After experiencing the baptism of the financial crisis, many companies have already polished their eyes, actively adjusted the product structure, focused on research and development of technological innovation, changed business strategies, and segmented markets in order to seek development space in the era of economic recovery. However, there are also cautious product transformation and upgrading, because the mold business as the main body of "processing trade", meager profit and even eclipse, is no stranger to some entrepreneurs, they are constantly changing, from the "running volume" survive.
Yangtze River Delta: Internal Digestion VS Transformation Upgrade
At present, the reduction in cost and profit is a common phenomenon. In Ninghai, at least 50% of mold companies have a raw material cost of more than 10% of the finished product price, and raw material price fluctuations are one of the most “killers” in manufacturing. Another obvious feature is the increase in labor costs and the cost of the product. How do companies face the era of small profits? What needs to be challenged together is the rising cost.
For digesting various cost pressures and making the output value as good as possible, the mold industry expert Luo Baihui believes that internal digestion and transformation and upgrading are two effective methods.
According to Luo Baihui's approach to high corporate digestion costs, there are roughly four methods: one is internal digestion, the other is downward conduction, the third is transformation and upgrading, and the fourth is industrial transfer. However, no matter which method is adopted, because the current macro-control is impossible, the deposit reserve ratio is close to the historical peak of 17.5%, and resource prices and labor prices are on the rise. Therefore, the internal digestion cost is still the most Choose.
The main measures for internal digestion include internal control of potential, improvement of management efficiency, reduction of daily administrative expenses, and refinement of all staff assessments. However, if we look at the problem more realistically, we may find that it is impossible to solve the big problem by internal contraction. For example, the employee's salary can't be overly sloppy, and it is not free to lay off employees. In addition, unless it is a large enterprise, in general, the cost of digesting the enterprise cannot be transferred to the downstream industry or consumers, because once the downstream consumption (production) cost is added, the enterprise will lose the market and cause greater losses.
Luo Baihui pointed out that in the face of the narrowing of profit margins, it is more important to seek new ways through transformation and upgrading, and to make new products with high production technology, added value and profits higher than conventional products. Of course, in theory, shifting industries to areas where labor, land, raw materials and other major production factors are relatively cheap in the period of rising costs is an effective means of digesting costs. However, we must also see that a region with a well-developed infrastructure and a high degree of marketization is relatively low in transaction costs. Therefore, in the face of the arrival of the era of small profits, we must be careful to start a new stove, but should focus on the transformation and upgrading of the industry. It is true that in the process of transformation and upgrading, there will inevitably be a phenomenon of fluctuations in corporate economic growth and even slowing down, which will intensify the situation that enterprises have had difficulties in profitability. However, this kind of "painful" enterprise must be withstood, because the enterprise's effective investment in transformation and upgrading is aimed at seeking more profitable space. Instead of asking for profits on the tiptoe, it is better to strengthen the foundation of the industry to realize the extension of the industrial chain. Promote high-end and enhance competitiveness.
In addition, the government should introduce more active policies at this time, lead and support enterprises to survive the “painful period”, and at the same time increase the reform of major areas and key links such as the marketization of resource elements, and make full use of the market. Forced to provide endogenous power and external thrust for enterprise transformation and upgrading.
Pearl River Delta: Industry Transfer VS Transformation and Upgrade
In the past 30 years, the foundry model of the Pearl River Delta mold company has absorbed hundreds of millions of labors and has become the source of China's rapid economic development. However, in recent years, as China's labor costs have continued to rise, this model has become increasingly weak. A few days ago, Foxconn’s substantial salary increase and the subsequent transfer to the inland provinces announced that the mold manufacturing model was unsustainable in the Pearl River Delta. The "International Hardware Plastics Industry" reporter found in the survey that at present, the private mold enterprises in the Pearl River Delta are at the turning point of development, either industrial transfer or transformation and upgrading. In this process, the foundry management model should also be transformed.
The high labor costs, the appreciation of the renminbi, the foreign trade environment have not yet fully recovered, and the international economic situation is still unclear. The future development of private mold enterprises in the Pearl River Delta is full of variables, and it is far from the Pearl River Delta to become a choice for some enterprises.