 1138, amounting to 18.09 billion yuan and bid amount is 15.48 billion yuan, with 14.4% saving rate. Since 2010, they have completed 55 centralized procurement tender projects. Office supplies centralized procurement has been adopted by 17 purchasing organizations within Baosteel Group.