The client corporation has several industry groups including power stations, power distribution, heavy industry, rail transit, machinery and electronic integration, machinery, environmental protection, elevator and printing machinery. The client corporation has an integration business of engineering design, product development, equipment manufacturing, project supporting facilities and technology services while it has enjoyed a core competency based on equipment supporting facilities, project contracting and integrated services. Its products rank top in China and account for a significant share in the international market.
1. The lack of a real supplier management system
− The impression based evaluation resulting from the lack of a real continuous evaluation
− The lack of the quantitative evaluation for quality control
− The lack of the rewarding and discipline system
− The failure of implementation of the supplier classification system despite the existence of this system
− The difficulty of implementation of the strategic supplier standards
2. Poor cost control ability
− The lack of detailed cost data for materials and no historical accumulation
− The inappropriate mix of the suppliers with strong R&D abilities and cost leadership purely based on bidding
− The heavy reliance on price reduction to achieve cost optimization, leading to chain problems of supplier confidence/quality/supply assurance
3. Failure to fully capitalizing the suppliers’ capacity
− The low supplier involvement for the early stage of research and development and Insufficient learning of the feedback from the suppliers
− The small number of continuous optimization plans
4. The dispersed purchasing information and the low potential tapping of the existing system
5. The new and internal processes still under improvement
1 The purchasing organizational structure reform（strategic purchasing and operations purchasing）and the future development model projection（centralized and decentralized purchasing）
2 Purchasing process optimization
3 The establishment of supplier management system
− The integration of the supplier forces for each subsidiary（Removing the inter-company barriers）
− The reduction of the number of suppliers
− The establishment of the potential supplier development and entry system
4 The establishment of core supplier strategic alliance
1. The risk management system for the supplier pool
− The supplier evaluation system
− The supply performance management system
2. The spare part synchronized development and management system with suppliers
− Quality designs
− The implementation of cross functional groups
3. The benchmark analyses on the supplying system of the leading equipment manufacturers and the optimized applications
4. The fast profit making strategy for supply cost improvement
− The uniform supply purchasing strategy
− Full utilization of purchasing leverage
− Purchasing synergy
− Project synergy
