China Textile: Traditional industries are upgraded to survive the winter without cutting labor costs
“We still have nearly 100 vacancies for sewing workers, but we can’t recruit anyone. We don’t know where the workers have gone.” Cheng Liang, secretary of the party branch of Shanghai Jialinjie Textile Co., Ltd., participated in employee recruitment some time ago. He was very happy Confusion: If there are a large number of laid-off employees in the market due to the economic crisis, then there should actually be a flood of similar demands. But the fact is that the company’s employee requirement was 100, but only 28 were recruited.
In Jinshan District, Shanghai, where Jialinjie is located, companies that have bucked the economic crisis and hired more employees are not alone. A “Sampling Survey and Analysis Report on the Labor and Employment Situation of Private Enterprises” provided by the Jinshan District Federation of Industry and Commerce shows that Shanghai Mozhihua, Shanghai Huakun and other companies added new positions in 2019, with many companies adding more than 400 positions.
In addition, among the hundreds of companies surveyed, the proportion of “no layoffs, no salary arrears, no salary cuts, and no reduction in benefits” is much higher than the rate of reducing costs through human resource adjustments. of enterprises.
These enterprises are located in textile and clothing, luggage, electromechanical manufacturing, machinery manufacturing and other industries. They all belong to traditional industries. During the economic downturn, most of them are in the “hardest hit areas”. Generally speaking, companies in the “hardest-hit areas” are often the “hardest-hit areas” where human resources adjustments occur.
Why are these companies able to achieve the “four no’s”? Differentiated positioning, increased R&D investment, and timely adjustment of the ratio of domestic and external market orders…Before the crisis and during the crisis, these enterprises in traditional industries were actually no longer the ones in the value chain that people thought they were. low value-added companies, they have already taken the initiative through their own adjustments.
Winter is coming
In the middle of last year, when the financial statements were placed on Gao Hualin’s desk, he suddenly felt chilled. The depreciation of the U.S. dollar, rising raw material prices, rising labor costs, and various factors led to a sharp decline in profits, which was almost the first in 15 years. Second-rate.
As the chairman of Shanghai Jiale, Gao Hualin positions this company that connects the upstream and downstream knitting industry chain to focus on export sales in the Japanese market. In August last year, the export tax rebate policy was adjusted, and Jiale made a comeback. The final annual sales were 754 million yuan, and profits remained at the same level as the same period last year.
But the good times did not last long. As the financial crisis intensified, the Japanese consumer market continued to be sluggish and order volume plummeted. “Now is the real cold winter.”
Jia Linjie was also feeling the chill. , more than 90% of this company’s products are exported, a considerable part of which are sold to the European and American markets, and some orders have dropped sharply.
Lu Zhengfu, chairman of Shanghai Jesse Shirt Co., Ltd., has also experienced a test. The Japanese market, which has always had strong demand for shirts, has seen orders gradually decrease. According to Lu Zhengfu’s statistics, before the crisis, the annual output was about to 3 million pieces, while after the crisis, production dropped by one-third.
While the textile and apparel industry felt the harshness of winter early, the good days of Tano Seiko Group in the mechanical forging industry lasted until October last year.
“Until July and August last year, we didn’t feel anything.” Vice President Chen Yuxing said. By November last year, Tianye’s forging shipments suddenly dropped, falling to 800,000 pieces in December. In the past, monthly shipments were almost stable at 1.5 million pieces. By January 2019, the number was already 500,000 pieces. .
Internal improvements
Tian Tian was not caught off guard by the sharp drop in product sales. “There are two cold waves of sharp decline in sales, one is the domestic market, and the other is the export market.” Chen Yuxing, who is in charge of finance, calmly analyzed that for Ye Ye, domestic sales account for 41% of the total sales, among which the demand for tools in the northern market during the Spring Festival The volume is not large, which is the main reason for the decrease in sales. Analysis shows that the sales of Ye Ye in the Middle East market, the main position of the export market, did not decrease significantly.
But this does not mean to sit back and do nothing. “On the one hand, we have controlled new investments, on the other hand, we have strengthened the research and development and production of new products, while constantly improving the process.”
Under the leadership of a process improvement team, any link that may bring cost savings is taken seriously. “If the cost of a wrench is saved by 2 cents, then at least 200,000 to 300,000 can be saved a year. The cost is 10,000 yuan.”
“We hope to reduce the overall cost of the supply chain.” said Xiang Yiyuan, head of Shanghai Jialinjie Management Headquarters. In fact, since its establishment in 2001, this company has begun to lean, automate and informatize the entire production process, share information with upstream and downstream companies, make sales forecasts, reduce inventory, and ultimately reduce overall business costs.
Although these companies all belong to traditional industries, the sense of crisis has long made them no longer satisfied with obtaining profits from ordinary production, manufacturing and sales.
“800 million shirts can be exchanged for a Boeing.” Lu Zhengfu still remembers the words of former Minister of Commerce Bo Xilai. In his view, becoming a low-end manufacturer in the supply chain will SeveralThere is almost no way out.
“We are the only shirt manufacturer in China with patented technology in the field of nano cotton non-iron.” Lu Zhengfu is quite proud of this. This gives him pricing power and is no longer at the mercy of his customers.
But Jia Linjie was prepared earlier. As early as 2004, Jialinjie decided to abandon the production of mid-to-low-end products and focus on high-end products to form a differentiated positioning. In addition to independently developing patented products, Jialinjie also obtains production technology through cooperation with foreign companies.
Shanghai Jiale has always regarded research and development as an important link, investing more than 40 million yuan in research and development every year. In last year alone, Shanghai Jiale had 6 new fabric products that obtained national patents.
Enterprises practice their internal skills and move from the “end” of the value chain to the front end of the value chain, and finally gain competitive strength.
Finding new markets
In fact, as early as 3 years ago, Jesse shirts had already begun to develop the domestic market. Lu Zhengfu did not dare to slack off because of his strong sense of crisis. In addition to supplying more than 2 million shirts to the Japanese market every year, Jesse also uses its production technology patents to become a supplier of Goldlion, producing 300,000 shirts for domestic sales every year. “Export sales support workers, and domestic sales are profitable.” Lu Zhengfu said, “We are now looking for new market growth points and striving to open up the European and American markets.”
In May last year, Jiale opened a new factory in Anhui, mainly producing knitted underwear mainly for domestic sales. This is just one of Gao Hualin’s moves to target the domestic demand market. Soon after, Jiale won the qualification as a licensed manufacturer for the 2010 World Expo.
At a meeting last year, Gao Hualin accidentally had a conversation with a man next to him, which brought him new opportunities. This man is Zhou Chengjian, chairman of the board of directors of Metersbonwe Group. After a conversation, Gao Hualin and Zhou Chengjian felt like they had met at a late date.
On April 10, Zhou Chengjian met with Gao Hualin again and brokered a new cooperation. Gao Hualin revealed that Jiale will use about 30% of its production capacity to cooperate with Metersbonwe, and exports will be reduced to 50% to 60% of the total output, which will greatly reduce the company’s operational risks.
What Field Tools does is to develop new business models. It was also by chance that a foreign trade company in the same town approached Tianye Company and hoped that Tianye would process horseshoes for games for them, with a monthly order of 600,000 pieces. “We are both producing forgings, and there is no difference in the process flow.” Such orders make Chen Yuxing very excited. Such orders are relatively stable and do not increase production costs, so they are precious in times of crisis.
“Four No’s” to ensure sustainable development
“Skilled workers who can adapt to standardized management are not easy to recruit.” Cheng Liang said. From employee recruitment to training, it is a big expense for the company, and whether it can retain employees well is also related to the overall human resource cost savings.
Therefore, although the market is in a downturn, for long-term strategic considerations, companies are not willing to rashly lay off employees and cut wages to tide over the difficulties.
“Stability control of employees is mainly about cultivating business quality.” At the beginning of this year, Ye Ye Group was under-operated, “but we still provide employees with normal wages and no layoffs or salary reductions.” Since then Since then, Tianye Group has conducted business training for employees once a week, allowing employees to seize the time to recharge and learn when their work is not full. The content extensively covers cost control and process adjustment.
In Chen Yuxing’s view, this is closely related to the company’s winter strategy of saving costs and improving efficiency. Although the company has paid a lot of training and retention costs for these employees in the short term, in the long term, Employees will help the company tide over difficulties through work performance and help the company achieve sustainable development.
“Faced with difficulties, employees have heard and witnessed it, and they are deeply afraid that salary cuts and layoffs will befall them, and their hearts are floating.” Gao Hualin said that it is necessary to stabilize employees’ emotions and stimulate their creative vitality and enthusiasm for work. , “We will not cut salaries or lay off employees, but will increase the salaries of front-line employees.” At Jiale Company, senior managers will reduce their salaries appropriately, while the salary increase of front-line employees will reach 5% to 10%.
“Employees have very real ideas. They know very well how much money they get every month. If they have received high salaries and suddenly their salaries are reduced, these employees will definitely have emotions. This is human nature.” Lu Zheng Fu said.
In the garment industry, the average salary is 18,000 yuan per year. Jesse offered a “high price” with an average salary of 32,000 yuan for ordinary employees. “I believe that in this industry, Jesse’s salary should be one of the highest.” One.” Lu Zhengfu is very confident in this, “The employees also have a sense of ownership.”
“Let workers live so that entrepreneurs can survive and enterprises can survive.” Lu Zhengfu said.
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