In recent years, with the principle of "attaching importance to both system construction and application with application as the focus", the Company steadily pushed ahead IT construction, standardization and application. The ERP System for Sinopec Corp. was established with remarkable efficiency. The Company made important progress in development and application of some key information systems, namely supply chain system, E-Commerce system, operation command system and refueling IC card system. The IT application among the Company's subsidiaries has been greatly improved. The IT construction and application development has spread from individual subsidiary to vertically throughout the Company in larger scale, which plays a vital role to support the Company in deepening reform, optimizing resources, reducing cost and enhancing efficiency, and improving its marketing flexibility and management level.

ERP Construction & Application

The company has conducted pilot programs in branches and subsidiaries since 2001 to phase in ERP systems and has achieved important progress. By year end 2007, ERP systems have been successfully applied to 73 branches and subsidiaries both upstream and downstream. ERP data play a positive part in sales companies' market standardization; refining subsidiaries' cash, procurement and maintenance management; oilfield companies' financial statement consolidation, material procurement, storage management and investment supervision, etc. The application of ERP system plays a vital role in leveraging headquarters' supervision, supporting subsidiaries' reform in operational mechanism.

The Company is accelerating the development of operation command system. The overall planning and designing of the system platform has been accomplished. The operation system for chemical production provides instant and dynamic measurement of daily amount of feedstock input, products output and energy consumption, improved fine management level. The logistic operation system separated the buying data and selling data, gathered and monitored the data from oil depots, analyzed the logistic transportation fee and collected inventory data, thus the data served as a benchmark for oil product distribution. The Yong-hu-ning and Yizheng-Changling crude distribution management information system offers a dynamic monitoring of the depots, inventories and transportation, thus accurate data can be available in a timely manner.

Supply Chain Construction & Application

The Supply Chain System with PIMS model as the core system is playing a vital role in supporting crude procurement, optimizing processing scheme, reducing cost and improving efficiency. Integrated supply chain optimization model (MPIMS) was set up in headquarters and applied to make accurate quarterly production plans and execute crude spots procurement. PIMS model for refineries has been widely applied for the optimization of crude resource structure, production scheme, product mix, vessel schedule, inventory and maintenance, etc. The crude assessment data base system supplies effective data to the corporate MPIMS model, refineries' PIMS model and other supply chain models, and to the crude procurement and processing as well. The new settling system of transportation fee for second distribution of refined oil products makes the transportation cost transparent and controllable to the Company.

The upgrading & optimization of E-Commerce System

The E-Commerce System for procurement integrated with ERP system is functioning stably, which shows good functions in acquiring instant procurement price and inventory information, strengthening control and management, reducing the sourcing cost. In 2007, the online procurement value hit a record high. In the meantime, system function has been further improved, and new functions such as procurement tendering and corporate direct procurement or distribution are put online, thus the Company further strengthened its supervision towards procurement.

IT Application in Production Subsidiaries

Oilfield subsidiaries applied and promoted more IT software in E & P management, meanwhile attached more importance to sourcing data gathering and application. The construction of oilfield E & P data model standard system developed smoothly, the promotion and application of self-innovated software received fruitful achievement, and the E & P auxiliary decision-making supporting system is functioning effectively.

Refining and chemical subsidiaries have actively applied manufacturing execution system (MES) for resource allocation optimization, production schemes, advanced control, material balance, and achieved good results. The self-developed manufacturing execution system (SMES) has been successfully applied in 9 subsidiaries, which helps to achieve daily material balance, reduced energy & material consumption, and improved management capability. Thanks to the application of APC, an advanced process control system, the operation stability has been improved; a sound foundation has been laid for energy conservation and cost efficiency. Sales subsidiaries have completed the project of integrating three systems, thus, we can share the data collected from service stations with multiple systems. The electronic B/L replaced the traditional paper B/L, guaranteed transaction safety and data accuracy, optimized the product delivery flow chart and achieved the integration with automatic refueling system. IC refueling card system is functioning effectively with more customers attracted.