Xichai Builds Advantage Supply Chain Writes New Chapter of Development

In 2015, facing the unfavorable environment of the slowdown in domestic economic growth and the decline of the commercial vehicle market, the strong internal system of FAW Xichai was able to increase its capabilities and expand its market share in external markets, achieving steady development in the face of adversity. The market share of heavy-duty engines above 350 hp ranks first in the industry; Aowei 11-litre won the championship in market sales for 3 consecutive years; and it became the only company in the commercial vehicle and internal combustion engine company that won the 2015 “National Quality Award” .

Procurement Conference
Procurement Conference

In the downturn of the commercial vehicle industry and the general decline in the sales of internal combustion engine companies, why is Xichai still able to produce such a satisfactory report card? With curiosity, the author participated in the 2016 purchase held in Xichai on December 17th. Work conferences, sneak peeks, explore mysteries.

System construction builds a strong supply chain

In the finer and more specialized manufacturing industry, Xichai should become a leading and internationally renowned high-end brand supplier in China and must have a first-class component supplier system to guarantee it.

In terms of supplier selection, Xichai has always adhered to the two best-preferred principles, namely, optimizing domestic first-rate suppliers and optimizing international suppliers. Under the background of global procurement, Xichai has established cooperation with world-class suppliers such as German BOSCH, MAHLE, US FMO, and Austria MIBA to establish an international procurement platform. In terms of domestic supplier selection, Zhejiang Silver Wheel and Wuxi Weifu are selected. And other domestic first-class enterprises, to achieve a strong alliance to ensure product quality. At the same time, the establishment of a core supplier evaluation system will give a certain degree of policy tilt to the supplier group entering the core management in terms of supply ratio, etc., to achieve a win-win situation. At this year's procurement meeting, three companies such as Continental Automotive (Changchun) Co., Ltd. have passed the audit and certification of another batch of Xichai. So far, the total number of core suppliers of Xichai has reached 58. The total supply of these core suppliers accounted for The ratio has reached more than 60%, providing a solid guarantee for the improvement of the quality of xichai wood.

Strong capacity needs management follow-up. In the procurement system construction, Xichai has continuously improved and innovated procurement management and strictly implemented four synchronizations, namely the simultaneous development of new products, simultaneous technological transformation, simultaneous improvement of quality, and simultaneous improvement of management. Signed a letter of commitment with the relevant suppliers and asked the suppliers to adhere to the principle of “five not misses” in terms of quality improvement, namely: “The reasons are not checked, the measures are not clear, and the corrections are not implemented. However, if the effect is not achieved, it will not be ignored and the treatment will not be taken seriously."

Through all-round system construction, Xichai has built a strong supply chain and adapted to the rapidly changing market environment.

Process Control Casts Quality "Oscar"

In order to effectively prevent the occurrence of quality problems, Xican strengthens control and adds double insurance to product quality.

The first insurance is source control to improve the quality of new product purchases. Xichai sets up a project team for procurement parts, closely follows the three sources of planning, design and technology, fully intervenes in the preliminary development work, strengthens design, process development and quality assessment, rationally allocates plans and technical forces, and ensures compliance issues before batch production Zeroing, the approval pass rate reaches 100%.

The second insurance is process control, in-depth development of reliability engineering and fine engineering, and efforts to improve the compliance and reliability of the purchased parts. For reliability engineering, Xichai organizes joint service and visits. The supplier and Xichai jointly implement service station monitoring. Strictly implement the 12MIS index and supply-linked system, monthly monitoring, quarterly adjustments. Together with suppliers, we continued to deepen our difficulties and tackled all aspects of design, manufacturing, and service. For the refinement project, Xichai strives to improve the compliance rate of the purchased parts of the fuel-lubricated system. Through negotiation and site review methods, it starts with equipment configuration, cleaning process research, inspection methods, benchmarking, and logistics improvement to improve supply. Commercial cleanliness control level.

The double insurance guarantees the quality of Xichai effectively. The 12 MIS claiming rate for thousands of vehicles from Xichai has reached the industry level and even the world-class level. There emerged a large number of 2 million kilometers of overhauled tinkers such as Xinjiang Hotan Shuntong Transportation Company.

Survival of the fittest competition openness and fairness

Market competition, survival of the fittest. According to the supplier performance evaluation management regulations, Xichai has strengthened the integration of suppliers based on the principle of fairness, fairness and openness. By optimizing the batch, eliminating one batch and two-way flow, the competitiveness and cohesion of the Xichai supply system will continue to increase.

At the procurement conference site, 26 suppliers including Bosch Automotive Diesel Systems Co., Ltd., and Zhejiang Yinlun Machinery Co., Ltd. won the honors of the best suppliers, outstanding suppliers, quality research excellence awards, simultaneous development excellence awards, and quality excellence awards. . After they learned of the award, they were full of joy. Xu Xiaomin, chairman of Zhejiang Yinlun Machinery Co., Ltd., reviewed the course of the 23-year silver wheel company's relationship with Xichai and the silver wheel's continuous development and growth with the help of Xichai. He believes that as long as the suppliers are in line with Xichai, The alliance will surely achieve the same win and achieve scientific development. While recognizing advanced technology, 10 suppliers were not able to meet Xicai's requirements for supply quality and delivery speed. They were canceled by Xichai as supplier qualifications and withdrew from the supplier's sequence. The rewards and penalties, the measures for survival of the fittest, motivated suppliers to develop excellent product quality, efficient simultaneous development, excellent product delivery, perfect after-sales service, and innovative cost improvement. Together with Xichai, they share the same pains and efforts to resolve the crisis. Seize opportunities and challenge the market.

2016 supplier quality contract signing
2016 supplier quality contract signing

Strategic linkage to create a new chapter in development

2016 is the beginning of the “Thirteenth Five-Year Plan”. Standing at a new starting point, Xie Diesel Director Qian Hengrong proposed to the suppliers the requirement of “Striving to work together to win together and create a new chapter in the 13th Five-Year Plan,” calling for Xichai's supply chain to focus on and transform. cohesion.

Qian Hengrong believes that during the “Thirteenth Five-Year Plan” period, companies must focus on strengthening brands, leading technology and product integration. The “Thirteenth Five-Year Plan” will enter the era of brand competition. Enterprises will not only provide products for users, but also must achieve the ultimate in products and exceed user expectations. Suppliers must lead in their own fields and engines. They must have a certain reputation or core competitiveness. The development of parts and components must be ahead of the engine, and the research and development of suppliers must drive Xichai's R&D. When it comes to product integration, Qian Hengrong believes that at present, there are too many parts for domestic engines, and the varieties will be further reduced in the future. From a lean design perspective, modular supply is the main trend.

Qian Hengrong called on the vast number of suppliers to work together to share resources and apply the latest products and advanced technologies to the engine; to achieve joint investment, and to make the failure rate of xichai products even more during the “13th Five-Year Plan” period. With a drop of 50%, 12MIS is controlled below 200, reaching the international leading level; it is to share responsibility, speed up the handling of market quality problems, strengthen the service network layout, and increase after-sales service capabilities. To achieve shared development, through the joint efforts of Xichai and suppliers, continue to enlarge the market cake.

Whoever has a strong supply chain and masters quality resources will have a dominant market position. Create new advantages in procurement and write a new chapter in cooperation. Xichai and the vast number of suppliers are actively practicing and striding forward.

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