Along with the commissioning of natural gas pipeline at Yinsha Bay and new buildings in Hukou County, Hukou Co., Ltd, a subsidiary of Oriental Gas Holdings Ltd, saw increased needs for various pipes. In response, the company’s material procurement division has developed and implemented practical procurement strategies based on competitive bidding and comparative shopping process, resulting in substantially reduced purchasing costs.
In this January, Hukou Ltd held a bidding meeting in its meeting room for Yansha Bay natural gas pipeline procurement project, under the supervision of the parent company’s leadership, resulting in substantially reduced capital investment by dramatically reducing the per-kilometer material purchasing costs and construction costs compared with the previous sub-high pressure material procurement project. This cost reduction is a result of the well-informed decisions made by the parent company’s leadership and the generous support of general manager of CNPC Runfar Co., Ltd Liu Bin and Oriental Gas’s COO Xu Meilun.
In addition to this project, Hukou Ltd undertook cost reduction negotiations for routinely-purchased materials. Purchasing agents managed to reduce the procurement costs to the maximum extent without comprising quality by extensive surveys of market price trends, interviewing with sister organizations and comparative shopping process. In this March and April, the company required existing suppliers to reduce quoted prices of gas-specific galvanized steel pipes and PE tubes based on acquired information, while the construction costs of the directional drilling team who works with the company were further reduced.
“Cost reduction” is the cornerstone of the company's business growth, as emphasized frequently by the company’s leadership. Cost if the basis of business survival, while procurement costs hold the largest share of operating costs. The company’s leadership expects purchasing agents to reduce procurement costs to the maximum extent without comprising product quality, a practice well received by all employees of the company.

By chaixiaojuan