HEI actively promotes the transformation of cost management from an “accounting-oriented” model to a “management-oriented” and “strategy-oriented” model. Focusing on the entire project lifecycle and the full management chain, the company concentrates on five core areas: the bidding front-end, the design phase, process control, resource allocation, and compliance and risk control. Through systematic thinking, breakthrough measures, and refined management, HEI continuously taps into cost-saving potential and enhances operational efficiency, achieving remarkable results in its cost reduction and efficiency improvement practices.

Deepening Design Optimization for Efficient Control of Engineering Projects

Design control determines project costs, and design optimization is the key to cost reduction and efficiency improvement. HEI insists on source control, professional collaboration, and technological leadership, establishing a collaborative mechanism that covers all specialties, processes, and elements. It systematically explores potential savings from aspects like plan demonstration, standard optimization, and material selection to drive cost reduction from the source.

At the Saudi Nairyah 2 Project, the project team optimized the site grading elevation and innovated foundation treatment plans, enhancing the plant area’s stability and structural safety. This approach cut direct costs for materials, transportation, and construction by over 5 million yuan, while shortening the construction period by more than 30 days. At the Tarahan Power Plant Project in Indonesia (Tarahan Project), the project team optimized the structural forms of buildings, strictly controlled concrete grades, and refined the reinforcement ratio. By reducing the consumption of materials such as concrete and steel bars, they achieved a comprehensive cost reduction of approximately 7 million yuan, realizing precise cost control through technical optimization.

Adhering to the Quality Baseline to Ensure a Win-Win for Quality Improvement and Cost Reduction

HEI adheres to the dialectical unity of quality and cost, and strictly observes the quality baseline. It continuously optimizes the quality management system, implements penetrating supervision and management of supplier quality responsibilities, establishes equipment supervision ledgers and supplier quality issue lists, and strictly enforces the non-conformance reporting system to effectively reduce quality risks and various quality-related losses.

Quality Improvement and Costs Reduction Root in the Process and Rely on the Details. At the Manzanillo III Combined Cycle Project in Mexico, the project team optimized the construction and welding processes to address bottlenecks in circulating water pipeline installation. This innovation cut construction costs by approximately 4 million yuan, effectively mitigating rework risks, shortening the execution period, and converting hidden costs into tangible returns.

Optimizing Smart Logistics for Precise Control in Storage and Transportation

Logistics for overseas projects is a critical link in controlling costs and ensuring project execution. HEI relies on its professional logistics team to implement multiple measures to control costs and increase efficiency. It compares multiple inland carriers, conducts on-site route surveys, optimizes loading and transportation routes, and fine-tunes freight costs; It coordinates shipping plans in advance, opting for break-bulk shipping instead of high-cost air freight and container transport; It seizes shipping windows to centralize and consolidate shipments, continuously reducing logistics expenses through coordinated and intensive logistics management.

Unlocking Innovation and Collaboration to Leverage the Group's Supply Chain

By fully leveraging the Group's industrial and supply chain advantages, the company strengthens internal collaboration and resource sharing to build a new cost reduction framework with both internal and external linkages. For the Tarahan Project, the three main engines and their supporting equipment were all sourced from within the Group, with internal procurement amounting to over 300 million yuan; The localization of key valves reduced procurement costs by more than 8 million yuan.

To integrate procurement needs across regions and projects and further tap into the potential for procurement cost reduction, HEI established a Bidding and Procurement Center. The Center effectively compresses supply chain costs by utilizing methods like centralized procurement and bundled procurement. Notably, for two projects in Saudi Arabia, the ocean freight procurement cost reduction rate for main engine equipment approached 15% through logistics supplier expansion and market-based competitive bidding.

Cost Reduction and Efficiency Improvement Are a Long-Term Endeavor. HEI will continue to adhere to the principles of strategic guidance, problem orientation, systematic promotion, and detailed implementation. It will integrate cost reduction and efficiency improvement throughout the entire project lifecycle, the full management chain, and all work processes. It will continuously improve its lean management system, consolidate the achievements of cost reduction and efficiency improvement, strive to create a new situation for the company's high-quality development, and contribute more to the Group's goal of building a world-class equipment manufacturing enterprise.