Choosing Logistics Operating Mode Of Petrochemical Companies Based On Value Engineering

After China has entered WTO, international petrochemical companies come into China one after another, and petrochemical companies in home are impacted greatly. It is harder for companies to make profit and get competition advantage by reducing production cost. In order to search for cost advantage and variety advantage, CEOs begin to focus on logistics. Logistics has become the third profit source and an important way for companies to build their competitive advantage. According to different possessive of logistics and companies, logistics can be divided into two modes: self-supporting logistics and outsourcing logistics. The two have their particular advantages respectively, but still unavoidable disadvantages. Although outsourcing is a trend for logistics industrialization, but because of peculiarity of petrochemical logistics have such as danger, economies of scale, high threshold of specialty, so, it is different decision for CEOs to choose whether self-support or outsource.Because simple cost management or quality management cann't meet the need of competition, value has been paid more attention to by enterprises. However, there is on only evaluating standard which mode is better. The one that can make more value and benefit is considered better. Under this circumstance, this article presents a method mixed quantitative analysis with qualitative analysis—VE method—in choosing companies' logistics mode. At the same time, other methods including agglomeration analysis, entropy method, multi-object maximum deviations and NPV analysis are also used in process. Value analysis of sub-function can not only put forward new ideas and help choosing operating mode of sub-function, but also make decision of operating mode of logistics system and improve enterprises operation.