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HST Sign Collaborative Purchasing Contract with SKF
Nov.15, Hengyang Steel Tube (Group) Co.,Ltd(HST) signed a contract with SKF. According to the contract, SKF is obliged to provide HST with TFO(Trouble-Free Operation) services, including bearing solutions, inventory management, technical support and training courses.
This is the first collaborative purchasing contract HST signed since they had optimized their purchasing mode and energetically encouraged collaborative purchase. Facing the rapid development of global steel industry over the past several years and to be more competitive, HST has not only carried out restructuring and industrial upgrade, but also taken active measures to cut cost in the process of production and management.
By building this long-term strategic partnership with SKF, HST aims to cut Total Cost of Ownership(TCO) of both parties and establish a set of value-added services, formulating corresponding service process. Thus, they can accomplish their operating target.
As stipulated in the contract, HST will be free from purchasing RMB10 million yuan's worth of bearings and bearing accessories annually; HST's inventory will be managed by SKF. Besides, SKF, the supplier in the contract, is obliged to provide technical support, training and on-spot instruction etc.
According to HST, after implementing the contract, they are expected to have additional cash flow of USD780,000 which was in the form of overstocks previously; purchasing price for imported bearings will also decline by 7-14%.
There is no doubt that cooperation with SKF is a good beginning for HST's strategy of collaborative purchase. HST is actively integrating the process of collaborative purchase into their ERP system. They are preparing for developing a new purchasing system including suppliers list, managing process, standards for qualifying suppliers, purchasing process, standards for evaluating suppliers etc.
To Know more about HST, please go to their website at the following link:
HST's website
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| AH3936 bearing | 180 | ||
| AH3334-H bearing | 170 |