During the last 10 years, every year a large number of factories in China have been closed down due to the rise up in price of land/labor/energy along with the upvaluation of the RMB, has brought unprecedented pressure to the manufacturing industry.
Which approach the manufacturing industry should take ? Chinese government vigorously promote industry upgrading and transformation but it was not easy for most factories which used to work with OEM .
Problems should be solved in business transformation.
1, Talent problem
Since the reform & opening up, Chinese manufacturing industry has achieved rapid development under low cost condition, also cultivate the engineering and technical personnel, a large number of management personnel and sales personnel, but these people have become accustomed to this kind of just follow up "work mode" instead of real creativity , follow up production is made according to customer design requirements, rarely have the talented person of new innovation, and at the time of the transformation just need this kind of talents with innovation ability
2, The transformation of enterprise management mode
Many industry operators are accustomed to decades of extensive development mode which originally based on OEM system, sudden transformation is not so easy, more bigger more longer more difficult in transition.
The first is the transformation of the superiors management idea of business decision maker. They are accustomed to over the years OEM orders operating mode. They are not willing to invest money and time in equipment and technology’s improvement, they think it is troublesome to reform the new system.
Second, the employees are also accustomed to the years of management mode, if the operators are not willing to change, not even mention employees. But company’s transformation is not done just the operators themselves, but also within the company's "transformation" spirit and linked to performance appraisal and evaluation. To establish an effective method and optimize management systems.
Thirdly, high quality spirit and market-oriented reformation of the enterprise structure.
By improving the manufacturing level and quality consciousness to lay the foundation for your own brand.
Generally speaking, the level of the pearl River manufacturing industry is ranked first in China, but sorry to say that the factory with owned-brand or R&D capacity are quite rare, and the most important department in OEM factories is production department right now, we think if we want to change ,this has to change as well ,usually production department only care about finishing the order and not focus on other details,
2) Change management model, to break the existing structure of the company, change importance of the production dept into "market-oriented and product research " as the leading focus of company, that needs input time and money, the return is not immediat. Some companies are not willing to do this kind of short-term returns of investment.
I would like to share the following suggestions.
1, Through the improvement of management and production efficiency, to provide a competitive advantage of the whole factory
Based on three elements of QCD, vigorously improve both software and hardware, improve the technique efficiently, strengthen the management level of service.
Despite all kids of difficulties, we can still see the growing expansion of enterprises in a difficult time, even in developed countries still have some factory there, why? Because of their high efficiency, stable quality and good service.
China's manufacturing industry in the QCDS (quality cost delivery services) and World excellent manufacturing there is still a big gap. They need to actively improve the overall competitiveness of factory instead of negative complains of rise up in cost, rent and dollars exchange rate, With high quality of product and good service, we can guarantee the profit for both side, transformation should focus on quality, service and creativity. What make us the right partner is that we have in our team highly qualified, that can overcome problem with creativity.
2, Try ODM
Qualified enterprises can try to research and develop independently with the customer’s brand which can reduce in the rise and cost.
There is a certain risk for some companys who not sure about the recovery of investment (such as plastic mold) beginning with prototype mold, that can reduce the rise, because prototype mold has a shorten time and lower the investment.
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Company Name：Hua Wei Product Development Industrial Limited
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Zhen City, Guang Dong, China
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