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Half a month ago at CCMT2006 held in Shanghai the portal shaped and movable lathe turning and milling machining center developed by Shenyang Machine Tool Group No. 1 Machine Tool Works by use of high-tech of SCHIESS AG, guide rail under static pressure could complete lathe turning, boring, drilling, tapping, and milling and fully realize five-shaft machining among all products on display of over 80 famous enterprises of machine tools from 13 countries and regions.
“We have invited 33 overseas agents to the exhibition. We are not content with competing with internationally competitive rivals on the Chinese market, however we will chase globally high rank market. Shenyang Machine Tool shall walk out of SCHIESS to set up a platform of technical research and market development at a high starting point in Germany.” introduced by CHEN Huiren, President of Shenyang Machine Tool Gropu on March 7. Last year Shenyang Machine Tool realized RMB 5.55 billion sales income, leaping forward to the top ten of machine tools in the world, and its sales income from overseas markets broke through 50 USD; Shenyang Machine Tool will realize RMB 8 billion sales income, and its sales income from overseas markets will break through one hundred million USD this year.
Impressive: seizing the market in the hands of others
“It is impossible for an enterprise not to be affected by the market, however we cannot be under the influence of market positively,” introduced by CHEN Huiren. Domestic demand for machine tools increased by 40% annually from 2000 to 2004. At the beginning of last year the increase in demand for machine tools tended towards rational growth and dropped to 20% or so. It is estimated that the demand will drop to 15% or so this year. Nevertheless the sales volume of machine tools in China accounted for 1/4 of that in the world last year, where the consumption of machine tools was still the largest in the word. At present domestic industry of machine tools appears to be polarized. The big and small, the powerful and weak are clear at a glance. Shenyang Machine Tool is grasping the market opportunity to expand its own relative advantage and to “update its edition”, and its powerful market focusing effect has come into being.
In Aug. last year Shenyang Machine Tool Group recalled the numerically controlled machine tools that were supplied to key industries of the nation before 2000, and by the year-end the plan for recall was completed. They invested RMB 20.10 million in replacing and overhauling 78 numerically-controlled machine tools free of charge, and all of them have met operating requirements. Shenyang Machine Tool Group decided to start up its strategic plan at the 2nd stage on March 1, namely “Plan B” in order to realize new breakthrough in client service concept and accelerate the developing progress of the industry of numerically-controlled machine tools in China.
To start up “Plan B”is to expand client service from traditionally simple service links with machine tools to the whole course of research and development, manufacturing, training, use, and improvement to realize “Zero Complaint”of clients in national key industries by the year-end. The activity is original in the industry of machine tools throughout the country.
“Under the background that market demand is dropping down, Shenyang Machine Tool has to open new market to keep high speed increasing. It means seizing the market in the hands of others. We should be impressive and get recessive returns with dominant input,”introduced by CHEN Huiren. Shenyang Machine Tool has already replaced the contract clause, “we don’t bear the responsibility for improper use of users” with “we will bear the responsibility if there is any problem arising.”when a lot of fellow traders are complaining “being ignorant of machine tools, the users damaged them.”With independent innovation they are pushing forward towards international market.
“This year is intended to be “an open year”by the City Party Committee and the City Government. The open strategy of Shenyang Machine Tool not only includes overseas purchase but also adjustment of market structure. The enterprise's anti-risk capability will be increased greatly when our domestic and overseas market share proportion reaches 7:3. Shenyang Machine Tool will neither have a prospect nor become an internationalized major company without walking out of gate of the capital city.”introduced by CHEN Huiren. At present the market structure of Shenyang Machine Tool is very unreasonable, 90% of its products are sold at home. Therefore, Shenyang Machine Tool will lay emphasis on expanding international market this year.
Insufficient independently innovative capability once became the main contradiction that restricted the development of Shenyang Machine Tool. It is necessary to race to control technical commanding point in order to expand international market. Therefore Shenyang Machine Tool must create an open type of innovative system being geared to international needs. At the beginning of this year, Shenyang Machine Tool Group invested RMB one hundred million in PRD (a plan for research and development of new products). The independently innovative plan has been started up in all its aspects to develop pertinent and competitive high and medium grade new products, being geared to the needs in such fields as automobile, navigation and space flight, shipping, power station, and electronics.
In order to ensure successful implementation of “PRD”, Shenyang Machine Tool is building an internationalized platform. As the Headquarters of Technical Research & Development the Group has set up branches in Shanghai, Beijing, and Germany to form a technically innovative team including local excellent talented persons. A difference of 10 to 15 years as compared with the industry of machine tools in developed countries will be shortened in 3 to 5 years.
At this stage the Industrial Park of Numerically-controlled Machine Tools of Shenyang Machine Tool Group is being pressed on with construction in the Economic and Technological Development Zone, which occupies an area of 1 square kilometers. It will become a manufacturing base for machine tools on the largest scale in the world and the most advanced digital factory in the industry of machine tools at home after the Park is built up, and its core is to build a technical research center of numerically-controlled machine tools giving priority to independent innovation. Shenyang Machine Tool has invited 36 postgraduates for them to receive training from professional companies and professional research institutes in Germany. It has been provided with the condition of personnel to set up a technical research center.
Kin Harlish, President of World Hardware, an exclusive agent for Shenyang Machine Tool in USA told the reporter delightedly that there were more product specifications and more selections of Shenyang Machine Tool, which were provided with great competitiveness on international market in reasonable ration of performance to price after he watched the wonderful cutting performances of the 26 numerically controlled machine tools with independent property rights displayed by Shenyang Machine Tool at CCMT2006. He has the confidence that the brand of Shenyang Machine Tool will be built up and its sales volume will be the first on the market of machine tools in USA.
“Addition and subtraction”: Build up the enterprise
On Oct. 12 last year GUAN Xiyou, General Manager of Shenyang Machine Tool Group was invited to the forum in the 1st summit meeting in the manufacturing industry of machine tools of Germany as the only overseas representative of manufacturing enterprises of machine tools. He won a storm of applause when he introduced present situation and the future of the manufacturing industry of machine tools in China to his German fellow traders in fluent German. On Oct. 30 German Association of Industry held a forum in Beijing for Chinese enterprises to purchase German ones. The forum representatives believed, “It is a successfully transnational case for Shenyang Machine Tool to purchase German SCHIESS. We cannot neglect the existence of Shenyang Machine Tool Group, and we need to consider its management model carefully.”
“The industry of machine tools is not large as compared with such industries as real estate, automobile, and steel. However machine tools are those in the equipment manufacturing industry. To develop the equipment manufacturing industry has been in a strategic degree of national will. Therefore it is a key period for Shenyang Machine Tool to develop, and it is also the best period of opportunities. It is an important “turning point.” At present our development is aiming at the second and the first in the industry of machine tools in the world. The policy focusing effect follows when the market focusing effect of Shenyang Machine Tool is coming into being.” revealed by CHEN Huiren. Shenyang Machine Tool has laid an internal foundation for carrying on policy environment before relevant policy comes on in the industry of machine tools. That Shenyang Machine Tool purchased SCHIESS AG was under the financial and policy support given by the provincial and municipal governments.
CHEN Huiren created a miracle of high-speed operation of Shenyang Machine Tool by dialectic thinking of “addition and subtraction”—— “To build up the enterprise by use of addition and to strengthen the enterprise by use of subtraction.” So-called building up the enterprise by use of addition means an integration of global resources that will be utilized by an enterprise. There is a kind of open mechanisms, which can quickly build up an enterprise. To strengthen an enterprise by use of subtraction means an enterprise keeping to its primary service and fully throwing off any business that is not related to primary service or is disadvantaged.
How much is the gap between Shenyang Machine Tool and the power in the world? CHEN Huiren compared it visually with a long-distance running race. In the past we could not see the dust they raised; at present we are stepping on their shadow finally; next year the sales volume of Shenyang Machine Tool will reach RMB 10 billion, there will be great improvement in both product structure and market structure, and the product levels will be greatly increased. Then we will run shoulder to shoulder with them.
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