Weichai Power Breakthrough Manufacturing Targets Top 500 in the World

As a leading enterprise in China's equipment manufacturing industry, Weichai Power always adheres to the two-wheel drive operation strategy of product operation and capital operation, continuously enhances the company’s core competitiveness, and successfully builds powertrains, complete vehicles, hydraulic control, and automobiles. The new pattern of coordinated development of the four major industrial sectors of electronics and parts has formed the most complete and most competitive industrial chain in the domestic automobile industry.

On May 21, 2013, nearly 50 investors attended the "Know Your Shareholders - Going into Listed Companies" campaign of the "Practicing Chinese Dreams and Building Multi-Level Market Upgrades" series held on the Shenzhen Stock Exchange. We entered Weichai Power, visited the company's forging plant, No. 1 plant, and science and technology exhibition hall. We also exchanged ideas with company executives to understand the company's plans and strategies, and observed how Weichai people had built a century-old company.

"According to the company's plan, in the future, in the company's market structure, the domestic business, international business and post-market business will go hand in hand, with a target structure of 1/3 each." Weichai Power Dongli DAI Lixin communicates with investors At that time, the company focused on the company's aftermarket business and overseas market development. He said that through the active integration of resources and innovative business models, the company's aftermarket business and overseas business have developed rapidly. In 2013, the company will use the year of “lean year” as an opportunity to vigorously promote the lean management of the whole process of R&D, production and sales, accelerate the adjustment of product structure, strengthen the anti-risk capabilities of the company, and develop new areas such as aftermarket and overseas markets. The business segment promotes the transition from investment business to investment and consumption.

From Lean Production to Lean Management

“The workshop was clean and tidy, and company material management and lean production management were all very well done.” After the visit, Mr. Zhang, an investor in the machinery manufacturing industry, gave a high evaluation of the company’s production site management. These have benefited from the company's lean production projects in recent years.

In May 2011, Weichai Power hired management experts, formed a professional management team, set up a lean office, adopted a top-down approach, participated in full staff, lean production, on-time production, Kanban management, automated production, etc. Advanced production methods were introduced and implemented.

"This is a massive movement." The internal data of Weichai Power describes the implementation of this project. It is reported that 19 units of Weichai participated in the implementation of lean production projects. After 20 months of implementation, at the end of 2012, Japanese experts performed on-site assessments, and the evaluation of Weichai Power had been increased from the initial 1.2 points to 2.5 points, regardless of whether it was the production order at the site, the quality of work, or the work behavior and spirit of employees. The appearance is changing quietly.

After the implementation of lean production, the most intuitive change in Weichai power is the 5S management of the work site, the visualization of corporate standards, and the standardization of work operations. Front-line employees generally report that there are fewer on-site stocks, more multi-energy work, fewer substandard products, and more lean improvements. As a result, the operational efficiency is high, and the labor intensity of front-line employees at the production site is reduced.

According to Yong Yong, the lean director of Weichai Power, through the improvement of on-site operations and the reduction of the storage of work-in-process products, the company’s use of product funds has dropped by more than 90 million yuan; nearly 3,000 employees have improved their projects every month, only 2 million. The input of yuan will have a one-billion benefit on cost reduction and efficiency increase.

In Japan, companies generally only need 3-6 months to implement this lean production method. However, in China, Weichai Power plans to use the three-year period to achieve a three-point score for the local characteristics and corporate characteristics. 3 points means that Weichai Power's on-site management level is at the forefront of the entire equipment manufacturing industry.

In order to realize the transition from lean production to lean management, the company identified 2013 as the “WOS Lean Year of Landing”, breaking through the production site to management, guiding the management office to cut into the lean production project, and establishing the company’s lean production management system. The organization structure was implemented in the year of landing to achieve the transition from the “lean manufacturing project form” to the “lean management system normal”.

Weichai Power plans to basically reach Toyota management level in five years. The lean production method is derived from Japan's Toyota production method. It was formed by Toyota Eiji after more than 30 years of exploration and experimentation. Its basic idea is JUST IN TIME, which refers to timely manufacture, elimination of failure, elimination of all waste, and zero. Defects, zero inventory to enter.

Aftermarket business emerges

“Our engine production and sales volume has been ranked first in the world for six consecutive years. The market has nearly 3 million units and has grown at a rate of more than 300,000 units per year, which has given the engine a large space for after-market operations,” said Dai Lixin.

“Although the market environment was very sluggish in 2012, our market share has steadily increased.” Wang Yun Hall, General Manager of Weichai Power Distributor Beijing Renfang Mechanical and Electrical Co., Ltd., said: “Weichai engines rarely have problems, even if If something goes wrong, we will send someone to solve it in the past and eliminate the worries of customers. It can be said that more than 3 billion of our business a year is brought about by quality services."

While doing a good job in product after-sales service, the company leveraged on its existing resource platform advantages and technological platform advantages to boost its remanufacturing business. Based on the huge amount of product social ownership, relying on perfect procurement channels and marketing networks, we provide users with remanufactured products that meet new machine quality standards and service levels. In 2012, a total of 8,705 remanufactured engines were sold in the year, an increase of 97.93% year-on-year.

In the spare parts business, the company further segmented the market and improved sales channels. In 2012, 18 newly-built spare parts centers were established, bringing the total number to 60; Weichai spare parts stores and flagship stores were introduced, and it is estimated that more than 600 stores will be opened nationwide; the aftermarket marketing mode will be established, and a multi-distribution spare parts management system will be established. .

In overseas markets, Weichai's post-market business has also been expanded. KION provides customers with diversified services, including after-sales services, forklift rental, and second-hand forklift transactions. More than 40% of its annual sales revenue comes from services. Linde Hydraulics has established a global sales and service network that covers a wide range of customers. , And in the three areas of services, systems and finance have a layout, can tailor solutions for customers, and customers established a long-term relationship based on the full value chain range.

The concept of post-market was originally proposed by the American Automobile Company. The original intention was that the US$1 car was sold, and it would generate a related service market of about US$8, including automobile parts supply, car modification, maintenance, beauty and automotive electronics. With the improvement and development of the market, the concept of post-market has extended to many industries and fields.

The concept of engine after-market is first proposed by Weichai in 2012. It refers to the various services in the process of engine use after the sale of the engine. It covers all services required by consumers after they purchase the product, such as regular maintenance. , replacement of spare parts, addition of oil, fuel, maintenance services, remanufacturing, and financial services support.

Weichai Power introduced that there is a huge space for the engine's aftermarket business. At present, the engine service is mainly based on the warranty period, and is basically paid by the manufacturer. The “post-gold profit segment” outside the warranty period basically flows to the social maintenance resources. The service provided by the manufacturer is still less than 20 after the warranty period. %.

“If you only focus on manufacturing, you will sooner or later become a 'wage earner' of the world's brands.” Weichai Power's relevant person in charge said that in the face of the homogenization of domestic manufacturing products, the declining profit margins and the increasingly competitive external environment Intensifying the situation, Weichai fully realized that we must take the initiative to create the competitiveness of the marketing model to enhance the customer's product experience, with brand appeal and channel strength to maintain a differentiated competitive advantage. The integration and rapid development of the market service business platform will be the best choice for achieving this goal.

In the industry, the market business after Weichai started is not too late. As early as in 2002, Weichai put forward the concept of “service industrialization” and created a service brand marked by “service Shinkansen” and guided the industry to realize the transformation from “selling products” to “selling services”.

In 2005, Weichai Power (Weifang) spare parts resources Co., Ltd., Weichai Power (Weifang) Oil Products Co., Ltd. and Weichai Power (Weifang) Intensive Distribution Co., Ltd. were registered and established one after another. Aftermarket business was further subdivided.

At present, Weichai Power's existing aftermarket business segments already cover spare parts, special oils, services, remanufacturing, logistics, etc., and established nearly 5,000 repair service stations, and proposed innovative 5P service projects: exclusive services. , exclusive accessories, special oil, exclusive equipment, professional remanufacturing. Using powerful service capabilities to solve "one-stop" and "package" requirements for customers, provide customers with more value-added services and differentiated services.

Further expand overseas markets

“Our goal of internationalization is to become a global leading equipment manufacturing group with internationalization of production, internationalization of talent, and internationalization of research and development.” Weichai Power’s responsible person introduced that in recent years, while vigorously exploring overseas markets, Merger and reorganization, the company's tentacles have extended to all parts of the world.

In January 2009, Weichai Power acquired the French company Baudouin, which began the internationalization of Weichai Power. Relying on the platform of Baudouin, Weichai Europe’s WP6 and WP12 engines quickly opened the door to Europe and entered the European market for the first time. In March 2010, Weichai-Boduuan (Singapore), a company incorporated by Weichai Power, was formally established in Singapore. This is Weichai Power's first subsidiary in Southeast Asia, marking the move to establish global power for Weichai Power. The brand's internationalization goal has taken another important step. In March 2012, Weichai Power established a European R&D center, and its headquarters and European subsidiaries achieved common development and resource sharing.

On September 3, 2012, Weichai Power signed a strategic cooperation agreement with the world's leading industrial forklift manufacturer and global leader of hydraulic technology, the German KION Group, and completed the settlement on December 27, 2012. At this point, Weichai Power has successfully taken an important step in its strategic globalization. Through this transaction, Weichai Power has entered the world's leading forklift and high-end hydraulics field, which will help break the monopoly of long-term global hydraulic manufacturing by large foreign companies, and change the long-term reliance on imports of high-end hydraulic products in China.

The next few years will be the key period for Weifang's internationalization and development. The company will accelerate the development of overseas business, and gradually create an international enterprise group that is driven by the whole machine and has the core technology of the powertrain, and develops into a unique feature. The important pole of the global equipment manufacturing industry lays a solid foundation for the company to successfully enter the top 500 in the future.

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