Workers monitor factory production at Northeast Industries Group Co., Ltd. in Changchun of Jilin Province in northeast China, on November 28 (LI QING)

After changing a straight production line with five machines into a U-shaped one, instead of five workers, it now only needs three. The new pattern can cut the distance between equipment, cutting the time for carrying components. This is an example of how Northeast Industries Group (NIG), a state-owned enterprise (SOE), is changing its culture and reducing production and management waste.

NIG was established in 1965 in Changchun, Jilin Province of northeast China, as one of the oldest industry enterprises in China. Today, it is a leading company providing automotive parts including vehicle bodies, electronic control systems and transmission systems.

Auto industry changes

Influenced by the global financial crisis of 2008, the auto industry entered a phase of high costs and low sales, Zhang Xianbao, deputy manager of the company, said.

Along with fast-growing labor costs, low efficiency and poor management, this led to problems for the SOE, which decided to switch to high-quality development and lean production.

"Improved management has become the source of higher efficiency in the auto industry, especially for spare parts manufacturers," Zhang said.

Originated by Toyota Motor Corporation, the concept of lean production maximizes output with minimum investment and involves the full participation of company members in continuous innovation. Aimed at improving core competitiveness by eliminating waste and introducing innovation, it is in line with the concepts of introspection, innovation and frugality in traditional Chinese culture.

In 2018, NIG launched a plan of smart production with specific deadlines and four three-year management plans. Following the completion of pragmatic culture promotion in 2010, lean production and personal management were launched during the second stage. By 2017, the construction of a smart plant was expanded to research and development (R&D), procurement and marketing.

In addition to training on theory and practice, programs of quality control, standard production and security are also regularly organized for all employees. People have become willing to apply the advanced knowledge and experience to their daily work. When problems emerge, they can now focus on solutions and further improvement.

The workers who were accustomed to traditional ways of production were trained and have benefited from the optimization. The U-shape production line for example, can save 160,000 yuan ($22,735) per shift every year. At the same time, workers' salaries' went up and the intensity of work was lowered.

There are currently 109 such production lines within the company, enhancing efficiency by 15 percent annually without the introduction of new plants, equipment or workers. The annual output of flywheels, for example, has increased from 1.7 million sets to 8 million sets.

The lean production model was cultivated along with a deepening reform launched in 2004. The first measure was to streamline and get rid of some assets such as hospitals and trade companies. Changes in personal management, the distribution system and development strategy in accordance with the markets were made, which introduced competition and various promotion channels. The reform also included diversified asset management, increased innovation, R&D cooperation and acquisitions, and restructuring of overseas companies.

Since 2014, the time-honored SOE has reinvented itself through high-quality development. The company’s revenue was 8.2 billion yuan ($1.17 billion) in 2018, compared to 500 million yuan ($71 million) in 2014.

Copyedited by Rebeca Toledo

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