Winning in China: Reflections on the Localization of Multinational Machine Tool Enterprises

It seems that everything is a matter of course. The Chinese economy has taken the lead in getting out of the global financial crisis without a suspense and started a new round of economic cycles. There is a more brilliant fact behind this news: China's total manufacturing output surpassed Japan in 2009 and became the world's second largest manufacturing country; in 2009, China's automobile production and sales jumped to the top in the world; China's wind power installed capacity for the fifth consecutive year Achieve 100% growth, etc. No company dares to ignore such a market with huge potential and rapid development, and machine tool companies are no exception. More and more foreign machine tool companies are beginning to consider entering or accelerating the layout of the Chinese market. The multinational machine tool enterprises that entered the Chinese market earlier experienced the ups and downs of China's manufacturing industry. Especially after the prosperity of the machine tool market in the new century, they have accumulated a lot of effective experience and practices. Now it is the best release. opportunity. Inducting the way in which local multinational machine tool enterprises operate in China has a positive reference for understanding the advanced management methods of foreign-funded enterprises and promoting Chinese enterprises to explore the international market.

First, localization is the inevitable development
Localization is actually developed along with the deepening of globalization. The development of globalization has made localization inevitable, while localization has promoted globalization from depth and breadth. To some extent, the localization of multinational machine tool companies is no different from the localization of other industries in the Chinese market. However, as a basis for a national equipment manufacturing industry (even a mission to be given a national defense), and carefully clarifying the development track of multinational machine tool companies in China, they can always find their own things in this industry.

Second, the experience and enlightenment in localization
1. Flourishing local production
The establishment of a local factory is an important step in localized operation, and it is the response of multinational enterprises to factors such as delivery cycle and cost pressure. Foreign-owned machine tool companies have set up factories in China for a period of rapid development in recent years, and a few companies have started earlier. The high starting point of these factories from the beginning of their establishment has demonstrated the determination of the company to lay out China.

In 2000, Xiaojuen Machine Tool Co., Ltd. was established, and immediately introduced the construction concept of Mazak's latest intelligent network chemical factory, which pioneered China's intelligent network chemical factory.

In 2003, the DMG (Shanghai) plant was completed and started production. This is the first factory outside DMG Europe.

In 2005, the international grinding machine giant Schleifring production base opened in Taicang. Three years later, in order to further meet the needs of the Chinese market, it moved to Shanghai.

In 2006, EMAG set up a factory in Taicang, the first factory in the Asian region to produce an inverted turning center known to Chinese users.

In 2008, Haas Automation of the United States established the company's first overseas factory in Shanghai.

The latest news came from MAG in the United States. Its wholly-owned factory in Changchun was put into operation in the first half of 2010. In fact, this is not the beginning of MAG local production. The history of producing machine tools in China can be traced back to the joint venture factory in Changchun in 1995.

1995 is certainly not the earliest. Sweden's Sandvik Coromant set up a factory in Langfang, Hebei, to advance this time to 1993. After several capital increases, it is intended to build the Sandvik Group's Asia Pacific's largest production center.

The above is just an incomplete list of the establishment of factories in China by multinational machine tool companies, and the number far exceeds this figure. In fact, with the development of China's manufacturing industry and the rise of China's machine tool companies, more and more multinational machine tool companies have chosen to set up factories in China under the pressure of accelerating the supply cycle and improving product cost performance. Of course, due to various considerations, the key components of these localized products, and even most of the components, are internationally procured, and the assemblers are all subject to rigorous training. This is also an important reason why these localized products can maintain "Made in China, international quality."

2. The localization of the product has become a common practice.
Compared with the products that are matured in foreign markets and produced directly in the local market, the redesign of products for the local market has taken the localization operation a step further and won the attention of Chinese customers for multinational machine tool enterprises. In order to better adapt to Chinese users, in 2008, the team of Schleifring redesigned its own KP series and launched the KP Compact simple surface grinder for the Chinese market, which made its debut at the 2008 exhibition. Of course this is just the beginning. As early as 2006, DMG launched the CTX 310 eco machine tool tailored for Chinese users. This machine tool has taken on the mission of cultivating Chinese users. In the following years, DMG frequently launched medium-end machine tools that are cost-effective in China. While improving the product chain, it has further expanded the scope of customers. In the field of numerical control systems, Siemens has launched an 802C economical numerical control system developed specifically for the Chinese market, which penetrates into the low-end market.

Redesigning some of the products is more common in German and Swiss machine tool companies that are known for their precision and high performance. Their products are at the peak of the world's machine tool industry, and in the face of Chinese users with multiple levels of demand, the contradiction between supply and demand asymmetry has begun to emerge. Between how to avoid "high and low" and maintain "high-end image", they chose to redesign. According to the national conditions of China's metal processing industry, the “high-end machine tool” of “simple version” or “economic version” will be launched. Undoubtedly, this move will definitely break the existing low-end market and reshape the “low-end market” in the Chinese market. "The standard."

3. The transition from product to service
The establishment of the spare parts center means an increase in the responsiveness of the region. In 2007, DMG set up its Asian accessories center in Shanghai and vowed to carry the service to the end. Two years ago, it moved its Asian headquarters from Singapore to Shanghai. . Haas Automation from the United States successfully transplanted its globally operating HFO model to China. In just a few years, it has established 18 HFOs in China that integrate display, training and spare parts. "Services subvert the service concept of the CNC industry and win praise from users.

In the field of cutting tools, multinational tool giants bring leading-edge products and advanced operating modes and localized services. In 2010, Sandvik Coromant set off a national tour of the 25th anniversary in China. Three years ago, in 2007, Sandvik Coromant Greater China Mold Application Center opened in Shanghai, which is the world's first mold application center. In the tool industry, the establishment of a non-standard design center means that products and services are closer to the local market. For this reason, multinational tool companies such as Kenner, Seco, and Iskar have set up non-standard tool research centers in China to meet the needs of Chinese users and promote the improvement of China's non-standard design capabilities.

4. Social responsibility in talent development
Foreign-funded enterprises understand the importance of talents for their development in China, and they have spared no effort for the cultivation of local talents in China. In 2010, Seco’s scholarships at Tsinghua University have been held for three times. In 2009, Sandvik Coromant and Beijing University of Aeronautics and Astronautics formed a strategic cooperation, jointly established a joint laboratory of advanced processing technology for the aerospace industry, and established a scholarship. In the machine tool industry, Schleifring and Tongji University jointly built a grinding technology laboratory, and promised to provide opportunities for internships at their R&D centers in Germany and Switzerland as well as in Chinese factories.

In addition to continuing to pay attention to the high-end talent investment in China's manufacturing industry, the lack of advanced skills talents has always been the bottleneck of China's manufacturing industry. For the biennial National CNC Skills Competition, Sandvik Coromant, Siemens, FANUC and other companies are actively involved in it, in order to promote the cultivation of China's senior skilled talents, promote the development of China's manufacturing industry, and practice their social responsibilities. . Some companies also organize their own activities to give back to China's education. In 2010, the University Student Automation Application System Technology Competition held by Mitsubishi Electric has been carried out to the fourth session, which has played a positive role in promoting the innovation and practical ability of Chinese university students.

Third, localized operation is endless
Globalization is endless, so localized management will not stick to the current form. From the current point of view, the localization of foreign machine tool companies is far less thorough and in-depth than the localization of other industries.

1. The R&D center is absent
At present, there are still relatively few multinational machine tool companies that set up R&D centers in China. Even if R&D centers are set up, they will only carry out some local redesign work. The ability to set up a research and development center in the local area has always been one of the core elements of localization. The establishment of a research and development center in China will help promote China's transition from a machine tool manufacturing power to a machine tool manufacturing power, becoming a powerful technology incubator, and on the other hand, helping to compete and engage with Chinese local machine tool R&D institutions. Promote the innovation capability, competition awareness and international vision of Chinese R&D institutions, further increase the technology spillover effect, and at the same time, have positive significance for accelerating the cultivation of R&D talents in China.

2. Localized procurement needs to be strengthened
Whether the proportion of localized procurement and localized procurement is an important indicator for determining the degree of localization. At present, most foreign-funded machine tool companies in China are mainly assembled, and key components are mainly imported. On the one hand, from a subjective point of view, these multinational machine tool companies hope to ensure the consistent high quality of products through the selection of key components, so as not to give Chinese users the impression that localized manufacturing is equal to quality assurance, thus purchasing key components. On the other hand, a fact that cannot be ignored is that the strength of Chinese local enterprises is still weak in key components, and it is impossible to enter the sequence of foreign machine tool manufacturers, and most foreign machine tool companies are There are no parts factories in China. For companies such as some functional components, such as electric spindles, there are very few factories in China.

The reason is that the machine tool, as the mother machine of the manufacturing industry, has higher precision requirements than the manufacturing industry. It relies heavily on technology, R&D talents, and assembly workers. The country where the machine tool industry is developed has gone through decades or even hundreds of years of technology. Talent accumulation has achieved today's achievements. Due to the requirements of technical confidentiality, it is difficult for some R&D and manufacturing positions to be transplanted to China. The ability to recruit sufficient and competent R&D talent is also a bottleneck for local R&D and manufacturing. Unreasonable professional settings in Chinese institutions of higher learning have caused serious disruptions in the fields of machine tools, knives and other functional components. This situation has not only improved, but has become worse. In an interview, Li Yuxi, general manager of Iskar Tool (Shanghai) Trading Co., admitted that it is difficult for graduate students to come to Iskar to be competent in the design and development of tools. The lack of talent has objectively hindered the settlement of multinational machine tool R&D centers in China. Due to other non-competitive factors such as national defense, some high-end machine tools cannot even be exported to China, let alone localized production and manufacturing.

Fourth, the conclusion
Despite the problems of one kind or another, compared with the development and transfer speed of other industries in the manufacturing industry, Lenovo's booming modern manufacturing industry can be known that the localization of multinational machine tool enterprises in China will gradually accelerate. At the same time, China's local machine tool companies have developed rapidly in the competition with foreign machine tool companies by virtue of the advantages of “time, location and people”. According to the data of China Machine Tool Industry Association, the localization rate of the machine tool industry has been increased to 70%, and the structural adjustment effect is remarkable. It is conceivable that by then, I am afraid that the gap between the Chinese and foreign machine tool industries will be shortened to the point where the two sides meet each other!

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