EAST: Let technology serve the market

At the beginning of the contact with the buyer of the unmanned subway in Hawaii, the United States, when negotiating the UPS (uninterruptible power supply) order, He Simo, chairman of East Group Co., Ltd., was not fully sure, because at the same time participating in bidding There are also industry-leading companies such as Emerson, Eaton, Schneider and other Fortune 500 companies. When he finally won the project with original technology and excellent quality, He Simo realized that this would be a landmark event in the company's development history.

East is a key high-tech enterprise of the National Torch Program and a listed company for energy grid system integration solutions. It has nearly 80 capital or holding subsidiaries, and has established 268 customer centers around the world, covering more than 100 countries and regions around the world.

The development history of EAST seems to be a microcosm of Made in China. A start-up company that produces communication power supplies first did OEM for other brands, and later formed its own R&D team, and then seized the opportunity to build its own brand, and then grew into a leading enterprise in the industry.

The product's entry into the US market has added a powerful weight to the company's internationalization pace, and it also means that it has begun to rank among the ranks of mid-to-high-end manufacturing enterprises. Going deep into the areas that have not been touched yet, on the one hand, with the help of external forces, EAST takes the road of combining production, education and research, enhances the strength of technological innovation, and promotes the formulation of industry standards; on the other hand, it cultivates customized talents and accelerates the "machine substitution". automated production upgrades.

Continuously transform and adapt to changes

On the wall of the East Hall, there are a few strong characters written—a century of the East. As an enterprise determined to become a century-old brand, EAST is constantly making adjustments to adapt to the changing environment.

There are several important time points in the transformation and upgrading process of EAST:

In 2001, it was mainly OEM for Schneider and other international famous brands, OEM power supply, The annual sales are only over 30 million yuan;

In 2006, the joint venture with Schneider, in addition to focusing on UPS power supply, also developed and produced photovoltaic inverters, bringing new growth points to the company.

In 2008, it realized the transformation and upgrading from OEM to independent brand. At the time of the financial crisis, Schneider's stock plummeted. After friendly negotiation between the two parties, EAST acquired a 60% stake in EAST Power System Technology Co., Ltd. held by Schneider at a very favorable price. Subsequently, the company entered the field of photovoltaic new energy and vigorously developed the photovoltaic inverter industry.

In 2014, the company was successfully listed on the Growth Enterprise Market.

The gross profit in the OEM era is only 6%, while that in the private label era is as high as 35% to 40%. With every transformation and upgrade, EAST is expanding to the upstream of the value chain, from the production links with meager profits to the technology and marketing links with relatively large profit margins.

In recent years, the company has been adjusting its product structure. In addition to continuing to do well in the main business of UPS, it has also ventured into the fields of photovoltaic power generation and smart microgrids. "Seize the great development opportunity of strategic emerging industries, and the company's competitiveness will be greatly improved." Chairman He Simo said, "Many companies are getting smaller and smaller because they lack the courage to transform and upgrade. Since 2010, Yixing has The average annual growth rate of Shite is not less than 50%, because of the courage to innovate and break through ourselves. If there is no transformation and upgrading, it is impossible to achieve such a high growth."

The core of "Made in China 2025" It is to upgrade to mid-to-high-end manufacturing, and various national policies have also opened the green light for enterprises that are actively transforming to mid-to-high-end. Especially in the exploration of promoting the industrialization of scientific and technological achievements, it has opened a lot of convenience for the development of scientific and technological enterprises. He Simo suggested that for those emerging industries and high-tech enterprises that are in the early stage of transformation of scientific and technological achievements and lack market share, the government's favorable policies are a way to get out of the predicament.

Technological innovation, promoting the formulation of industry standards

In the early stage of the US driverless subway bidding, the purchaser did not trust EAST, but only gave the project specification without giving the complete edition of the tender. Because the UPS system for driverless subways has unique requirements, strict standards, and high requirements for safety, reliability, and information response speed, and the original image of Chinese companies makes them "look at EAST with a different eye."

One of the cores of the UPS system is the battery management system. Different projects have different requirements for the management system, which means that each design is a new attempt. From raw materials to finished products, there are a total of 8675 parts. In the process of design and production, He Simo and his R&D team often did not have ready-made standards to refer to, and finally their own innovative technology became the industry standard.

At first, Japanese equipment was purchased in some operation links of the subway project, which required the power output of the UPS to be changed from the American standard to the Japanese standard. However, due to the different battery usage of UPS in different operation links, according to the traditional method, different devices need to be equipped in different links, which means a great increase in cost.

In order to create a new UPS system with a high degree of matching with the project, they developed a management system that can adjust the value, so that the battery can adapt to different operation links, and even if the individual battery is damaged during use, As long as the relevant values are adjusted, the normal operation of the system can still be guaranteed.

"For the high-tech industry, its development trend is to go higher and farther in the process of constantly breaking industry standards. If an enterprise becomes the setter of industry standards, it means that this The enterprise must be in the leading position in the industry, its technology must be ahead of everyone at present and will lead the future development direction of the industry, and take the initiative in the market competition.” He Simo said.

East insists on making technological innovation according to the needs of the market. In order to grasp the balance between technology and the market, He Simo lets technicians directly connect with the market. Many R&D personnel of EAST will be arranged to work in the marketing department, provide technical services for customers, and fully communicate with customers to understand what kind of products the market needs. And their salary is also directly linked to performance - the highest salary is 18 months, and the minimum is only 13 months, so as to widen the gap as much as possible to play a motivating role.

"A half-step ahead is a pioneer, and a two-step ahead is a martyr". If technological innovation is too advanced, it is not easy to be accepted by the market, and the maintenance cost is high. Customer-centricity also ensures that innovation can be controlled at the level of "half a step ahead", which is also the technological innovation strategy pursued by EAST: not to pursue excessive innovation, but to focus on grasping the market demand, let technology Serve the market.

In addition, EAST has established strategic cooperative relations with more than 20 universities such as Tsinghua University and Zhejiang University, taking the road of combining independent innovation with production, study and research. On the day of the interview with "World Manager", the celebration activities of Dongguan Tsinghua University Alumni Association were held in East.

It takes a long process to turn research results into products that customers really need. When a new function is invented, it needs technical personnel who understand the production process to implement it and turn it into a product. Even a small change requires a lot of experimentation. Researchers in universities and research institutes are good at technological breakthroughs; the company's R&D personnel have rich engineering experience, know the needs of the market and customers, and understand various production processes. EAST gives full play to the strengths of both, and entrusts the pre-research work to college teachers to complete, and its own technical personnel are responsible for implementing the relevant research results and finally making them into products.

Every year, the company's R&D expenses account for more than 50% of its net profit. A lot of investment has also brought rich output: the company now has more than 600 patents and software copyrights, and has mastered more than 60 core technologies. These original technologies and patents provide the company with a passport to enter the global market and may become a new source of profit in the future.

"Machine Substitution" Forces Employees to Promote

East is carrying out the "Machine Substitution" action to automate the transformation of the production line. After the development of products to the middle and high end, the original hand-made production method can no longer meet the requirements of high quality and efficiency, and the degree of automation of production needs to be improved.

In terms of hardware, the company has built an SMT&AI automatic production line, introduced an automatic CNC machining center, and realized automatic production in multiple processes such as product production, testing, and inspection. In terms of software, PLM and MES management systems are used, on the one hand to monitor the entire product life cycle, and on the other hand, through information transmission, the quality management of the entire production process from order placement to product completion is carried out.

After "machine substitution", product quality and work efficiency have been greatly improved, while the labor intensity of employees has been greatly reduced. In the plug-in process, the work that used to require 800 employees can now be completed by only 60 people.

At the same time, "machine substitution" also forces employees to change to knowledge-based and technical-based talents. In the past, almost all the technicians graduated from junior high school and technical secondary school in the factory, but now there are 680 R&D personnel with bachelor degree or above, and about 20 doctors and postdoctoral fellows.

“To realize intelligent manufacturing, we need not only automated equipment, but also a large number of high-quality industrial technical workers who can operate the equipment.” He Simo said, “It is not easy now, and the entire industry lacks advanced technology. Technical talents.”

Beginning this year, the company has adjusted the evaluation mechanism for employees, so that front-line technical personnel have the same promotion opportunities as managers and R&D personnel. At the same time, managers are encouraged to go to the front line to form a situation where the foreman complements each other.
In addition to introducing R&D personnel from colleges and universities, EAST has also set up customized classes for professional and technical personnel in major colleges and universities. In addition to the courses prescribed by the state, the practical professional courses required by EAST are embedded, and the theoretical and Combined with practice, directional training of talents.

He Simo is full of confidence in the future of EAST: "We have transformed from providing products to providing system solutions, and the next step is to become a supplier of integrated solutions for energy grid systems, based on technological innovation. The world's cutting-edge technology bridgehead."

My Dream of Made in China

CEConline: What do you think of the future of China's manufacturing industry?

He Simo: I think the high-end intelligent equipment manufacturing industry is the backbone of China's economy. As a big manufacturing country, China will lose its foundation if it loses its manufacturing industry. Manufacturing enterprises should, based on the existing industrial characteristics and in accordance with the "Made in China 2025" plan, step by step to achieve the goal of becoming a manufacturing powerhouse. In the face of the "Internet +" boom, while we are thinking about transformation, we also need to have the determination to insist on technological innovation, because the future of China's manufacturing industry lies in insisting on technological innovation.

CEConline: What is your plan for the next ten years?

He Simo: The company will adhere to technology integration innovation and introduction, digestion, absorption and re-innovation, as a starting point to promote technology development, to realize technologies in UPS, energy storage, photovoltaic inverters, smart micro-grids, etc. Innovation, leading the development trend of power supply and new energy industry. At present, the company's development is getting better, and it is in a critical period of rapid development and rapid transformation. I have the determination and responsibility to lead Easter to a higher platform.