Presentation Overview 报告简介

1. Comparative Analysis of Procurement Management for Petrochemical Corporations in China: BASF-YPC and YPC Emmanuel Akese - WPI Tony Chen - SEULawson Glidden - WPIRicky Gu - SEUTesiaShizume - WPISara Yi - SEU

2. Presentation Overview 报告简介 • Week 2 progress 第二周进程 • Week 3 progress 第三周进程 • Summary of completed goals 已完成目标概述 • Revised problem statement, goals and objectives 修改的问题陈述、目标 • Updated literature review topics 更新文献综述 • Proposed methodology 方法论 • Results from BYC visits 扬巴公司调研的结果 • Results from YPC visit 扬子石化调研的结果 • Summary of remaining project tasks 未完成工作概述 • Plan for next week 下周计划 • Questions or comments 问题或建议

3. Week 2 Progress 第二周进程

4. Week 3 Progress 第三周进程

5. Summary of Goals Finished已完成目标概述

6. Project Statement and Goals项目陈述和目标 • Project Statement • Comparative analysis of procurement management at two petrochemical companies in China: BASF-YPC and YPC. • Goals: address two aspects of procurement management in a global economy. • Soft aspect: cultural, behavioral, and mindset. • Hard aspect :processes, tools, and techniques.

7. Project Objectives 项目目标

8. Additional Literature Review Topics新增加的文献综述内容 • Bulk Purchasing/ Demand Bundling 批量采购/需求捆绑 • Cross Functional Teams 跨职能团队 • E-Procurement 电子化采购 • Framework Agreement 框架协议 • Procurement Risks 采购风险 • Strategic Sourcing 战略采购 • Supplier Management 供应商管理 • Supply Base Optimization 供应商网络优化 • Total Cost Ownership (TCO) 总成本 • Vendor Managed Inventories (VMI) 供应商管理库存

9. Proposed Methodology 方法论

10. First Visit To BASF-YPC 扬巴第一次调研 • Received Briefing on General Procurement Process • Obtained Some general information on BYC’s Purchasing practices • Discussed possibility of a second meeting

11. PVT Strategy Demand Bidders List Inquiry Technical and Commercial Bonus/malus Compare Bids Selection of awarding process Execution of delivery service Purchase Order Process Awarding Process Payment Monitoring of delivery service BASF-YPC Procurement Dept. • General procurement Process 采购流程概述 Supplier evaluation Approval of delivery service Finance Dept Procurement Requester Joint Agreement

12. BASF-YPC 2nd Visit 扬巴第二次调研 • Met Technical Procurement Manager (Mr. Zhou Jian) • Obtaineddetailed information on: • Utilization of the PVT strategy • Procurement Structure • Supplier selection procedure • Overview of supplier relationships

13. PVT Team and ResponsibilitiesPVT团队和职责 • PVT Core Team • Manageable number • Cross functional/regional • Representation of major BASF • Group Companies Engineering Procurement Community Americas Procurement Verbund Team (PVT) Asia Other Major Stakeholders Technical Community Maintenance & Repair • Team Tasks • Define PV Strategy • Define/Increase Coverage • Define Key Supplier Lists • Negotiate PV Agreements Europe • Associated PV-members • Acknowledged experts • Opinion leaders

14. 5 Step PVT Strategy PVT战略的五个步骤 • Demand Bundling/ Coordination • Aggregate products/services into large order volumes. • Increase Competition • Increase competition through modifying the supplier portfolio. • Best Practices and Innovation • Exchange know how on markets, suppliers, products services or apply innovative tools • Standardization • Harmonize goods, services, packaging. • Process Optimization • Streamline processes along the entire supply chain

15. General Purchasing Practices一般的采购实践 • Demand • Based on next fiscal year’s budget. • Purchases on monthly bases for consumer goods and those not imperative. • Bundles demand from several branches • Total Cost of Ownership (TCO) • Uses TCO to assess suppliers with best deals. • Frame Contract • Signs service agreement contracts with suppliers to get better deals

16. Why BASF-YPC Uses TCO为什么扬巴采用总成本分析 • Initial Costs • Operating Costs • Decommissioning Costs • Valuation Methods

17. Procurement Dept Structure采购部门的结构 • CFP: Director of Department • Three Primary Segments • Service Procurement • Technical Procurement • Raw Material

18. BASF-YPC Supplier Management扬巴供应商管理 • PV team Develops a clear definition of how to select a vendor • The team Recommends suppliers • Suppliers are evaluated before being added to supplier list, Using • Site surveys • Questionnaires • The company keeps a of list of key suppliers • Suppliers are Reevaluated continuously

19. BYC’s Supplier Relationship扬巴供应商关系

20. YPC 1st Visit 扬子石化第一次调研 • Met with Materials Management and Equipment Manager(Mr. Zhang Jian ) • Southeast University Alumni • Obtained overview of YPC’s Purchasing System • Received brief description of YPC’s organizational structure • Obtained overview of YPC’s supplier management and selection procedure • Learned that the company holds VMI and TCO as ideals but does not fully implement them

21. Organization Chart (YPCME)组织结构

22. YPC Purchasing System扬子的采购系统 • Direct Procurement • Headquarters contracts with suppliers and all branches of Sinopec buys from these suppliers • Instructed Procurement • YPC buys from suppliers qualified through headquarters • Procurement by the company itself • YPC purchases items based on a materials classification code system used by Sinopec

23. Supplier Management 供应商管理 • Sinopec has about 23,000 suppliers on its list • YPC utilizes an E-Commerce system for supplier selection • Supplier Selection is monitored by • An internal control process • Supplier Evaluation is done by • A yearly qualitative evaluation by Sinopec and • early comprehensive evaluation for bidding • Current supplier management system was adopted in 2007

24. Overview of Tasks to be Completed待完成工作概述

25. Plan for Next Week下周计划 • Continue Write ups for the two companies using information at hand and generate more questions • Send additional questions to companies through e-mails or visit them • Start writing Results and analysis part of Report • Prepare a weekly progress report

26. Questions or Comments 问题或建议