The network centralized purchasing platform, an online undertaking established by China Railway No.4 Engineering Group Co., Ltd. (CREC4), is working excellently, with over 110,000 kinds of construction materials from 685 suppliers displayed on it, allowing buyers to purchase easily.
The platform, opened on June 30 this year by CREC4 Materials Industry & Trade Co Ltd, aims to promote the integration of the industrial chain, supply chain, and value chain by working as a materials trading service provider.
The platform’s products are arranged in 18 major categories, with 90 percent of the suppliers being manufacturers and only 10 percent working as intermediaries. So far, more than 7,150 purchase orders, with a transaction value of 148 million yuan ($20 million), have realized transaction, covering 17 subsidiaries of CREC4, and allowing 99.59 percent of CREC4’s procurement projects being realized online.
According to Huang Qijun, director of E-commerce Service Department at CREC4 Materials Industry & Trade Co Ltd, previously, by purchasing through third-party platforms such as Alibaba, they found it difficult to control the quality of the products due to inability to get to know the suppliers’ information in full. Now with CREC4’s own platform, the supply chain is more stable while the product quality is more reliable, reducing the procurement costs by about 15 percent.
“As it is well known, the various types of materials account for more than 67 percent of the cost in construction projects, and having a high-quality and efficient supply chain is undoubtedly the lifeline in controlling the cost,” said Huang.
Each year, CREC4 purchases some over 40 billion yuan of construction materials, he said, noting that besides stable supply channels for key materials like steel, cement, commercial concrete, sand and gravel, other materials and auxiliary materials still take up some 30 percent of the market share, posing a significant room for cost reduction.
The past practices of offline procurement, traditional follow-up supply, and public-inquiry quality control can no longer meet the need of CREC4’s high-quality development, he said, adding it is high time for CREC4 to establish a self-built supply chain management platform in a bid to boost digital supply chain management.