Yuchai quietly finished the 3 years rebuild

 

55 years, what does it mean for Yuchai? From establishment in 1951, it has used 55 years to reach 10 billion Yuan goal.

 

3 years, what does it mean for Yuchai? From 2006 to 2008, Yuchai used the 3 years to develop from 10 billion to 20 billion, rebuilding a new Yuchai.

 

It is close to the end of 2008. Yuchai, one year ahead of schedule, achieved the yearly goal "to make the Yuchai Machinery Co., Ltd. to reach 10 billion Yuan". It is part of the main strategic goal "to rebuild a new Yuchai within 3 years". In the first half of this year, Yuchai achieved the revenue of 12.259 billion Yuan. It is an increasing of 29.46% from the previous year, and 61.259% of the whole target of 20 billion. The Yuchai staff is confident that: under the leadership of Chairman Yan Ping, to meet all the goals by the end of 2008 and accomplish the strategy "to rebuild a new Yuchai".

 

In 2005, when Yan Ping became the Chairman and Party Secretary of Yuchai, the domestic diesel engine industry slowed down. The internal combustion engine industry was in a recession. The situation was worsening and the auto industry slid especially the trucks. The heavy duty trucks and quasi-heavy duty truck market fell by as much as 32%.

 

However, the serious situation highlighted the true characteristic of Yuchai. Facing the big low tide, Yuchai under the new leader Yan Ping created a business miracle. They made enormous achievements through assessing the situation, commencing the integration of business, adjusting the development method, promoting in the independent innovation, as well as adapting the value of green development. In 2005, it earned a total income of 12 billion, an increase of 12.3%. The sales volume reached 267.5 thousand up by 16%. The export reached 17 million, a rise as much as 96%.

 

After the reverse of the downward trend and the completion of the transition, in 2006, Yan Ping promised "to rebuild a new Yuchai", i.e., by the end of 2008, within 3 years, to raise the total profit to 20 billion, the equivalent of rebuilding a new Yuchai.

 

For Yuchai, it was a challenging and passionate 3 years, a "Green development and win-win in harmony" 3 years, as well as an outstanding and enlightening 3 years for future development. Besides, the rebuild means not only in quantity, but also in quality. In fact, while it made great success in the market expansion, sales growth, it also worked out a full set of sustainable development corporate concepts in terms of corporate structure, mechanism, management, research and development, investment and financing, and corporate culture.

 

In the past 3 years, Yuchai keeps a low profile so the outsider knows not much about what happened in Yuchai. The low profile is nothing else but the maturity of Yuchai. The 3 years' rebuilding is the reshape of the maturity. It incorporates the passion, responsibilities, confidence into building the spirit of harmony, reaching a new height of China's manufacturing.

 

Deepen the reform and optimize the system

 

After became the leader of Yuchai, Yan Ping was puzzled  by a new question. The output was increasing, but the unit cost of the engine was growing year by year. It is in conflict with the principle of manufacture industry that  a product is making profit and its scale is increasing the cost should be lowered. Should there be any problem in the system?

 

He started the reform in the fields of labor, human resource and distribution, and further clarified the property rights relations. He led the group into the regulated operation, by restructuring of the relationship between the headquarters and the branches and setting up a series of regulation and rules to complete the planning and construction of the modern enterprise system. In the laboring and employment system, he standardized labor contract system.  In the human renounces, he relocated the position and factions, reduced the management level and promoted new managers by open completion. In the distribution system, he linked the remuneration system with the responsibility, efficiency, performance and contribution of the job.

 

The enforcement of these systems put up a frame work for the corporate party building system, optimized the resources, and standardized the branches' applications and approval in regard to large contracts, large investments, important decisions and the changes of position. While establishing a complete internal regulation for the Group, Yan Ping concentrated to the indicator for the system and appraisal methods, especially the appraisal of the executives, allowing the leaders of subsidiary companies earn more than the high executives in the Group.

 

The Dynamic mechanism has significantly promoted the staff's enthusiasm and creativity, injected the huge energy and passion for the development of Yuchai.

 

Moreover, Yan Ping started the appointing system that is to appoint accountant chiefs to the wholly-owned, holding subsidiaries, or companies with over 40% shares, so as to deepen and streamline the finance of the Group, and ultimately to further ensure the integrity and complete finance information of the Group.

 

The company deepened the reform and optimizes the system to resolve the problem in internal management and formed an exchange and high-effective cooperation system. The internal financial platform, information platform, the competition platform played a more and more important role in the resources integration. The pragmatic, reality-based maturity became a stable, safe assurance for the sustainable development and growth, as well as the leading position in the industry.

 

Details-focused management and responsibilities sharing

 

A mature enterprise features in the characteristics, such as reality based, reserved attitude, etc.., It can avoid the waste and unrealistic target. The characteristic of Yuchai shows more evidence in the details focused management and responsibilities sharing.

 

After the engine industry of China entered into the low-profit era, Yuchai set up a comprehensive budget management system for the efficiency and cost-saving. The Head of Budget Department of the Yuchai Machinery Co., Ltd Wang Wei told that: the cost control is only one section of the comprehensive budge management.Its main function is to serve as a database center, and to control and follow the trend of the company as well as track and analyze the marketing and management. It can detect the abnormality in time and provide the valuable analysis for the decision maker.

 

In 2006, Yan Ping personally took in charge of the establishment of Yuchai Cost Center, along with cost-cutting appraisal platform and monitoring procedures. He required the secretary of the board of directors to monitor and appraise the major indicators of every high level executive allocated to the Yuchai Machinery Co., Ltd. and manage the budget system details. In 2006, Yuchai saved as much as 100 million; in 2007. It cut the cost up to 239 million.

 

In order to meet the serious market competition, and build the healthy efficient enterprise, Yuchai introduced the interim accountability system for high level executives of Yuchai Group, for the need of intensifying the executives' responsibility. It has trimmed the bad management style.

 

International vision and independent innovation

 

Yan Ping indicated that a company rely to others can not grow up for ever.

 

Yuchai is the only domestic internal combustion engine enterprise that has no OEM to rely on. If Yuchai wants to survive and grow, it has to do better than the competitors that forces Yuchai to pay much attention to the independent innovations.

 

For years, Yuchai is the leader of independent innovation in the industry. In 2006, it launched the 1 ^st home-made State IV diesel engine. It is 5 years ahead of the implementation of the Station IV standard. In the meantime, it developed the 1 ^st home-made State IV CNG gas engine. It also developed the first home-made, smallest engine of 1.2, 1.3 liter for home-made sedans that filled the gap of the national manufacturing industry.

 

In July 2007, Yuchai Engineering Research Institute was founded. During the past one year, YC6A, YC6J and YC6G diesel engines were awarded the export verification exemption certificate issued by the General Administration of Quality Supervision. It also successfully developed the first State V diesel engine YC6L-50 in China, the urban passenger hybrid power (ISG Technology), the successful registration of the Bi series brand marks of Yuchai's high end brand, etc?

 

Independent innovation is the driving force of Yuchai's continual advancement and the key element to the building of harmonious spirit for the internalization. The foundation of the institute symbolized a landmark in the development of Yuchai. It proudly shows that Yuchai will depend on its own strength to shoulder the revitalization of the China's manufacturing industry and explore a way to internationalization.

 

Up to now, the business of Yuchai has extended to Asia, Europe and the United States, Africa and Oceania.  It has set up over 30 overseas offices, 40 subsidiaries, more than 1000 distribution centers and franchised shops, and over 2000 terminal service net stations. In 2007, Yuchai exported more than 29,000 products, and registered the Yuchai brand in more than 50 countries. The target for export in 2008 is 50 thousand, 20 thousand more than last year, exceeding 10% of the total export volume.

 

On Jan 20, 2008, Yuchai held the annual conference for sales marketing service in Changsha. During the conference Yuchai proposed th the internationalization theme and goal of "excellent quality and a globalized Yuchai". The internationalization strategy does not only aiming at the global market expansion and promotion in exportation, but also at comprehensive internationalizing operation in the manufacturing distribution, capital operation, management innovation, R&D, human renounces training.

 

The strategy of internationalization represents Yuchai's pursuit of a globalized corporation from a regional enterprise. It demonstrates the forward-looking vision of the leaders such as Yan Ping, and fully shows the characteristic of Yuchais leading position in the innovative engine industry.

 

Green development and win-win in harmony

A good company should be a responsible enterprise.

 

Yan Ping stated that: Yuchai Group, as a well known large-size manufacturer, pay great attention to faithful honoring the social responsibilities and being an honest enterprise.

 

The core value of Yuchai evolved from the original internal-oriented "human is the principal and always try to be the best", into the "Green development, win-win in harmony". It was raised in 2006. It incorporates the social responsibilities into the responsibilities of the company and adjusts the relationship with suppliers and buyers into strategic partnership, as well as combines the healthy development with the harmony and progress of the whole society. Since then, the corporate culture promotes the image of the company up to a new level.

 

In 2007, the Euro-IV products of Yuchai won the public transportation bid in Beijing, Hangzhou and Shenzhen of more than 2,000 Euro-IV engines. It made Yuchai the only home supplier of the Euro-IV engines.

 

In Yuchai, "Green development and win-win in harmony" is a well-known value for all staff. Its basic components are to: promote sustainable economy; realize optimized harmonious environment; build a win-win "green industry chain" among Yuchai and clients, governments, society by integrating technology and innovation, and integrating resources, building up new engine-driven industrial clusters.

 

The humanistic concern shows a mature enterprise and its spirit building. "Green development and win-win in harmony" represents the highest level of humanistic concern value. If Yuchai only concentrates poses on output, quality, profit, machines, but lacks the spirit and culture, it certainly would loss the charm, beauty, cohesion, influence.

 

The "Green development andwin-win in harmony" represents the goal of business of Yuchai. It illustrates the characteristic of Yuchai and its accountability of social responsibilities and colorful culture.

 

Source: Economic daily