Xichai adjusted procurement system to boost development

In the past year, the commercial vehicle market in China, especially the truck market, experienced a downturn. In 2012, the market competition will become more intense. In view of this, commercial vehicle companies can only make efforts in reducing product prices, improving product quality, and developing more energy-saving and emission-reducing products, and are expected to stand out in the future market competition.

The engine is the heart of the car. To allow commercial vehicle companies to launch products that are more suited to market needs, a group of diesel engine companies have improved their technology, promoted research and development, and reduced product prices in order to provide customers with better products. At the beginning of the new year, a group of excellent engine companies, such as Weichai, Xichai, and Shangchai, have made great efforts in the enterprise procurement system, trying to start with the primary parts of the car, improve product quality and product reliability, and reduce product prices.

● Strictly control the quality of procurement

Each company has its own procurement system. This system generally includes a strict evaluation system and optimization mechanism for suppliers.

Xia Yulin, Minister of Purchasing Department of FAW Xichai, said that in the xichai procurement system, there are strict evaluation mechanisms for suppliers, including the mechanism for suppliers to enter the xichai procurement system and the later optimization mechanism. For companies entering the Xichai procurement system, three evaluations (performance evaluation, capability evaluation, core supplier evaluation) will be carried out to ensure the supply chain's capabilities through the core suppliers.

Xichai also subdivides its suppliers into three types according to the degree of importance and degree of risk, including leveraged, strategic, and strategic types. It divides suppliers into four categories: general, priority, cooperation, and strategy. After the combination of the two, the Different suppliers adopt different training strategies. In terms of operational mechanism, Xichai's supplier operation mechanism mainly includes the performance promotion mechanism, the joint development mechanism of suppliers, and the cultivation mechanism of core suppliers. Through a series of mechanisms, the suppliers entering the Xichai procurement system are prioritized.

It is reported that due to the establishment of a strict procurement system, all parts suppliers who have entered the Xichai procurement system have basically reached the international advanced level, and in the country can meet almost all diesel engine manufacturers supporting system. At present, there are many home engine OEMs that have such a strict supporting system.

● Optimize supporting system for development

For OEMs, the only entry mechanism, lack of elimination mechanism, is still not conducive to the development of enterprises. Therefore, many manufacturers have implemented a post-optimization mechanism to eliminate a batch of unqualified companies in due course. The elimination mechanism can give suppliers pressure to encourage them to improve their technological level and reduce production costs.

A person in charge of a domestic diesel engine company stated that those companies that are still unable to adapt to the requirements of OEMs but are not able to meet the requirements of OEMs, have unstable quality, have inaccurate delivery, have poor anti-risk capabilities, and have financial indicators evaluated at the end, and the quality of products that cannot be improved in 1-2 years can be improved. It will be eliminated and there will be an optimization mechanism in the later period. At present, the diesel engine company has to eliminate 6-8 suppliers each year.

The establishment of a phase-out mechanism will also serve to reduce the cost of production for some OEMs. According to Xia Yulin's introduction, after the elimination mechanism was established, the purchase cost of Xichai was probably reduced by more than 20% compared with before, which absorbed the pressure of rising raw material costs of the company.

● Collaborative development to enhance the industrial chain

Recently, at the Davos Forum in winter, a person in charge of an overseas commercial vehicle company said in an interview that in 2012, the competition in the commercial vehicle market has become more intense, and commercial vehicle companies should provide customers with better products and collaborative supply. Business joint research and development in the first place. He said: "In the process of establishing the entire industry chain, the breakdown of any type of parts and components may affect the upgrading of the company's products, and even affect the survival and development of the company."

The quality of parts and components is undoubtedly important for the vehicle and the host. For a long time, the Chinese automobile industry has focused on vehicle development, and the development of parts and components has often been overlooked. According to some OEMs, sometimes new products have been developed, but it is regrettable that they are unable to complete the development and listing of new products due to the constraints of suppliers' processes. Recently, regardless of the national level, vehicles, and OEMs, the importance of parts and components companies has been widely recognized. A number of diesel engine companies, such as Xichai, Dachai, and Shangchai, have begun to join hands with their strategic partners to jointly develop new products.

According to Xia Yulin, Xichai encourages suppliers to enter the high-end market. In the joint development with Xichai in recent years, there are 7-8 suppliers from low-end to high-end. It is reported that in the past, the piston ring factory in China was large in scale but its technology was not very advanced. In the process of following up with the OEM, it gradually caught up with the trend of world development. In the original development of supercharged engines, many suppliers failed to meet the requirements of the Pistons. In the process of cooperating with the OEM, Pistons gradually mastered this process and reduced costs for the OEMs.

Cai Zhenfa, Secretary of the Party Committee of FAW Xichai, said when talking about suppliers’ contributions, “The development of Xichai is inseparable from the support of the vast number of suppliers. Over the past year, Xichai and the majority of suppliers have considered quality as the life of the company. In addition, we will continue to promote zero-kilometer failures, strengthen quality control, strictly control the quality of parts and components, and conscientiously carry out quality research; accelerate the development of production lines for procurement parts, strengthen quality negotiations, improve management, and strengthen the use of these measures. Machine quality is effectively guaranteed and supported by the system."