Competitive Advantage of Chinese Manufacturing

Competitive Advantage of Chinese Manufacturing

“In the manufacturing sector which, as long as the Chinese do, others do not do it” is a vivid portrayal of today’s manufacturing industry. China’s manufacturing sector from the initial simple imitation, to continue to practice and innovation, to create a summary sublimation with Chinese characteristics, the most competitive and lowest cost manufacturing management model, management processes, technology, China Manufacturing took only 20 years it took nearly 200 years of Western history counterparts.

After 20 years of reform and opening up, China has become a manufacturing powerhouse. Starting from the earliest costume hats, today more and more Chinese enterprises to continuously delivery of products around the world. Anywhere in the world, any corner, large motorcycle, household appliances, small lighters, umbrellas, “China” everywhere, “China price” to discourage competition. Anywhere in the world, can be seen in China, and Chinese people’s biggest advantage is price, the price of China’s competitors all have to retreat. In the manufacturing sector which, as long as the Chinese do, others do not do it” is a vivid portrayal of today’s manufacturing industry. China’s manufacturing sector from the initial simple imitation, to continue to practice and innovation, to create a summary sublimation with Chinese characteristics, the most competitive and lowest cost manufacturing management model, management processes, technology, China Manufacturing took only 20 years it took nearly 200 years of Western history counterparts.

The success of China’s manufacturing industry is not the case, including clothing, toys, home appliances, electronics, motorcycle and other manufacturers have made outstanding achievements in the field. And inside China in the manufacturing sector, many of the manufacturing sector has become the world’s largest supplier. The success of China’s manufacturing sector entity? First, low-cost advantage of Chinese enterprises Chinese enterprises in the manufacturing industry to benefit from the rapid rise of China’s long historical and cultural background.

Hard, hard-working brought out in the new period of national spirit unprecedented energy. Especially after China’s policy of reform and opening up to change, China’s such a national culture, national spirit, hard-working spirit of promoting the economic development of China as a whole. There is the Chinese people to do great things to do whether there are people willing to do little things spiritual, we can look at many factories in China are doing a very small part, though not high profits. Some factories only do a washer machine (is actually a hole in the iron), and not high profits.

But such products, Chinese companies can do hundreds of millions of pieces of each size. This is the United States, Europe and even the Japanese businesses are unimaginable, but also they can not emulate and surpass, which is the Chinese people an advantage. In addition, China has a huge rural labor structure, and now there are 10 million every year in China’s rural labor to move to the cities. I investigated the reform and opening up from 1980 to 2000, 20 years, in Shenzhen, an ordinary little change in the wage labor force.

After 2002, the Chinese government’s policy on rural change, issued a series of favorable policies to farmers and subsidies to many, so as to let some farmers feel that low wages worth working out. Therefore, until after 2002, wages rise only gradually. After the fact, after this increase, if there are no more rural policy, there is no way to enable more farmers to stay in rural areas, then 10 million per year, and even more labor will be one in a long time to maintain China the level of general low-cost labor.

I predict that if this increase in two years after the general stability of the labor wage, should have ten or twenty years will not be much change in this environment, Chinese enterprises have created a low-cost competitive advantage. 20 years later a new generation of hundreds of millions of farmers out there, one after, so competitive advantage of low-cost labor will continue. Second, the “do not follow the common sense out the card” quick response to market I think successful companies in China, the most important one is not reasonably the cards on the market quickly reflected.

China’s successful manufacturing companies have their own set of manufacturing from product development to marketing to the unique management model, which is to look at the many foreign companies do not understand, do not understand. Some car companies in China “do not follow the common sense out the card,” adapted from the research and development of automobile products to the market need for the line regulation of 36 months, this figure reduced to just 12 months, quickly seized the international competitive advantage.

Some Chinese enterprises do not do the battery out of cards by common sense, from the process, organizational models, technology processes are fully with any country in the world, no one to do the battery plant is not the same, he can cost battery must be very low, forcing some foreign competitors feel the pressure of competition, out of the market. Market in China today is not ????? , but soon fish fish slow. A major U. S. auto company president told me: In China, elephants are not terrible, terrible thing is that fast, flexible and smart monkeys antelopes. I responded that if you put the U. S. ode of production, process, plant design to the move to China you do not move over, you do not have competitive advantage. In the automotive industry which is very simple, the labor force proportion of low wages, labor costs account for less than 1% of the manufacturing costs, so if we can manufacture according to his model, the manufacturing process, plant design to do so, we do not an advantage. Third, Chinese enterprises to achieve the extreme division of labor, the largest full advantage of the resources Chinese enterprises have already done the ultimate division of the industry, give full play to the greatest advantage of resources.

In China’s eastern and southern China there have been a lot of industrial clusters, and the division of labor between these industrial clusters are very detailed. My study has been done an umbrella factory Zhejiang, do a little umbrellas to complete more than 20 enterprise collaboration, the umbrella on each part is accomplished by a factory, put the cost of such a cooperation is achieved too low. While doing a motorcycle to more than 100 factories in Zhejiang, to collaborate, to complete, which put the cost may be very low. This form unique to China’s industrial division of labor – specialization, with strictly.

We believe that relying on such industry patterns and division of labor, Chinese companies advantages in the manufacturing industry will become increasingly evident. Even Chinese companies are now not dominated industries such as automobiles, one day as household appliances, motorcycles, in competition with foreign rivals in the process, we will take a great competitive advantage, it is only a question of time. ? Another ten or twenty years, China’s car will be the same as China’s household electrical appliances, and low cost will do.

We can clearly see that China’s garment manufacturing industry has reduced the world market price by 80%, China’s home appliance industry has reduced the world market prices by 70%, China’s motorcycle industry has reduced the world market prices by 60% Most of China’s auto parts industry has been able to developed countries in Europe and the United States to 50% the cost of auto parts manufacture the same product, China’s automobile industry will turn the world auto market prices reduced by 30%.

Two days ago I told a veterans LIFAN Lifan cars in the discussion of development issues, Yin Mingshan put forward a slogan, “get the car to do 20 dollars a pound,” I think the slogan will be realized soon Yin Mingshan . Fourth, “simplify the process, its advantages” China’s biggest advantage is to simplify processes, play to its advantages. On behalf of the Chinese companies and a German auto parts company negotiations. During the negotiations, German industry to understand the two enterprises are quite different ideas.

Six from the last century, 70’s, the development of information technology, automation respected German companies, workers declining, and even designed a “no chemical” several thousand square meters, the factory no one. Chinese companies do the opposite, do the same scale, the same level of products, investment costs and manufacturing costs are only 40% of German companies. Two years later, we go to visit the German company, the company has begun the process of learning Chinese enterprises and production organization model, according to “simplify the process, its advantages,” the idea has designed a new factory, and doing very well.

Some excellent Chinese auto manufacturers are relying on the unique advantages of Chinese-made impact of old Europe, America, Japan and manufacturing giant. I think this is a unique Chinese thinking, to create a low-cost model. So the “simplified procedure, its advantages” is our kind of thinking. Fifth, the division of fine and low transaction cost advantage From an economic point of view, the finer division of labor and social progress note sooner, the cost will be lower; but the process of division of labor will lead to some transaction costs.

China’s manufacturing division is the world’s smallest, but the transaction costs between enterprises has always been low, it is the characteristics of China’s manufacturing industry is even more dominant. China’s Pearl River Delta, Yangtze River Delta region is already quite a number of industrial clusters, industrial clusters are very detailed division of labor between. Dongguan represented by the electronics industry cluster, represented by Ningbo auto parts industry cluster, the result has very low transaction costs of collaboration, allowing a greater cost advantage.

Sixth, the “virtual enterprise”, “from the last start” mode of operation and other industries have begun to show China now has many companies doing virtual enterprise, which is an industry mode of operation, and in many enterprises began to appear. To the engine, for example, an average of 300 engine parts. 10 years ago, a factory to do the engine to do the 10 core components, 5 years ago only to be done five parts, engine plant will now make three parts as long as or even less.

In another 5 years of an engine parts factory can not do one, because in the Chinese market can be found cheaper, can be integrated resources. Leading enterprises in the future as long as some of the manufacturing sector has a brand and design, and supply chain integration capabilities, through the “virtual enterprise” model, it is fully capable of operating as a successful enterprise. Virtual Enterprise is the enterprise can be the highest state. Confusion and problems in the development of

No doubt we will face some of the confusion and problems of development, when the division of labor is getting smaller, the enterprises themselves do fewer things, supply chain systems longer and longer, it may be some problems: first, finer specialization, more enterprises to participate in co-operation led to the extension of industrial chain products and management complexity; Second, credibility is not high lead to difficulties in management supervision and management costs; Third, increase the technological content and product development lead Many enterprises also need to participate in synchronous development; Fourth, the popularity of industrial computer system resource requirements of their integration with existing management systems to share information resources; fifth, 99% and even 100% of the products made by others, after the division of refinement How to control quality, these will be the next big challenge facing the enterprise management. Based on these above confusion and problems for China’s manufacturing enterprises, particularly need help on network technology, computer technology and software vendors to support and help for Chinese manufacturing enterprises with Chinese characteristics to create a supply chain management platform, product technology and industry collaboration platform integrated computer information management platform to enhance the competitiveness of the entire Chinese manufacturing industry has become a top priority.

I believe, unique in China if the management thought, management theory, the mode of operation with management software, will help Chinese manufacturers evergreen, from good to excellent overall span. Information Management ideas We now discuss UF two years ago, and today concluded a “1 +1 +3 +2” line of thinking. The first “1” is the management planning and process optimization. We need to understand the success of any business must have and others do not like places where there are differences. As someone once said, “Successful companies are not the same, failed business are the same. ” Successful business with someone else’s point of difference is that the competitiveness of the host.

Therefore, in the implementation of a management software application, management planning and process optimization is the most important, you have to differentiate themselves from the enterprise is not the same with other people what the most competitive of what, when that point when the software is running things are still. In 1995, I began to apply through a supplier of management software, but in the first month I’ll run it halted. Because it is my business in the best and most competitive point of difference that out no more. Management planning and process optimization is the most important, you want to keep what little business is very important competitive thing. It is also, UF’s chairman Wang Wenjing put forward, that is, UFIDA is the seventh of the standard, three custom, that custom is the third of enterprises should be keeping good stuff.

In addition to what the enterprise edge to stay, but also to some of the new business management concept, new management ideas, new processes into the software, go, let the software to transform our existing processes and the existing management, enhance the competitiveness of enterprises. The second “1” is the ERP, using a basic platform, with personalized custom, to do our traditional management of resources. “3” refers to the PDM (including CAPP), MES, SCM. Where, PDM is actually a collaborative development platform, we are now fewer and fewer parts, I am developing a new product at a time when all the suppliers need to sync with my development, regardless of physical distance separated by distance, to be regarded as work in an office inside the synchronization, in this case, we need the help of a technology platform for collaborative development to do with it.

MES is a computer shop floor management or industrial shop floor management. SCM is the supply chain management, we should all suppliers to integrate with our past workshop, as this requires network information technology to solve. All suppliers should be treated as the last factory floor management to achieve, thus achieving our goal of collaborative management. “2” refers to the corporate management information monitoring system, QIS. I visit a lot of software, mostly based on all operating software of the people are honest to design the software. In our view, the idea of software necessary to change the look, the entire software in the future should be to ensure that our operational security.

In this regard, the UF has done very well, UF’s ideas and design and planning are done very well, it is the management software, combined with the mobile business, I can set the computer, I operate the following number of financial ministers When the funds will have a message sent to my phone, if I want to stop his operation, I just send a text message back, he can not move up; but if I think he can operate this behavior, I can not any answer. The monitoring system is very important, system security is particularly important in terms of an enterprise. QIS is the operation of the entire enterprise information system in the quality and product quality management and control. This is very important in terms of the automotive industry, because the automotive industry has a recall system, so we are each part, each product must have file tracking, this is complex information, data management, tracking of our terms are very important. Therefore, to enhance supply chain management, improve enterprise competitiveness.