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Welcome to Zhangqiu Heavy Forging Co.,Ltd!

?EMERGENCY MANAGEMENT ?

Emergency and Risk Management Mechanism of Zhangqiu Heavy Forging Co., Ltd

I. Emergency Management Mechanism:
1. Name:
Emergency Risk Management Office of Heavy Forging Company
2、Group members:Director of Emergency Risk Management Office: Cui Jiangling
         Executive Deputy Director of Emergency Management: Wang shutai
Team Leader of Emergency Management: Li dantong
Technology and quality Control Team Leader: Zhang Qingdong
Safety Team Leader of Emergency Management: Yu Qingguo
Energy Team Leader of Emergency Management: Zhang Shuguang
Procurement Team Leader of Emergency Management: Li Wei
Disaster Relief Team Leader of Emergency Management: Song Lijun
Foreign Trade Coordination Team Leader: Wang Shasha
3. Set two offices as the standing body of handling daily emergency affair  
  Director of Risk Early Warning Office: Wang Shasha
  Director of Emergency Response Office: Wang Shutai
4. Emergency management call: 0531-83863706
24 hours of emergency call of director Cui: 13605416495
24 hours of emergency call of Wang Shutai: 13864173778
24 hours of emergency call of Wang Shasha: 15154190967
II Guiding thought: The aim of this mechanism is to guarantee client order production, ensure task completion of the company, avoid economic benefit loss of both sides and protect company credit
III Emergency management procedures:
1. Supply chain risk early warning
(1) Order evaluation warning
(2) Supplier assessment and determination
(3) Seasonal disaster risk assessment warning
(4) Production and management risk assessment warning
(5) Energy risk warning
(6) Risk warning report, submit and release
(7) Early warning grade: green indicates normal, yellow indicates grade one, orange grade two and red grade three
(8) Early warning grade determination: in the related area, if one risk obtains portent, it is grade one; if it appears in small scale, it is grade two and if in large scale, grade three.
(9) Emergency management duty system: when it is under yellow risk early warning grade, all team leaders shall maintain 24 hours duty shift, when under orange grade, both deputy chief of emergency management office and all team leaders shall be on duty 24 hours, and when red grade, both chief and deputy chief of emergency management office as well as all team leaders shall be on duty 24 hours.
2. Supply chain risk management: emergency management agencies should develop all sorts of emergency disposal plans subject to different warning grades, which shall fully cover the related supplies and equipment, vehicles, communication tools, with intact rate; the emergency management team should perform to its monthly training and drills to its team members and related personnel according to their own emergency plan.
A. Supplier risk emergency countermeasures, the company shall set up multiple suppliers. Four suppliers are: (1) Benxi Iron and Steel Co., Ltd., (2) Jianlong Iron and Steel Co., Ltd., (3) Laiwu Iron and Steel Co., Ltd., (4) Shagang Group. Supply risk is one of the most attention-drawn risks in the supply chain. For reasons of strategic alliances or in order to get the price discount, enterprises shall purchase the main (critical) raw materials from a single supplier, and once the supplier fail to provide the raw materials purchased normally due to the affect by the internal or external adverse factors, it is bound to cause the supply chain breakage, and affect the normal operation of the downstream. In order to eliminate the risk caused by the supplier, the first is to choose the outstanding supplier with low risk probability, the second is to adopt multiple suppliers strategy, even set the backup redundancy suppliers, the purpose of which is to adjust emergent supply arrangement to purchase from other suppliers, once a supplier fails to give normal supply, and at the same time to reduce the dependence on a single supplier and prevent supply risk. Our company can force suppliers to improve service quality and reduce product price in reliance on their market dominance and appropriate use of competition among suppliers, in order to increase the income of the purchaser. But too much suppliers of the same commodity will cause of complexity of supply chain, increase the difficulty of the supply chain coordination management, and lead to the rising cost of supply chain management.
B. Coordinate with suppliers. The purpose to establish a supply chain is to adapt to the change of market and business environment, make full use of their advantages to response to market competition with the supply chain partners and share the profits and risks. The influence of the risk prevention also needs to strengthen the close cooperation with supply chain partners, establish comprehensive coordination mechanism from the organization, information connection channel, and incentives aspects, formulate risk avoidance plan and emergency plan with suppliers to expand profit space and to overcome risk factors in a concerted effort, share the risk of their respective responsibilities. It is necessary to carry out targeted tracking and monitor of the management circumstance of important suppliers, monitoring the major changes and adjustments of suppliers, the performance of task completion, the impact of external events, such as natural disasters on the supplier management environment, and even abnormal behaviors of the upstream supplier of suppliers. Increase inventory, the purpose of which is to prevent risk and ensure supply while fluctuation occurrence.
C. Increase the safety stock level, use the inventory function of buffering, adjusting and balance to guarantee supply while supply market fluctuation and even supply shortage, which, to some extent, decreases the impact of supply time risk such as the arrival of the goods time delay, and ensures the continuous and stable operation of supply chain. Inventory increase is still the major measure taken by many domestic enterprises to prevent short supply, but high inventory will increase the operating costs of the supply chain. Therefore, the essential content of supply chain management is how to reduce operating costs on the premise of supply chain service level guarantee. An effective risk prevention measure, the information age, is to reduce the physical inventory levels in the form of virtual inventory. After the confirmation of the order, we should guarantee a batch of goods inventory, and a batch pending in order to ensure the order production.
D. Increase production capacity as well as the design of production, inventory, distribution, transportation, information system, maintain a certain load margin, and increase the safety factor of the supply chain system. In case of risk events such as abnormal changes in supply and sales market, and internal system operation faults, the supply chain shall maintain certain backup resources, to ensure the reliability and stability of the supply chain. Our countermeasure is to adopt advanced and efficient rolling line rather than the backward air hammer to improve efficiency, the update of which shall be completed before the end of June.
E. Increase the flexibility and responsiveness of the supply chain, namely, the so-called supply chain flexibility refers to the elasticity of supply chain, i.e. the flexibility, which refers to the ability of supply chain to adapt to changes in market demand. Nowadays, market features have become more and more obvious of demand diversification, service personalization, fashion variation, operation globalization, and delivery just-in-time. The uncertainty of market demand greatly increases, which is the basic reason of the risk formation. Only a supply chain full of flexibility shall make timely, rapid reaction to a sharp change of market demand, and prevent the risk of supply and demand mismatch. The key of flexibility obtain of supply chain is to set up a rapid response mechanism, and strengthen the supply chain ability to response to market changes. The flexibility of the supply chain is reflected in the flexible design of supply chain system, flexible production equipment, flexible human resource, flexible information system, flexible operation management method, as well as appropriate enterprise culture atmosphere suitable for flexibility. Our countermeasures are: weekly real-time quote by the steel factory, and monthly forward quotation, which shall be forwarded to the relevant person in charge of the emergency response office at the same time for timely evaluation, and if anything abnormal pops up, emergency department shall release timely early warning as per the warning grade.
F. Improve technology and equipment. The brunt technical measure is to perfect and improve the supply chain information system, make use of the functions of information system such as risk monitoring, event management, demand forecasting and auxiliary decision-making, promote the information system integration among supply chain partners to realize information sharing, and introduce special application system of supply chain risk management. Information system shall ensure the timely acquisition and transmission of supply chain operation information, allow the clairvoyance, rapid response, and right decision-making of managers, and play an irreplaceable role in the risk early prevention, emergency handling in process, and remedial afterwards. Effective means to enhance the reliability of the supply chain contains technical level improvement of production and logistics equipment, and perfection of technical equipments of management and operation.
3. Production run risk management measures
(1) Logistic risk management
(2) Emergency risk
(3) Energy supply risk
(4) Personnel floating risk
The above four situations if: emergent events occur such as electrical power and energy supply failure, logistic failure, staff strikes, disability, and death of illness,
A. In case of logistic problem caused by the delivery company, timely manage the information related to roads, vehicles, personnel and others, and rapidly complement transport vehicles by the company with the emergency vehicles assigned to specific personnel, and currently, the No. 1, 3, 6, 9 truck together with their respective drivers are included in the emergent vehicles which is under the supervision of Li Wei, head of the procurement team.
B. In case of power and gas emergent event, Zhang Shuguang, head of energy and safety team, shall contact the power company and gas company immediately to manage the factor information related to event cause, site, extent of damage, duration time, supply recovery time and others and take relevant measures rapidly
C. Li Dantong, head of production team shall check the task completion condition as per the production plan. Execute timely and perfected management to production equipment and personnel element, and manage mental changes of personnel at any time to avoid group events, after the occurrence of which, full adjustment, coordination, complement and placation shall be performed to prevent event expansion. And if severe event happens, timely arrangement of coordinated unit shall be implemented to make up production, in order to ensure the order completion.
(5) Equipment operation risk
(6) Sales return and quality control risk: In case of the occurrence of the two emergencies mentioned above, Mr. Zhang Qingdong, head of the technical and quality control team, shall assemble equipment and related technical staff rapidly, rush to the site immediately, execute emergency management method and determine remedial measures in coordination with the head of production team,
Financial risk management; Capital chain risk, is the biggest risk of order supply chain risks, enterprise financial risk analysis
A. The basic features of enterprise financial risk: enterprise financial risk refers to the chance and potential of loss occurrence due to various uncertainties in the process of the whole financial activities of the enterprise. The enterprise financial risk runs through the whole process of production and operation, and is divided into four aspects: financing risk, investment risk, capital recovery risk and income distribution risk. The main characteristics are indicated in: firstly, objectivity. Namely, the risk is constant and everywhere, which is to say, the financial risk is independent of man's will, can't be avoided, or eliminated, and can only be responded to through various technical means in order for risk prevention. Secondly, comprehensiveness. Namely, the financial risks exist in every link of enterprise financial management work, and financial activities such as fund-raising, capital operation, capital accumulation, distribution and others will all produce the financial risk. Thirdly, uncertainty. Namely the financial risk may or may not happen under certain conditions. Fourthly, gains and losses co-existence. Namely, the risks and benefits are proportional and the higher the risk is, the greater the returns are; otherwise the returns shall be low.
B. Financial risk analysis from the balance sheet aspect risk: From the balance sheet analysis, it is mainly divided into three types: firstly, most of liquid assets are purchased by the current liabilities raised, and small part of the same by long-term liabilities raised; Fixed assets are financed by long-term funds in the hands of localities and most long-term liabilities, that is to say, all current liabilities are used to raise liquidity, funds in the hands of localities are all used to raise fixed assets, which is normal capital structural type with low financial risk; secondly, The accumulated balance in the balance sheet is the scarlet letter, that is to say, a part of owned capital is eroded by losses, and thus causes a proportion fall of owned capital in total capital fall, which indicate the financial crisis occurrence, and must be alarmed; Thirdly, all owned capital is eroded, and also occupies a part of debt, where, this kind of circumstance belongs to insolvency, and is included in the high risk, which requires compulsory measures.
C. Financial risk analysis from the enterprise earnings position is divided into three levels: one is the operating earnings achieved by operating income deducting operating cost, management cost, sales cost, sales tax, and additional fees. The second is recurring income based on the first after deducting financial expenses. The third is the summation with net non-operating income on the basis of recurring income, namely periodic. Careful analysis of the three levels of income, shall detect hidden financial risks, which includes three kinds of circumstances: firstly, if operating earnings is of profit, but recurring income is of loss, it indicates that the capital structure of the enterprise is unreasonable, the borrowing scale is large and interest burden is heavy, which all lead to a certain risk; Secondly, if operating earnings and recurring income are of profit, but periodic earning is of losses, it indicates a disaster and loss of assets sales, and alert shall be insisted if the problems is severe enough to trigger a financial crisis; thirdly, if there are losses starting from the operating earnings, it indicates the enterprise financial crisis has appeared. On the other hand, if the three levels are all of profitable returns, it shows the normal operating conditions. Second, the enterprise financial risk prevention: Under the condition of market economy, financial risk is an objective existence, and it is unpractical to eliminate the risk and its impact. So, in determining the financial risk control target, the enterprise cannot blindly pursue low or even zero risk, and should control financial risk control in a reasonable and acceptable range in accordance with the principle of cost effectiveness. Therefore, the focus of enterprise financial management work is to strengthen enterprise financial risk prevention, determine prevention measures of enterprise financial risk, dissolve the financial risk, and realize the goal of financial management.
D. Now we are going to talk about how to guard against enterprise financial risk mainly from the following points. 1. Hold risk awareness, and establish an effective risk prevention and management mechanism, the specific methods of which are: the first is to stick to the principle of caution, and establish risk fund. Namely establish specific reserves for risk loss prevention by means of withholding before the loss occurred, for example, the product manufacturing industry could count and withdraw bad debts reserves according to certain rules and standards set, and commercial circulation enterprises could withdraw price cutting reserves, in order to make up for the risk of loss. The second is to establish the supervision system for the efficient use of enterprise capital and strengthen enterprise financial risk control; 2. The following several aspects shall be done: (1) the financing risk control. Under the condition of market economy, financing activities is the starting point of enterprise production and operation activities, and enterprise management measures misconduct shall lead to great uncertainty of the use efficiency of the raised money, and thus result in financing risk. There are two channels for enterprise financing: one is owner investment, such as capital increase and share expansion, reinvestment after-tax profit distribution. The other one is to borrow money. As for borrowing money, upon receipt of financial leverage interests, the enterprise executes operation on borrowings and borrows funds, which shall bring the possibility loss of debt paying ability and the uncertainty of earnings. The specific causes of financing risk lie in the following aspects: the specific cause of fundraising risk due to interest rate fluctuations enterprise financing cost increase the risk of or raised higher than the interest level, in addition, the organization and scheduling risk and capital, management risk, foreign exchange risk. So the scale shall be strictly controlled of indebtedness.

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