China Economic Net: Sany Heavy Machinery: The Transformation of the Leader

Source: China Economic Net

As the leader of the excavator industry, Sany Heavy Machinery took the lead in raising the banner of change, grasping quality and service, reengineering the organizational process, and striving to improve its core competitiveness.

"In 2013, our business indicators were the best year in the company's history, even exceeding the peak of the industry's development in 2010 and 2011." Xiang Ruan, vice president of Sany Heavy Industry and general manager of Sany Heavy Machinery, said.

This achievement is not easy, from 2011, the construction machinery industry has entered a period of deep adjustment, the development of the industry ten years of golden period ended. Once the growth rate is lost, the problems in the industry that have been covered by rapid growth in the past have emerged one by one, such as disorderly competition, product quality needs to be improved, and the proportion of bad debts has increased, etc., these problems have plagued the entire domestic excavator industry, some enterprises have fallen into the quagmire, and some have even been liquidated and withdrawn. Over the past two years, Sany Heavy Machinery has been exploring and adjusting how to enhance its comprehensive strength in this flat market situation.

The data will not lie, in 2013 affected by the macroeconomy, the excavator industry maintained a low-speed growth trend, but as a leader in the domestic excavator industry, Sany Heavy Machinery still maintained a strong momentum and achieved remarkable results. According to the statistics of the excavation machinery branch of China Construction Machinery Industry Association, in 2013, Sany excavators achieved a total of 15,426 sales, continuing to lead the excavator industry, with a market share of 14.9%, becoming the first enterprise with a market share of more than 10%. So far, Sany excavator has won the national sales volume of 5656 for three consecutive years, becoming the undisputed leader in the industry.

At the same time, according to the data released by the User Satisfaction Survey Center of the China Association for Quality, Sany service satisfaction still ranks in the industry in 2013, and it has been awarded the China Service *5656 brand for four consecutive years.

In 2014, Sany Heavy Machinery continued to maintain a good development trend, and Sany received more than 1,000 sales orders at the excavator New Year series of order fairs held across the country.

There is no time for change

Regarding the situation of the construction machinery industry in 2014, the market is generally expected to continue the trend of stable operation in 2013 and continue to maintain the basic situation of overall stability. Most analysts believe that the prosperity of the machinery industry is neither optimistic nor pessimistic, and the overall demand will still be tight, which is a huge test for enterprises.

In the current situation, in order to improve competitiveness, it is necessary to transform from the pursuit of "economies of scale" to the pursuit of "benefits of scarcity". That is to say, machinery enterprises must go from the pursuit of "economies of scale" of products that can be produced by many peers to the "scarcity benefits" supported by their own unique advantages.

Specifically, construction machinery enterprises must change the habitual thinking of extension and expansion, and are committed to cultivating their own unique core competitiveness. Increase R&D investment, pay attention to the construction of test conditions and human resource investment, and improve the innovation ability of products and processes; Actively promote the deep integration of informatization and industrialization, pursue the greening and internationalization of products and production processes, and improve the lean level of production and marketing management of enterprises. As a leading enterprise in the industry, Sany is making great strides on this road.

Xiang Ruan feels that the market environment in the past two years has given the whole industry and Sany Heavy Machinery a rare opportunity to adjust, "There may not have been time to calm down and think about problems before, but we have really calmed down in the past two years and paid close attention to management." Strictly speaking, we are also making up for the missing lessons caused by the previous rapid growth. After two years of adjustment, I think we have achieved certain results, from products to services, there have been great improvements. ”

Products and services are the two major themes that Sany Heavy Machinery should pay attention to at all times, which is also the concept that Sany has always adhered to for many years. "For more than 20 years, we have been paying close attention to quality and conscientiously grasping every node. We talk to all our parts suppliers one by one to help them reduce costs and improve product quality. "When it comes to product quality, Xiang Ru'an has a lot of feelings.

Sany's business philosophy has always remained the same, but the changes during the period are step by step, steady and firm. When the industry encountered a downward trend, Sany reacted quickly and immediately put forward the "one strong, two modernization, three excellent and three construction control", strengthened the core values, promoted internationalization and informatization, and established a cost control system with relative competitive advantages; Establish a system of overdue inventory and risk management and control with relative competitive advantages, and control overdue inventory and risks; Establish a scientific investment decision-making system and control the pace of investment. When the industry prosperity index continues to bottom out and the deep-seated problems of the industry continue to be exposed, Sany put forward the slogan of "one to three noes", that is, "to pursue profitability and long-term profitability, not to blindly pursue scale, not blindly pursue seats, not blindly pursue market share". This guideline is equivalent to allowing Sany Heavy Machinery to brake in time, and the sound business strategy allows the company to avoid falling into trouble due to the downturn in the industry. In 2013, when the management judged that low-speed and stable development would continue to be the general tone of the year, Sany's business strategy became to reduce the company's debt internally and increase the proportion of sales in overseas markets externally. In 2013, Sany's overseas sales exceeded 10 billion yuan, becoming the leader of Chinese enterprises in "going global", and Sany Heavy Machinery made great contributions.

In the 2014 New Year's message, the slogan put forward by the Board of Directors of Sany was "Face Challenges, Firm Faith, and Forge Ahead". Xiang Ruan said that this slogan is to encourage all employees to be confident and positive, and not to be shaken by short-term market conditions. In terms of management, the company strives to take on a new look in the four aspects of the park, production workshop, work site and employee appearance, and complete the industrial dream of Sany step by step.

Insist on quality first

Sany Group has always been committed to "quality changes the world", and its product quality has always been in the leading position among domestic brands, and after two years of efforts and transcendence, the product quality of Sany Heavy Machinery has been more and more recognized.

In 2008, when the financial crisis began to rage, Sany Group launched the "Lean Manufacturing" activity to carry out all-round transformation of the internal process and management of the enterprise. In the past six years of reform, the effect of the "Sany Production System (SPS)" has gradually emerged, and strict quality control has been extended from the early stage of design to the end of the industrial chain. In August 2013, a new round of manufacturing reform of Sany Group was launched. In 2014, Sany will take "process, punctuality, and automation" as the three pillars to promote the further implementation of the "SPS" model and achieve the goal of "high quality and low cost" in manufacturing transformation.

In the past 2013, Sany Heavy Machinery has gained a lot in its quality work. Due to the excellent product quality, Sany excavator has taken the lead in the domestic market and maintained a market share of 5656. Compared with the previous generation of products, the C9 series excavator can achieve energy saving of 10% and 15%, increase the operating efficiency by 10% and 15%, and greatly enhance the stability. As a heavy machinery manufacturing enterprise, Sany has also made breakthroughs in the field of excavator parts such as four-wheel belt and slewing bearings, and the competitiveness of the whole product line has been greatly improved. At present, more than 40 types of slewing rings independently developed by Sany have been mass-produced. The breakthrough in the field of core components has greatly improved the performance and reliability of Sany excavators.

In November 2013, the "13th National Pursuit of Vietnam Conference" sponsored by the China Association for Quality was held in Beijing, and Sany Heavy Machinery won the 13th National Quality Award, becoming the first enterprise in the national construction machinery industry to win this honor this year.

The National Quality Award is a *5661 award in the field of national quality management, and its content is measured by the comprehensive strength of corporate culture, business strategy, performance results, on-site management and social responsibility, and is a summary of the successful experience of *5653 enterprises. A total of 11 companies or organizations have won the award, all of which are leaders in various industries, and Sany Heavy Machinery won the National Quality Award to show that its great industry contribution has been affirmed. From product development and innovation to industrial chain construction, from the accumulation of manufacturing and management experience in the construction machinery industry to the establishment of industry service standards, Sany Heavy Machinery has won this honor, which is well deserved.

In the international market, in recent years, Sany Heavy Machinery has been active in the center of the world stage, as China's emerging local brand power, Sany excavator continues to show the world the competitiveness of "Made in China".

On December 21, 2013, the authoritative British magazine The Economist published an article entitled "Digging for Victory". According to the article, the *5660 construction equipment produced in China has reached the world's advanced level. Researchers at CLSA conducted a two-week rigorous test of excavators made by six companies in China on productivity, durability and fuel efficiency, the article reads. After on-site comparison, the performance of Sany excavator is extremely eye-catching. Researchers commented that the Sany excavator surpassed its competitors in Japan and South Korea.

Nuggets aftermarket

Service is one of the killer features of Sany Heavy Machinery's growth. When the domestic construction machinery industry has not yet established a mature service brand, Sany Heavy Machinery took the lead and made three commitments of service "123", "110" and "111", which protected the interests of customers from the aspects of service value, speed and resources, and built the industry's leading service resource system, with more than 700 service outlets, more than 1,500 service vehicles and more than 3,200 service personnel.

In 2013, Sany Heavy Machinery still maintained a consistently high level of service in the past, but as the industry continues to mature, Sany Heavy Machinery has also made some fine-tuning in terms of service policy. In the early stage of the development of domestic brands, in order to win the trust of customers as soon as possible, they often take nanny-style all-weather service, regardless of the cost, which makes domestic brands achieve rapid growth at the same time, but also brings the disadvantages of high service costs. Nowadays, the quality of domestic brands is constantly improving, and the experience of customers using equipment is also increasing, and the probability of needing firefighting services has decreased significantly; At the same time, the low growth of the industry is also forcing companies to find ways to reduce operating costs. Therefore, Sany Heavy Machinery is ahead of other domestic brands and is striving to explore a new sustainable service model to achieve a win-win situation for manufacturers and customers without reducing service quality.

As the leader of the excavator industry, Sany Heavy Machinery took the lead in raising the banner of change, grasping quality and service, reengineering the organizational process, and striving to improve its core competitiveness.

Xiang Ruan said that the new service model will be appointment-based and health-care. If the service staff of the past was like an emergency doctor, the service staff of the future is more like a family health doctor, and the focus is on preventing problems before they occur and making the equipment less sick. In this way, it can not only reduce the cost of service, but also make the service work more scientific, mature and sustainable.

As part of the policy change, starting from August 2012, Sany Heavy Machinery gradually charged for some services. At the same time, the company has carried out key parts replacement cooperation with some customers, involving pumps, motors, cylinders, etc. In 2013, Sany Heavy Machinery's spare parts sales have increased significantly.

At the same time, the business volume of second-hand refurbishment has also developed rapidly. At present, this work is mainly led by regional agents, and Sany Heavy Machinery provides standardized operating standards for equipment overhaul. With this business, Sany Heavy Machinery has enhanced its ability to provide customers with full-cycle life services.

Re-engineering the organizational process

With the increasingly fierce competition in the market, Sany Group realizes that it is impossible to win by relying solely on a certain ability, such as products or services, and the differentiation of products and services in the industry is getting smaller and smaller, and it is necessary to establish a process-based organization to improve operational efficiency in order to support the continuous improvement of the overall core competitiveness. This is clearly reflected in the international giants. Take Caterpillar as an example, after ten years of construction of the global parts system, it can now make 750,000 parts, 24 hours of delivery, 48 hours of delivery; Caterpillar's dealer management system can realize real-time information exchange between the company's headquarters and dealers, and all quotations are made within the system. It is with this advanced information management system that a global benchmark company like Caterpillar has opened up a gap with its competitors.

In July 2013, the kick-off meeting of Sany Group's process informatization master planning project was held in Kunshan Industrial Park. Liang Wengen, Chairman of Sany Group, Tang Xiuguo, President of Sany Group, He Dabing, President of Huawei Global Solutions, and Luis Ceniga, Managing Director of Accenture Greater China, attended the kick-off meeting.

The process informatization master plan project aims to plan and establish end-to-end core business processes, build a process-oriented organization, enhance the core competencies of the group, and support Sany's business scale growth and global operation in the next 35 years. Xiang Ru'an said that the process informatization of Sany Heavy Machinery is mainly "4+2", and "4" refers to the product order process, customer service process, product research and development process, and business procurement process; "2" refers to the two internal management modules of financial management and human resources. The four core business processes involve business departments, and the process information headquarters is the engine and thruster of the group, and these six parts are the core departments that maintain the normal operation of the company.

Xiang Ru'an said that in the original organizational system, each department was mainly divided by function, and was only responsible for the work of its own department, regardless of the information of the department before and after, so the various departments were blocked from each other, and it was inevitable that there would be a situation of pulling each other's skins. The new process informatization project puts each department in the whole process, breaks the barriers between departments, and establishes a smooth information channel within the company, and the flow of information between each department node will not have a breakpoint, from *5656 departments to the next department, the information flow forms a closed loop. Enterprises need a set of fixed business models and modes of operation, through the construction of process informatization, the company from relying on "capable management", to "everyone can manage", management is not only more transparent, but also more efficient.

Competition is a marathon

Sany is a company with a strong sense of crisis, although the Economist reported that the performance of Sany excavators has surpassed Japanese and Korean brands, but Xiang Ruan is not so optimistic. Market competition is a marathon, in the past ten years of the golden period, the development of domestic brands far faster than foreign brands, despite this, the core competitiveness of domestic brands and foreign brands is still a big gap. After the industry entered a period of steady development, the shortcomings of some domestic excavator companies were exposed, while the customer base of foreign brands was relatively high-end and less impacted. In the long-term competition, the stamina of foreign brands should not be underestimated.

Among the companies that bucked the trend in 2013, Caterpillar performed equally well. In 2013, Caterpillar continued to fully introduce its globally successful business model to China: "actively and seriously build local R&D capabilities, quickly and systematically deploy production capacity, and meticulously 'seed' a complete set of business models into the Chinese market." Caterpillar is stepping up its efforts to build China, the world's *5655 machinery and equipment market in the future and *5654's export destination to other emerging markets, into another "home operating base" for Caterpillar in addition to the United States.

The results are clear. In the first half of 2013, Caterpillar ranked #5656 in the sales volume of 20-ton to 30-ton excavators in the Chinese market. In addition to this area of strength, Caterpillar has also launched the new E Series 305.5E, 306E and 307E small hydraulic excavators, aiming at China's ongoing urbanization process and the increasing impact of rural constructionSmall diggingMarket demand.

In addition, foreign brands such as Komatsu, Volvo, Kobelco, and Hitachi have also strengthened their attention to the needs of the local Chinese market, and have launched new excavator products that are more suitable for the Chinese market. Jason Daly, China Sales Director for John Deere & Company's Construction & Forestry Equipment Division, once said, "China is one of the world's largest construction machinery markets of *5655, and we are proud to be a part of it. For many international construction machinery giants, no matter how bad the current competitive situation is, the Chinese market is their "heart" that is difficult to give up.

The pressure on domestic brands brought by such a situation can be imagined. Xiang Ruan feels that some domestic brands are in trouble, while some brands have disappeared completely, and industry consolidation is accelerating, which is a pressure that all companies have to face. He believes that if the market continues to maintain the current heat, it is not surprising that the market share of foreign brands will increase, while the market share of domestic brands will decline.

Despite the fierce competition in the market, Xiang Ruan also feels that the market competition can be more rational, "We should look at the problem from the customer's point of view, and never forget the customer." There is both competition and cooperation between enterprises, for the benefit of the industry as a whole, in order to provide users with the value of *5655. Construction Machinery Weekly/Zhou Weiwei