How does a construction machinery company establish a supply system?

Supply chain construction is of great significance to enterprises. How to establish a stable and reliable component supply system?

Is the market a stable and reliable supply chain?

Adopting market means to conduct international procurement provides a good choice for the supply chain construction of Chinese construction machinery companies, and has also made great contributions to the development of the Chinese construction machinery industry. However, to become a world-class powerhouse, can China's construction machinery supply chain construction completely rely on international procurement?

In an exclusive interview with the magazine, Yu Hongfu, Chairman of Sany Heavy Machinery, believes that although the domestic engineering machinery host companies experienced supply restriction of core parts at the time of the hot market, in the long run, they should be able to solve this problem through market self-regulation. problem. For example, certain core components are in the hands of a few manufacturers. Profits are high here. As long as it is a link with high profits, it cannot be sustained in the long term. One day, many people will join the field to compete. According to Tao Haijun, dean of the excavator research institute of the Shanhe Intelligent Equipment Group, the development of supporting parts lags behind the development of the whole machine industry. It is an indisputable fact. From the current point of view, it is even more hopeful that international suppliers of parts and components will accelerate investment in China to build factories or increase investment to ease supply problems, especially during the peak season. The establishment of a joint venture factory with foreign parts manufacturers by local companies is a good way to stabilize their own supply chain and solve the supply problem of the company. However, the joint venture company has a certain degree of exclusiveness, due to issues related to technology, supply stability, etc. To a certain extent, it restricted the external support of the joint venture company. I personally think that third-party supply can be based on long-term and truly solve the worries.

Xu Suyun, vice president of XCMG Group, said: "For some products, we have a cost-effective advantage, such as loaders, but there is still a gap between the level of products and the high level of the world." Solving the problem of "presence or absence of products" can rely on the global supporting system to quickly form products. This is a good choice. However, in order to form a strong competitive edge, I think that independent research and development of core components is our long-term commitment. Only by forming its own core in these areas will it be possible to make the product high-end. Otherwise, even if the product can be made, it will have a certain degree of competitiveness at a certain stage. But when it comes to occupying the market of the world's giants, they may have one. A series of measures restricts our development.

joint venture?

It is common practice for host companies to set up joint ventures with core component companies to establish a stable and reliable supply system. For example, Komatsu and Cummins have established joint ventures in Japan, and Hyundai and Cummins have established joint ventures in South Korea. Although Caterpillar has its own relatively complete supply system in the world, it also establishes a local supply system in China through joint ventures. For example, Carter and Liyuan Hydraulic Co., Ltd. established a joint venture in Wuxi to build Ruili Hydraulic Systems Co., Ltd., according to its standards. The products produced were integrated into Carter's supply system and used the Carter brand. Liugong has established joint ventures with Cummins, Germany and ZF. In particular, when the export market is booming, the supply of core parts is in short supply. How many ZF transmissions can be obtained by the main engine plant can be exported to a number of loaders. At this point, Liugong’s advantage in parts and components is reflected. In addition to the joint venture with Meritor Axle and Rottide slewing ring, Xugong also established Doosan Engine Joint Venture with Doosan. The company also formed a joint venture company with Mitsubishi Heavy Industries Co., Ltd. in Japan to produce and sell 500-1600 kW (kW) high-power engines and generator sets for marine and land-use generator sets.

Wang Min: The realization of the vertical extension of the upstream industry is a strategic concept of Xugong. XCMG has always attached great importance to parts and components construction, including independent construction and joint ventures. For example, it has established joint ventures with Meritor Axle and Rottide slewing rings. XCMG Group also established a joint venture company with Doosan Group of Korea to establish Xuzhou Xugong Doosan Engine Co., Ltd. (Xugong Doosan). The joint venture will introduce advanced, market-compliant diesel engine technology that is virtually synchronized with Doosan and will research, develop, manufacture and sell diesel engines for construction machinery.

Wang Min, Chairman of XCMG Group, stated that the realization of the vertical extension of the upstream components of the core components and the manufacture of the engine is a long-term strategic concept of XCMG. For example, the joint venture between Xugong and Doosan, through the combination of XCMG's internal market and Doosan Engine's advanced and applicable technologies, hopes to upgrade XCMG's mainframe to a new level and level, and develop a differentiated development path.

Wang Xiaohua: The corporate development strategy requires supply chain support. In terms of supply chain construction, Liugong has been doing a lot of solid work. For example, a joint venture with ZF to produce gearboxes, a joint venture with Cummins to produce engines, and Liugong core casting R&D and manufacturing projects. Liu Hong, chairman of the board of directors Wang Xiaohua said in an exclusive interview with the magazine: The company's development strategy requires the supply chain support, Liugong also the same. The core competitiveness of a company is reflected not only in a good R&D system, but also in the support of key components to the company. The development of key components is an important task for Liugong during the 12th Five-Year Plan period. Some parts of the company are manufactured by oneself and some parts need to be purchased from the market. The development of enterprises needs support. This support comes from all aspects. We want to establish and deepen Liugong's strategic partnership with suppliers through the integration of supply chains. The development of Liugong is in sync with the development of strategic partners. For example, Liugong’s technological transformation will require partners to meet this standard. The scientific development concept advocated by the country and the transformation of economic growth models are an opportunity for us.

Sole investment?

Kawasaki Hydraulics established Kawasaki Precision Machinery (Suzhou) Co., Ltd. in Suzhou, and Kawasaki Chunhui Precision Machinery (Zhejiang) Co., Ltd., a joint venture established in Shangyu, Zhejiang, producing hydraulic pumps and hydraulic motors. The hydraulic system at the core of the hydraulic excavator The valves are not produced in joint ventures or wholly-owned enterprises in China. Doosan Hydraulics in Korea saw a broad market in China. In 2012, Doosan Hydraulic Machinery (Jiangyin) Co., Ltd., a wholly-owned company, was established in China. It also produced only hydraulic pumps and hydraulic motors. There were no production valves. These manufacturers did not put into production lines of the full set of products and the most core products in China. It is undeniable that foreign-funded parts suppliers with leading technologies have invested more in the establishment of wholly-owned enterprises in China, and in a modest manner, they have provided Chinese companies with good parts and components products. However, China's construction machinery companies can rely entirely on foreign core components to establish wholly-owned enterprises in China to establish their own stable and reliable supply system?

Self development?

Wu Peiguo, chairman of SINOMACH, said in an interview with the publication regarding issues related to the construction of supply systems that the establishment of a stable and reliable supply system is a matter that every leading company must seriously consider. Each company also has its own methods and strategies. The core parts and components of companies that have succeeded abroad are self-manufactured or controlled by themselves. Some leading domestic companies are also advancing in this direction and are striving to achieve this goal. Since SINOMACH has just integrated, it needs more time to establish a stable and reliable supply chain or establish a stable partner. This is the goal pursued by SINOMACH.

The president of Shandong Changlin Group, the bell, defaults: According to the current status of China's hydraulic parts industry, only if the entire industry level is improved, it is possible for China's hydraulics companies to develop well, and it is possible for individual hydraulic companies with strong competitiveness to emerge. During the press conference for the new hydraulic products of Zhongchuan Hydraulic Co., Ltd. under the Shandong Changlin Group, Zhongchuan Hydraulics invited the CEOs of the hydraulics industry to discuss it together. It is rare for a company to invite many peers (also direct competitors) to participate in a new product launch. By default, Chung Chuan Hydraulics is unlikely to stand out in the background of the lower level of the entire industry. Zhong Mo believes that as long as there is more cooperation and efforts, the spring of China's hydraulics industry will come in the near future.