Sinopec International, 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, the firm ranked first among 500 importers and exporters in China when Global Resources was competitively selected to assist this prestigious global organization with its e-procurement transformation planning.
Sinopec needed help with a proposed e-trade / business-to-business platform project. The petrochemical’s trading organization needed to improve their overall quality, while accelerating their global procurement speed and efficiency. Sinopec had begun e-commerce operations in 2000, but now faced a range of strategic and technological hurdles, relative to implementing their original (and complex) e-vision.
We conducted an extensive industry analysis, evaluating databases and e-commerce platforms that were currently in use by worldwide petrochemical firms, along with Sinopec’s current and anticipated competitors; we mapped the data and insights into strategic sourcing and supply chain and operations issues that were facing global petrochemical firms. Once we were on-site, we worked with senior management to analyze Sinopec International’s technical and organizational capabilities to build, implement, support, and sustain an e-commerce platform for petroleum and chemical products imports and exports, and our gap analysis led to critical organizational transformation observations – and recommendations.
In order to effectively transition Sinopec from a paper-based to an e-commerce organization, we suggested a revised three-phase approach, thereby ensuring that internal and external systems, staff recruitment and training, and market outreach could sequence in a top quality, secure, and consistent manner:
- Develop an internal intranet for procurement from established suppliers
- Develop an international Internet procurement system, which would include new vendors, partners, and trading relationships
- 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 strategy and business planning work with Sinopec resulted in more diversified and cost-effective sourcing, increased productivities and organizational efficiencies at Sinopec, and expedited purchasing and financial flows with worldwide suppliers. 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.