Abstract: By comparing the management of valve suppliers and valve procurement process chains in the West and China, the shortcomings and gaps in management in China are pointed out, and the key conditions for management transformation are proposed.

Keywords: valve; Supply chain; Management; Procurement; energy

1、 Preface

Industrial valves, as important equipment for the processing of petrochemical energy industry processes, play an extremely important role in the safe operation of the system. As a user in the petrochemical industry, I am particularly concerned about the safety and timely supply of valve products. And precisely these two points are currently the two weakest issues in China"s industrial valve supply chain system. At present, there are over 2000 valve manufacturers in China with sales exceeding 5 million yuan. However, there are less than 20 enterprises with sales exceeding 100 million yuan, and Suzhou Newway Valve is the only one with sales exceeding 1 billion yuan. Overall, most end users believe that the valve market is very non-standard, and using the term "chaos" to describe it is not excessive. This article attempts to analyze the current situation of industrial valve supply chain management in China and compare the supply chain management models of industrial valves in Western industrial countries, in order to explore and demonstrate the reasons for the "chaos" of China"s industrial valve market and the future development direction of industrial valve supply chain management in China.

2、 Management of Suppliers (Manufacturers)

As an important system control equipment, valves are managed as critical equipment by almost all end users. According to the ISO9000 system, as a valve manufacturer, it is natural to accept the approval of the end user in order to become a qualified supplier. At present, the vast majority of end users in the energy industry in China have relatively complete supplier qualification management, but there are also the following urgent issues that need to be addressed.

1. The manufacturer"s qualification approval is not rigorous enough

The Western energy industry has strict approval procedures for valve manufacturers. Taking Shell Petroleum as an example, the manufacturer audit includes three main steps: quality assurance system audit, technical drawing and process document audit, and product prototype experiment certification audit. Approval has strict product scope settings, and the usual practice is to first approve the manufacturer"s relatively simple universal valves based on their product manufacturing capabilities, Gradually relax the approval scope based on the manufacturer"s performance. The manufacturer approval of Shell Petroleum requires very detailed procedural documents for each step. It takes at least 3-5 years for a valve manufacturer to officially become a qualified supplier. Compared with Western industrial countries, China"s energy industry lacks rigorous approval procedures for valve supply, as shown below.

1) Lack of a complete procedural document system for manufacturer evaluation. The vast majority of users only focus on conducting simple quality assurance system audits of manufacturers based on the ISO9000 system. However, there is a lack of experimental certification of higher requirements for technology, processes, and product prototypes for dry manufacturers.

2) The scope of approval is not clearly defined, and once approved, the manufacturer has almost all the product supply rights. These small enterprises with a narrow product range have obtained almost the same supply rights as large comprehensive enterprises, thereby disrupting the market and causing irregular competition.

2. Failure to effectively and reasonably utilize supplier resources

In the Western energy industry, supplier resources are usually uniformly managed by the corresponding functional departments of the group headquarters, manifested in: unified supplier qualification review, unified annual demand procurement business negotiations, with the aim of effectively integrating supplier resources and maximizing profits through centralized procurement.

Taking Shell Oil as an example, it has two business centers in the UK and the US, respectively responsible for supplier business negotiations in North America and non North America. The usual practice is for the business center to integrate the annual demand of each branch factory of the group, and then conduct business negotiations with manufacturers and inventory providers to determine the most favorable price and sign a "global price agreement". Each factory of the group uniformly purchases daily needs according to the price agreement. The advantages of doing so are very obvious, as shown below.

1) The group headquarters has integrated the scattered demands of various factories and obtained a considerable economic batch, giving it an advantage in price negotiations with suppliers.

2) Suppliers can understand the approximate annual needs of users, prepare production (manufacturers) and inventory (inventors) in advance, allocate manufacturing capacity resources reasonably, and ensure timely delivery.

3) The procurement management of each factory in the group has been simplified (through EDI system electronic procurement), greatly saving the procurement and operation costs of each factory. Meanwhile, due to the use of high-quality suppliers determined by the group headquarters, each factory has obtained a unified standard of high-quality valves, making the system operation safer and more reliable.

Similarly, compared to Western industrial countries, China"s energy industry has generally failed to effectively integrate the resources of suppliers, as shown below.

1) The procurement policies of each factory within the group are often fragmented, while the central management of the group headquarters is weakened. Each factory of the group lacks long-term strategic management of suppliers, often changing suppliers randomly, resulting in low loyalty to suppliers.

2) Due to limited demand from various factories in the group, the demand for certain special products cannot meet the manufacturer"s economic batch size, resulting in procurement difficulties. Conventional products, on the other hand, must have their own stock reserves in case of emergency demand, which in turn leads to a backlog of funds for the enterprise.

3) The procurement standards of each factory are not uniform, the suppliers used are messy and uneven, the brand awareness is weak, the purchased products have many quality hazards, and the actual incidence of quality accidents is also high.

From the above two differences in supplier management, it is not difficult to find that enterprises in developed countries have regarded supply chain management as a strategic management system, emphasizing the development of long-term strategic partnerships with suppliers. The stakeholder theory believes that the development of any enterprise cannot be separated from the investment and participation of various stakeholders, and enterprises should pursue the overall interests of stakeholders. Therefore, in supply chain management, it is necessary to strengthen the rigor of supplier qualification approval, screen out major high-quality suppliers, establish relatively stable strategic cooperation relationships with them, and integrate the advantages of suppliers into their own products, in order to make it easier for stakeholders to achieve a win-win situation.