Research On Sales Contract Risks Management Of BFG China

With the rapid development of high-speed rail in China for the last decade as well as China’s urbanization progress, rail transport is spreading on a nationwide scale. The rail industry chain can help foster the development of many industries.One of the beneficiaries of this is railway vehicle manufacturing industry. As a railway vehicle components manufacturer, BFG China was founded in Changchun under this circumstance. BFG China, as a manufacturing enterprise who combined the functions of design, production and sales, has been aimed at providing complete solutions to its customers since it was founded in 2006. After nearly 10 years’ development, with its advanced research and development technology and excellent production and quality control as well as its high-quality aftersales service, it has gained trust from its customers and the quantity of orders it gets keeps rising. For the last few years, China has also advocated its high-speed rail expands to the other parts of the world, and BFG China has also been developing its foreign customers and has got some orders from abroad. However, with the combination of CNR and CSR,the main OEMs of this industry broke the geographical restrictions on procurement and at the same time, with the development of this industry, more and more new competitors came for a piece of the cake. In this case, it became very important for BFG China to improve its management, cut the costs and avoid the risks within the running of the company. For a long time, due to the lack of risk awareness in staff and risk management system in the company, there has been sales contract risks within the company, which results in the delay in getting the accounts receivable back and occurrence of bad debts. That causes losses to the company. In this case,improving BFG China’s risk management became very urgent.This dissertation first uses PEST Analysis to analyze the external environment of BFG China’s sales contract risks, and then draws a summary of company’s sales contract management status. And it uses the theories of enterprise risk management to identify and assess the contract risks through the process of contract signing and implementation. Through the methods of brainstorming and safety checklist, it identifies the contract risks and through optimizing the company’s risk management rules and management flow, raising its staff’s risk awareness, it tries to solve the problems with the company’s risk management. It is a good attempt to create a risk management culture within the company, improve BFG China’s management level and a good way to reduce the company’s unnecessary loss.