CNPC Daqing Oilfield expand the autonomy of the pilot reform to increase the vitality of efficiency

Oilfield business momentum has changed from the former "stiff, stranded and loss" to the vibrant, cadres; the employees have changed from the past "wait, depend and ask" to full of energy. Recently, the change of several ordinate logistics companies of Daqing Oilfield gained people’s attention. Those companies have a common name-operating autonomy expanded pilot units

After Daqing Oilfield promoted the reform pilot of operating autonomy expansion more than a year, the four pilot operating units have achieved the assessment of profits 46 million yuan, an increase of 140%; two hospitals have reduced subsidies 84.17 million yuan.

For the bloated Daqing oil field, the significance of this group of data is not only for the economic results, but also for the bold attempt of deepening the reform and control model. With the self-management, self-financing, self-risk taking, self-restraint and self-development, the pilot companies have promoted their marketing abilities which has played an exemplary role for the others.

"Trying" out of the ability, "camping" the benefit. How could the autonomy expand changes so much?

Decentralization changes companies form stiff to actively. The cadres can perform themselves and salaries are adaptable for their work ability.

The pilot companies were all trapped in the same dilemma, such as downturn operation, unconfident in innovation, no future on work. The cadres and employees felt the same way: “we are anxious, but do not know what to do" "when will this state be into good" ... ...

If one want to survival, one must change. The pilot of operational autonomy expand has brought an opportunity for companies to break through the dilemma.

Daqing Oilfield issued "The Work Guidance of Operational Autonomy Expansion Pilot ", to implement efficiency linking and decentralized to the pilot companies. They can independently select cadres and employees, set salary under the premise of compliance with the law, and also purchase, investment and sign contracts on their own.

The traditional media advertising business is going downward, which has brought Daqing Oilfield Culture Group a substantial loss for three consecutive years. After became the first pilot of Daqing Oilfield, Baojie company abruptly made profit: achieved operating income of 70.35 million yuan in 2016, which increased 39% over the previous year; achieved the assessment profit of 7.82 million yuan, an increase of 794 million yuan over the previous year.

Baojie company firstly shrank management team. They only left the Comprehensive Office and the Operational Office on the foundation of former department system and changed their function from "command" into “service”. the other eight departments were implemented project management system on to make them face the market directly.

During the reforming, the original cadres of the company are all cleared, and all the employees can compete for a post. Anyone who are trusted and have passed the profit goal can be the project manager. The project manager term is one year and the manager shall sign profit goal contract. If he is unable to achieve the goal he signed, he must resign. Not only cadres can compete for post, the staff also implemented post double election, and their salaries are flexible.

It is a common selection for all the pilot companies to keep in accordance with the direction of the market and reconstruct management structure.

After the expansion of the authority, Daqing Oilfield Kunlun Group Paint Co., Ltd. integrated the five departments into four, and reduced the middle-level cadres from 23 to 18. The company improve bonus coefficient for the hard and contributory positons. The bonus coefficient of front-line staff is 30% higher than the office staff and 50% higher than the logistics staff. Last year, the management costs reduced 14% over previous year, and cost reduced 1.31 million yuan.

Reform brought developments also challenges. One of the difficulties of reform is how to properly deal with people.

Before the implementation of the reform, the Baojie’s leading team used 3 day-time to discuss with staff to analyze the situation. Then they held the General Assembly for two days, to answer all the employee’s doubts. Half of the success competed project manager are born after 1980, which injected vitality for market development. However, there exists difference on the ideology level between the "old" and "new", Baojie also get timely with the senior employees for the combination and complementary.

With the reduction of the management level, fair and reasonable distribution of salary, the staff had changed their mind to spontaneous working.

With the process simplification, the staff now dare pick up the order that used dare not to pick up, and enter the market that used dare not to do so.

Daqing Oilfield Venture Group Huayi Electric Engineering Automation Co., Ltd., is also considered a minor celebrity. On the technical strength and production scale, the company is one of the most important production base of high and low voltage electrical products and automation products in northeastern region and even in the CNPC system. This company is assessed as A class supplier. The 35-kilovolt switchgear, 35-kilovolt skid substation, energy-saving protector and other new products that developed by Huayi have passed through the national high-tech enterprise certification.

But Huayi Electric also has its own "distress". In recent years, the company has been committed to go abroad. But the products usually unable to be ready on time because of the cumbersome of the original approval process and raw material supply. It makes the company lost confidence in enlarging market.

The greatest part of autonomy expands reform pilot is restoring the status of the market and unloosing the market operating department. Huayi Electric Company volunteered to join the pilot.

"After the expansion of autonomy, our cost control, response speed and delivery time has not much differences compared to other companies. So, we can concentrate on competing with them, and also do R&D freely”, Huayi Electric Company Manager Fu Jingxin said so.

The most obvious change is that the delivery time is significantly shortened, customer satisfaction is improved, the market share is increased. After the material purchase rights, contract approval authority and part of the payment of funds have been delivered to Huayi Electric Company, the procurement cycle raw material has changed from 30 days to 15 days, delivery time from 45 days to 30 days.

In 2016, Huayi Electric Company achieved the highest level of sales history by sales of 226 million yuan, 22.2% increase over the previous year; the assessment of profits achieves 19.07 million yuan, 55.5% increase over last year. At present, the external goal market projects company is nearly 200 million yuan. External market sales in 2017 is expected to more than 40 million yuan.

In Baojie, power decentralization and process optimization makes working easier. For example, the approval process a single project that needs found of 300,000 yuan changed from 7 steps to 4. The contract review process is simplified and emergent contract can be signed that day. Material procurement cycle has been reduced from 2-6 months to one month; equipment procurement cycle from 1-3 years to demand determination. Last year, the company purchase 36 sets equipment of 1.15 million yuan, with more than 480 million new profits.

Once the door of the principle is open, follows the spring breeze of reform.

Before the expand of operating autonomy pilot, the product technology of Kunlun Group Paint Co., Ltd. is at the level of 10 years before. After the pilot operation, the technical cooperation was supported and approved by Oilfield. They cooperated with the South Korea Nalu Group and developed domestic advanced one-component and two-component environmentally friendly acrylic water-based paint that has been mass produced. The technological achievements have been transformed into benefits now. The enhancement of core technology can provide solid foundation for company’s development.

Daqing Oilfield General Hospital and Longnan Hospital actively carried out foreign cooperation. They aimed at the medical projects with potential market and good economic benefits and carried out joint ventures and cooperation. The introduction of sophisticated medical technology brought not only achievement of income and efficiency, but also medical convenience for patients.

The autonomy expanding broke the shackles of institutional mechanisms. The staff now think actively and work spontaneously.

During the post competition of Baojie company, the most touching person is 50-year-old Xie Yongwen, also known as Dajie. The profit goal he set was three times larger than the previous year. Most of people do not believe that he was able to realize that. But he said: “I am not competing post by setting us high goals. I feel anxious seeing our painting plant going dead, and will not submit to it!”  

When he negotiating with the customers, he said: "Even if the profit is only 10 yuan, I will not give up!" After a year’s hard work, Dajie had a breakthrough with his team in the external market and the yearly profit was 16.52 million yuan over the target.

About reform, the most profound change is that people, the most fundamental benefits attributed to people and the most powerful power comes from people.

For the pilot companies, people are the same as before, the scope of business has not changed much, but the overall appearance have taken on an entirely new look. Less people wait for work at company, more people seek for market outside; less people waiting of the distribution, and more people jostle for opportunities.

"Company wages depends on benefits, personal income depends on contributions", Daqing Oilfield Technical Supervision Center changes the monthly production bonus coefficient according to the nature of business, efficiency of work and amount of contribution and realizes the benefit rewards according to the annual profit. The enthusiasm of staff is greatly initiated. The operating vitality and market competitiveness are further enhanced, too. Last year, the operating income and assessment of profits increased by 24.9% and 106.8%over the previous year, which is the highest level in history. The pressure test room and automated instrumentation room have achieved over one million yuan per people profit. Xi'an tender company firmly occupied the tender market in the northwest, and exceeded 50-million-yuan profit income.

Daqing Oilfield adhere to the law and rules, top designation, loss and control combination, actively and steadily combination to practice pilot reform of autonomy expand into a pursuable and replicable model. This year, the pilot reform will re-expand: the expansion of scope-each market business company should select at least one department to carry out the pilot; expansion of scale - at least one to two subsidiaries to carry out pilot on the basis of existing; expansion of power-in accordance with the implementation of the "Five Self" business transition direction, to further expand the decentralization of power to a greater extent to stimulate business vitality.

In the longer time and wider space, Daqing Oilfield will expand the operation of pilot reform.