Country: China

Client: China Petrochemical International (Sinopec)

Project Title: E-Procurement Feasibility Study for Sinopec International

Project Description: China Petrochemical International Co., Ltd., China’s largest petroleum and petrochemical company, is responsible for China Petroleum & Chemical Corporation’s import and export activities. With $12.2 billion in trade volume, reflecting a ratio of $11 billion of imports to $1.2 billion in exports, the firm ranked first among 500 importers and exporters in China in 2000 when Global Resources was selected to assist this prestigious global organization.

Generally known as the Sinopec Group, China Petrochemical International requested assistance for a proposed e-trade/business-to-business platform project. The trading component of the giant petrochemical organization wanted to improve their overall quality, and accelerate the speed and efficiency of their extensive global procurements through electronic means. Sinopec had begun e-commerce operations in 2000, and Global Resources was asked to assist them as they considered how their larger global e-vision could be implemented.

Global Resources first conducted an extensive industry analysis, evaluating databases and e-commerce platforms used in the petrochemical industry throughout the world, and strategic sourcing and supply chain/operations issues facing global petrochemical firms. In China, we worked with senior management to analyze Sinopec International’s current technical and organizational capabilities to build, implement, support, and sustain an e-commerce platform for the import and export of petroleum and chemical products. To transition Sinopec from a paper-based to an e-commerce organization, we suggested a three-phase approach:

1. Develop an internal intranet for procurement from established suppliers
2. Develop an international Internet procurement system, which would include new vendors, partners, and trading relationships
3. In the longer-term, build on these e-systems to establish Sinopec International’s Global trading network, which would become a new business asset for Sinopec International and China. The resulting organization could become a web-based trading agent with sourcing and sales capabilities extending beyond the petrochemical industry.

Our work with Sinopec resulted in more diversified and cost-effective sourcing, increased productivities and organizational efficiencies at Sinopec, and expedited purchasing from and payments to suppliers around the globe. In addition to improved transparency and accountability for all parties using the e-system, as a byproduct, the Sinopec E-Procurement project created sales opportunities for software and ICT suppliers in the expanding Chinese marketplace.