XCMG for Your Success! As XCMG is mentioned, the widely known slogan escapes people's lips.
What are the reasons for XCMG's success? "Correct major strategies, a sound value culture and good reservation of talented people ensure continued success of XCMG for years," said Mr. Wang Min, the president of XCMG.
Having accumulated industry experience for 72 years since its foundation in 1943, XCMG, an enterprise developed from an arsenal in liberated area, has become a high and medium-end world brand with the largest scale and the most complete product varieties and series in China's construction machinery industry. Nine types of machinery and three categories of key parts rank the first in aspect of domestic market share while five types of machinery rank the first in China in aspects of export volume and total exports. In addition, XCMG is the first one that breaks through operation revenue of 100 billion Yuan in the industry.
Since 2011, the construction machinery industry suffered a slippery slope. However, as the pacesetter in China's construction machinery industry, XCMG made its way upstream, achieving a double-digit growth in export while the industry's export dropped to a double-digit value. It continued to keep its main business indicators at a top level in the industry and won the Grand Award for Industrial Enterprises of China and the National Quality Award, the top award in industry and quality sector respectively.
When the equipment manufacturing industry is facing enormous difficulties, how does XCMG manage to realize its core competitiveness?
Correct major strategic decision I:
Internet + all-round services, turning transformation into opportunity
As a typical traditional manufacturing company, shall we disregard or face the impact of Internet technology in the current situation? Mr. Wang Min, Chairman of XCMG has a clear understanding: "The current traditional manufacturing and construction machinery industries are faced with critical bottleneck like 'rolling a boulder up a hill and climbing over a ridge'. XCMG's goal is to reach the industry’s 'Top-Everest', which requires us not follow the conservative approaches, but to introduce the Industry 4.0 strategy, ‘Internet +’ mode and other new technologies with reform, innovation, and open mind in the traditional industrial transformation process, and to seize new opportunities of the industrial chain alliance and cooperation, which is a significant opportunity for the integration of global high-quality resources and satisfying customer’s various needs to achieve corner overtaking."
By August 6 of this year, all of XCMG’s construction machinery vehicles had equipped with sensors. Once any failure happens, the fault code would be quickly returned back to the IOT Project Platform of XCMG Schwing Machinery Company located in Xuzhou Economic and Technological Development Zone. When customers called for repair, the platform staff had already completed a comprehensive evaluation on the fault, and began to dispatch the nearest workers to provide service actively.
Fu Simin, Minister Assistant of XCMG Information Management Department, said, “Respond in ten minutes and arrive within two hours. We have been far ahead domestically in explored depth of the big data.” Early in the production and commissioning phases, XCMG has incorporated the equipment into its IOT platform, and established archives thereof. On the project platform, clicking on any vehicle will get comprehensive information about its dealers, vehicle status, rotating speed, running speed, operating conditions, maintenance records and so on; in the same way, all the information about task assignment, workload, service quality, and performance evaluation of any service personnel is readily available. In addition, the platform will even remind customers that the current lifting conditions are not optimal with potential risk.
Fu Simin introduced, “Currently, products from the five divisions of XCMG and machinery manufacturing companies have all achieved the coverage through IOT, we are deploying to construct the global IOT system of the Group and to implement unified terminal, protocol, data center and platform within scopes of the world for the ‘black boxes’ on all of the Group’s construction machinery in the next, so as to realize comprehensive application of IOT technology and big data model analysis technology in the full value chain to boost the company's transformation into a service-oriented manufacturing enterprise.”
With real-time data acquired, XCMG was the first company in the industry that proposed and implemented three “all-round”: all-round customer service, all-round equipment control, and all-round personnel assessment. Under the background of “Internet +”, XCMG has build an ecosystem of construction machinery industry chain based on the breakthrough of IOT, so as to continuously improve the service system, optimize the customer experience and promote customer value quality.
Correct major strategic decision II:
Layout of “the Belt and Road” in advance, promoting international capacity cooperation
As the first construction machinery enterprise going global, XCMG's products have been rooted in the five continents. At present, XCMG has over 110 overseas agents, 260 service outlets and more than 200 spare parts outlets, and has laid out a sound marketing network along the Belt and Road, including subsidiary companies established in Russia, India, Poland and other countries, KD plants in Uzbekistan, Poland, Kazakhstan, Malaysia, the Middle East countries and other countries, and 14 spare parts centers, 18 offices and 357 service outlets and 121 spare parts outlets that provide effective and timely service for local customers.
According to the introduction of Mr. Liu Jiansen, the President Assistant of XCMG and the GM of XCMG Import & Export Company, “Eight of our ten distributors are located along the Belt and Road.” They formed the core and most advantageous market. Over the past 27 years, XCMG’s international export along that route has ranked the first in the exports of China’s construction machinery industry, with 16.17% accounted in the exports of 2014, significantly ahead of domestic counterparts.
XCMG brand has ranked top three of the global industry in the market share of Central Asia, the Middle East, Russia and Australia etc; in Kazakhstan, XCMG’s product market share has reached 80%. In local large-scale construction sites, the dazzling “XCMG gold” can be seen everywhere; lots of XCMG construction equipment also can be seen everywhere on the Qatar World Cup construction site, the mining areas in Laos, the railway construction sites of Indonesia and Uzbekistan, and the Turkmenistan pipeline project site.
To adapt to the user needs and based on the principle of “production localization and marketing localization”, XCMG has developed a large number of new adaptive products through 20 years of effort, including Southeast Asia type products suitable for the hot and humid climate, the Russian low temperature type products suitable for the cold climate, the Middle East type products suitable for the dusty, dry and hot climate. Meanwhile, XCMG has fully improved the noise and vibration performance of the excavator, horizontal directional driller, large loaders, skid steer loaders, road rollers, truck cranes and other products.
Correct major strategic decision III:
Building an interest community with dealers and users
With the development for 70 years, XCMG has not only formed a concept of cooperating as one family, but also created a win-win relationship with the customers, dealers and all the cooperating parties from the strategic perspective, rather than a simple trading relationship.
In 2014, XCMG established the industry's first overseas consultative committee by organizing the world's top ten dealers and built an interest and risk-sharing cooperation chain. XCMG would provide timely support and assistance for the customer with management difficulties; in case of the dealer’s lack of cash flow, XCMG would postpone and extend the credit through Sinosure, to live and grow together with its dealer through credit insurance financing.
XCMG also gave full play to the advantages of dealers’ localization, and jointly carried out activities such as regional exhibition, product promotion, customer activities, global “service system upgrading” and so on. Service activities were mainly for products within the warranty period in the 20 countries along “the Belt and Road”. There were almost 10,000 sets of products, covering cranes, scraper machinery, excavating machinery, concrete machinery, road machinery, trucks, basic machinery, and lorry cranes with a coverage rate of 53.7%.
In Uzbekistan, dealer Babu has regarded himself as a worker of XCMG. As one of the XCMG’s “top ten dealers” for many years, he has not only set up a typical example in aspects of establishment of product sales and spare parts center, but also led to the establishment of XCMG’s excavator plant by using of his own government resources and market relations.
Sound value culture:
Building the brand connotation with respect and trust from the society
For a real brand, it’s more important to win respect and trust from the society besides leading the industry progress and creating values for customers. Born in gunfire of Anti-Japanese War in 1943, XCMG has always been adhering to its core value of “Taking Great Responsibilities, Acting With Great Morals, and Making Great Achievements”, its corporate spirit of being “Rigorous, Practical, Progressive, and Creative” and the long-cherished pursuit of “creating a better tomorrow for the world”. XCMG has put the liabilities and responsibilities of a state-owned enterprise in the first place and is dedicated to building a symbol brand in China’s equipment industry that Chinese people are proud of.
Whenever a natural disaster strikes, from Wenchuan in Sichuan Province to Yushu in Qinghai Province, from Zhouqu in Gansu Province to Fangshan in Beijing, from Ya'an in Sichuan Province to Ludian in Yunnan Province, without instructions, nor mobilizations, XCMG had provided more than 700 sets of equipment worth of 300 million Yuan and dispatched and deployed more than 600 rescue workers. XCMG always services as an equipped branch of the national rescue forces in the first time.
Since 2006, XCMG has donated 12 Hope Primary Schools throughout the country. With annual investment of 200,000 Yuan to fund a range of Spring Bud classes, more than 2,800 children changed their life paths thereof.
So far, XCMG has donated more than 70 million Yuan for all kinds of social welfare contributions. For this reason, XCMG won the “China Charity Award”, and had been awarded twice the “National Labor Award” and the “National Advanced Primary Party Organizations” by the Organization Department of the Central Committee of the CPC, and awarded the Grand Award for Industrial Enterprises of China. It also was awarded as the “National Heroic Collective for Earthquake Relief” by the CPC Central Committee, State Council and Central Military Commission, the only enterprise with this honor in the construction machinery industry.
Although XCMG has become a valuable and creative business model providing the optimal equipment solutions, yet the lack of brand value still reminds XCMG staff of not being complacent. Not long ago, one of the large customers in Qatar bought equipment of more than 300 million from XCMG. The boss talked about neither quality nor the service, but about cutting down the price a little bit. He said, “Compared with Western and Japanese brands, your quality is not weaker than theirs, but your brand still needs to be developed because of disadvantages in the user accumulation and added value of products, including the value of second hand machinery.”
Mr. Wang Min, Chairman of XCMG, has more feelings over this. He said, “We’re still on the way to a world-class brand, especially in aspect of global reputation promotion for the brand.” To create a national proud and global respected world-class company, XCMG is still on the way without any slackness!
