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Since the public listing of Hilong Group, Group Chairman Zhang Jun continually promoted management innovation to carry out professional management work. After propaganda and mobilization on professional management work approach from multiple perspectives, at multiple positions, and at multiple levels, in November 2011 Hilong Group formally introduced milestone document “Work Arrangements on Implementing Collective Management for Certain Businesses Inside the Group”, guided by the overall target of standardizing behavior, improving efficiency, and reducing cost, it clarified the target to implement professional collective management work for logistics transport and material purchase businesses inside the Group, and set up work leadership teams to clarify functions and work goals.

At the beginning of 2012, the Group adopted multiple forms to carry out extensive propaganda and discussion on the work approach for logistics transport and purchase collective management at all levels. With instructions from the Group’s Executive President Wang Tao, it clarified the guiding thought of “setting up systems and regulations, refining operation, standardizing procedures, and ensuring practical effects”, and the work method of “taking a two-pronged approach to ensure system construction and practice operation”, each leadership team adopted different work models to actively carry out two professional management work tasks based on the features of professional work and the actual conditions of the Group’s each subsidiary.

For logistics transport collective management work, in view of its relatively singular feature, the group adopted the plan of first introducing regulations before comprehensive popularization and implementation; by fully coordinating the Group’s overall interest relation and integrating cargo shipping resources of each subsidiary, focus on building well-developed logistics transport integrated development system, in order to fulfill optimized setup of cargo transport resources.

The Group drafted and distributed “Method for Logistics Collective Management (Trial)” and “Detailed Rules on Bidding for Logistics Transport (Trial)” regulations, and promulgated “Table of Hilong Group’s Transport Operator Network Members 2012”. Based on regulation requirements, it carried out collective bidding work for fixed shipping project in Shanghai area and the sea shipping project of two sets of ZJ70D drill rigs of the Oil Service Company which are suitable for collective bidding.

At the preparation stage of the bid invitation work, the general managers of each business division offered vigorous support and concern. Before the two bid invitations, the leadership team fully analyzed market trends, which produced satisfactory results, the reduction percentages in transport fee are all above 10%. During the operation process, employees of each department all have rules to go by from determination of operator, setup of each bid section of the bidding document, bid invitation negotiation, finalizing service supplier, to signing transport contract, and bid invitation work.

Collective management for material purchase needs long term development

Since the Group’s collective management for material purchase needs long term development, after careful consideration, the material purchase collective management work leadership team followed the guideline of stable transition and steady implementation, and adopted the work model of planning framework first before formulating relevant regulations based on actual operation experience. It guided employees to develop understanding of purchase collective management and standardized management through facts, in order to promote the smooth proceeding of purchase collective management work.

Since the end of last year till now, bid invitation was held for relatively mature materials such as steel sand, vanadium steel and polyethylene processing residue, brown aluminum and cutting tools, in which brown aluminum and cutting tools alone could save about 700,000 yuan in purchase fund each year through bidding purchase.

By taking into consideration the features of each company’s material purchase activity, the Group formulated the management guidelines for controlling purchase core business, and supervising material purchase procedures, and implemented purchase collective management for major materials, bulk and key materials. Meanwhile, it followed the guideline of aligning material flow and capital flow, setting up mechanism to implement uniform supervision and management for purchase funds.

The Leadership Team also drafted a number of management methods including “Method for Material Purchase Management”, “Detailed Rules on Implementation of bid and bidding for Material Purchase”, “Detailed Rules on Implementation of Supplier Management” (draft for discussion), and organized connection with each business divisions with specific target in mind, which will be fully carried out within the Group. The implementation of these regulations will continually weaken the impact of artificial factors, and increase the transparency in material purchase.

Although collective management work for logistics transport and material purchase has made certain progress, there is still a long road ahead. We still need to make further efforts to fulfill professional collective management through system buildup, integrate the Group’s resource advantages, continually lower each company’s operation cost, improve operation performance, increase efficiency through management, fulfill the target of further developing the Group by top decision-makers, and building a respectable brand company, in order to enable the enterprise to make further steady progress.