"Made in Germany" in China

With the gradual deepening of the localization process of German companies in China, the German manufacturing model and production method have been introduced into China, and it has become the general trend for "Made in Germany" to land in China. As of June 2014, more than 2,500 German companies have invested in China, with an investment amount of nearly 330 billion yuan. Among them, the German auto industry and machinery manufacturing industry account for the highest proportions.

Interactive topic: What can we learn from Made in Germany?

Value chain optimization

The world-renowned Bosch Group for its auto parts business has deep roots in China. After the reform and opening up to the Chinese market, its localization has gradually increased. Dr. Chen Yudong, President of Bosch (China) Investment Co., Ltd., said: "In the past three years, Bosch has invested 10 billion yuan in China. Last year, 80% of the products we produced in China were sold in the domestic market. This year, we estimate this indicator. will reach 90%."

"Auto parts is a globally competitive industry, and China's local value chain exists as a link in the overall layout of the global value chain. Facing the growing cost pressure and the demands of Chinese customers To meet diversified demands, Bosch has been optimizing the value chain through market innovation and cost innovation in China.”

“For example, the common rail system for heavy-duty truck diesel engines, the international service life requirement for high-end products is usually 100 The domestic market has different levels of demand. Some trucks have a design life of 500,000 kilometers and 300,000 kilometers. It is meaningless for the durability of the parts to exceed the durability of the vehicle itself. to reduce the peak performance. Then, through localization, to reduce material costs and manufacturing costs, and strive to provide Chinese OEM customers with the most suitable technology and the best cost-effective products.”

Krones It is a medium-sized enterprise headquartered in Neutraublin, Bavaria, Germany, with an annual revenue of nearly 3 billion euros. The large-scale complete set of filling equipment it produces is specially used for liquid packaging, from drinking water, soft drinks, juice, tea, dairy products, to beer, wine, and liquor, which can be described as "all-inclusive".

"Like the vast majority of German SMEs, Krones chose to keep its production base in Germany, mainly through exporting equipment to meet the needs of many Chinese customers," Krones Machinery (Taicang) Co., Ltd. Claudius Wolf, deputy general manager, explained, “But we also have production facilities in China, mainly developing and manufacturing moulds that can blow moulds that are both beautiful and functional, because of the good design and quality Excellent, many are sold directly to the Asia Pacific and North American markets.”

Innovation in manufacturing mode

German companies have always regarded manufacturing mode and production technology as one of the magic weapons for their global dominance. Actively participate in the trend of technological revolution and management innovation, keep pace with the times and ride the waves.

At the beginning of this century, Bosch updated its manufacturing model and developed the Bosch Production System (BPS). It is the product of Bosch adhering to the German technical tradition, adopting the Toyota production method, and integrating the best practices in the world: first, it carries forward the German technical tradition, pursues quality, attaches great importance to standards, and strictly abides by regulations; then, it absorbs the concept of lean production and replaces it with pull production. Push production, increase flexibility, eliminate waste, and continuously improve; then, the experience gained in the implementation of Bosch factories around the world is continuously introduced into the system to realize circular innovation.

What Chen Yudong is most proud of is that the factory in China has won the Bosch Group Excellent Quality Award for the past three consecutive years. Among them, through real-time monitoring of market feedback, rapid response and continuous improvement, the Hangzhou factory not only increased the durability of a jigsaw sold in Asia by 14%, but also increased the number of defects per million of its motor housing from 2009. 180 was reduced to 0 in 2013.

The tooling guarantee is also an important way to realize the process without distortion and reach the local level of German manufacturing, and it is also the concentrated expression of the combination of soft and hard German manufacturing. According to Chen Yudong, each business department of Bosch will identify key production processes according to certain standards, and stipulate the related processes and production lines. These must be done by the ATMO department of Bosch's internal tooling supplier. ATMO itself does not engage in such as CNC machine tools. However, according to the requirements of internal customers, we will purchase professional equipment or develop special machinery and equipment to complete the design, development and system integration of production lines related to specific production processes. In China, the above work is carried out by two ATMO departments of Bosch located in Suzhou and Changsha.

"And these are absolutely not allowed to be outsourced. First, external suppliers cannot meet Bosch's requirements. Second, more importantly, if you choose to outsource, you need to put the specific process and installation. It is required to tell external suppliers, so that the hard-to-find technical know-how will be leaked." Chen Yudong emphasized.

"I once visited a competitor's factory, and the interesting thing is that their equipment is almost identical to our Suzhou factory. The German machine tool we bought for 2 billion was also bought by the other party. Exactly the same equipment. But they only have hard, not soft, so they can't replicate our production process. Foreigners call this core competence, which is what we Chinese call housekeeping skills."

with Productive services directly related to high-end manufacturing have become an important profit growth point for German companies. Chen Yudong told "CEConline" that he is currently trying to allow the ATMO department to provide some services to the external market, of course, provided that the interests of Bosch cannot be damaged.

The large-scale complete sets of equipment delivered by German companies to customers actually have a considerable proportion of the service part of the contract value included in the price. The filling equipment and assembly lines provided by Krones are dismantled and transported to the customer’s location after the production is completed in Germany. Krones outsources the installation work to a third-party supplier and is only responsible for guidance, while commissioning services with higher technical content and added value are provided. left to myself. "Our service engineers will adjust the technical performance of the entire production line to the best state and ensure its production efficiency in accordance with the commitment to the customer in the contract," Wolf said. The training necessary for mastering advanced equipment is also another revenue growth point for Krones. In addition to customized training, there are as many as 24 modular training programs in China alone.

Localization Management

As early as the beginning of the internationalization journey of German companies in the late 19th century, a decentralized decision-making mechanism was granted to their overseas branches. Now it has become a distinct corporate culture, accompanying German companies to every corner of the world.

From Mongolia and Japan in the north to Indonesia and Australia in the south, the Krones China service team plays an increasingly important role, and its market share increases year by year. Although Krones did not set up the Asia-Pacific regional headquarters for central coordination, the provision of services across markets did not lead to internal channel conflicts. Consensus is formed in the global branch.

Chen Yudong also felt deeply about this: "You may not believe it, but now the Bosch headquarters assesses our KPIs very simply, which are market share, growth rate and profitability. As for what to choose We have a lot of decision-making power to realize the strategy. This has mobilized everyone’s enthusiasm. After research, we believe that the breakthrough is to increase the value contribution rate of each vehicle. In this indicator, Bosch China The gap with the Group’s global level is not small.”

According to the calculation of CEConline and the public data in 2013, Bosch China’s contribution to the value of bicycles is just close to half of its global level. "The gap is not small, in other words, it has great potential", Chen Yudong responded, "The main driving force comes from the consumption upgrade in the Chinese market. For example, the cars that everyone drives now are basically automatic transmissions, from manual transmissions to automatic transmissions. Gear shifting requires new controllers, actuators, and sensors for the gearbox, and the added value goes up at once; in terms of engine control, the value is 1.5 times that of the original by changing from multi-point electronic injection to direct injection. Electronic Stability System (ESP) has been basically popularized in European and American markets, and it is ushering in a big explosion in China, and the loading rate is increasing at an annual rate of 35%.”

"How to implement the strategic breakthrough direction? The key is to combine the advantages of German manufacturing in technology, products, and engineering capabilities, with a deep understanding of the local market, and a flexible and proactive way of doing things. Combining two into one. Our joint venture is the best example. The German company is rigorous and pays attention to norms and processes, while the joint venture has great independence, flexible mechanism and quick response.”

“ Of course, in the final analysis, it still depends on people. We have established a Bosch China training center for employees and an apprentice training center for dual-system students. Only by helping each employee achieve 'lifelong learning' and the concept of 'continuous progress' made in Germany The localization of Bosch in China can only be realized by relying on its talents.”

Krones, which has 12,000 employees worldwide, also attaches great importance to training. "We adopt a tailor-made approach to the training of our employees, not only attaching importance to the training of their professional fields, but also not slackening the training of inter-professional skills. There are more than 450 training topics," Wolf said.

The emphasis on and investment in human resources also pays off. According to data from 2013, in terms of RMB 8.4189 per euro, Bosch and Krones generated an average of RMB 1,378,400 and RMB 1,929,800 in business income per employee globally.

"The service quality of Krones' Chinese engineers has been generally recognized by customers from all over the Asia-Pacific market," Wolf said with great satisfaction, "because foreign customers are willing to accept the services of Chinese engineers once. Leave the follow-up service orders to us. Although Krones also has service engineers in Japan, the high-quality service of the Chinese team has also won the satisfaction and respect of Japanese customers.”

In Bosch, more than two-thirds of the management team are local Chinese employees, of which 85% are local talents at the senior manager level, and more than 60% are at the director level and above. Cultivating and reserving local talents has always been regarded by Bosch as an important strategy to maintain market competitiveness and achieve sustainable development in China.