Research On Purchasing Management Of EPC Projects Of Jilin Chemical Engineering Co. Ltd

As the mode of EPC general contract is more and more widely used in engineeringconstruction projects, contractors shall bear a relatively large number of projectresponsibilities in this mode, and thus management efficiency shall be improved fromall aspects to guarantee the realization of project objectives and tasks. However, as animportant component in management coordination, cost control, quality control andschedule control, it plays a crucial role of connecting the preceding and the following.As a construction&building enterprise of China National Petroleum Corporation,Jilin Chemical Engineering Co. Ltd is gradually shifting to a construction mode orientedby EPC general contract in recent years; however, due to the influence of traditionalsystem and concept, there still are some problems in project management in EPCgeneral contract, and in this paper analysis and discussion is carried out on projectprocurement management of EPC general contract of this company.First of all, a brief introduction to Jilin Chemical Engineering Co. Ltd, EPC generalcontract mode, value engineering theory, theory of supplier management in a supplychain and JIT procurement theory is made; then, four issues of costs, relations ofprocurement with various departments, procurement process and relations ofprocurement with suppliers, which exist in EPC projects of the company as a generalcontractor, are pointed out, and the reasons for these problems are analyzed; in the end,in combination with actual work, some suggestions on how to improve procurementmanagement in EPC turnkey job of Jilin Chemical Engineering Co. Ltd are put forwardaccording to the theories mentioned above:1). To take full advantage of the platform ofMaterial Purchasing Management Information System of CNPC to reinforce centralizedpurchasing;2). To involve “value engineering” in project procurement;3). Tostandardize the process of procurement;4). To build a high-performance team andestablish an effective incentive&restraint mechanism;5). To handle supplierrelationships using supplier management theory in a supply chain;6). To use JITprocurement theory in EPC project procurement management.As present, equipment and materials procurement costs have accounted for more than half of the total project cost in an EPC general contract mode. Therefore, it hasbecome the goal of research of a number of companies how to improve procurementmanagement. By studying the procurement management of EPC general contractproject of Jilin Chemical Engineering Co. Ltd, some new ideas for procurementmanagement have been explored in this paper and they’re of some practical significanceto improving the procurement management of EPC project. Moreover, I also hope tocombine the theoretical knowledge I’ve leant with actual work while writing this articleso as to get a better understanding of EPC procurement management and build a solidfoundation for future work.