XCMG has achieved a revenue of over 100 billion yuan for three consecutive years

The target was successfully completed and the total investment of key projects exceeded the target

From the perspective of the pilot goals for the integration of the two industries, XCMG Machinery has accomplished them relatively smoothly. First of all, the proportion of modern service industry revenue in total revenue has remained above 30% for three consecutive years. The revenue from value-added services of products increased from 29.14 billion yuan in 2019 to 39.04 billion yuan in 2022. The company added 9.9 billion yuan in revenue from service-oriented manufacturing. The revenue from manufacturing services accounted for 41.6% of the total revenue. At the same time, the brand influence and reputation of the enterprise have been significantly enhanced.

Through the development of service-oriented manufacturing business, more than 5,000 new jobs have been created for the upstream and downstream of the construction machinery industry chain, effectively upgrading the industrial structure level, strengthening the construction of industrial supporting capacity, and also enhancing the regional radiation capacity.

The plan for applying for a national-level pilot unit includes six key projects, with a proposed total investment of 1,450.6 million yuan at the time of application. Over the past three years, the company has adhered to the principle of seeking truth from facts. For the XCMG Zhilian Smart Logistics Park project, which could not be resolved due to site selection issues, it utilized social resources to solve the storage problem and cancelled the project. Instead, based on market conditions, it added new projects such as industrial Internet improvement and intelligent factory construction for high-end lifting equipment. Including the originally planned five construction projects, namely the national-level industrial design center, the State Key Laboratory of intelligent Manufacturing for high-end Equipment, the national-level industrial Internet research and development center, the global e-commerce platform, and the after-market service spare parts system, the total actual investment completed was 21,01.36 million yuan.

The pilot project summarizes seven major experiences and practices

During the three-year pilot work, XCMG Machinery has strengthened and expanded modern service industries in key areas such as technological research and development, modern supply chain, intelligent manufacturing, Internet platforms, financial services, e-commerce and after-market services in the upstream and downstream of the construction machinery manufacturing industry chain. This has not only effectively shortened the product service cycle, reduced manufacturing costs, improved work efficiency and increased product added value, It has promoted the in-depth integration of the two industries and successfully completed the national-level pilot tasks for the integration of the two industries, summarizing seven major experiences and practices.

(1) High-tech R&D services

XCMG continuously invests more than 4% of its annual sales revenue in R&D activities, mainly for the research of key core technologies and the construction of major experimental equipment and facilities, to ensure the continuous development of innovative R&D work. Through technological research and standard construction, XCMG Research Institute actively participates in the formulation of domestic, international and industry standards, as well as the establishment of relevant standards committees, continuously enhancing its technological research and development service capabilities and levels, laying a scientific and technological research and development foundation for XCMG construction Machinery to maintain its position among the top three in the world construction machinery industry.

(II) Modern Supply Chain

Drive the transformation of the supply chain system with a process-oriented and digitalized mindset, and build a transparent, efficient, and value-added supply chain. The company has completed the construction of the "Smart +" series of supply chain information platforms, facilitating XCMG's digital transformation and upgrading. The "Zhi +" series of supply chain information platforms consist of XCMG's Global Digital Supply Chain Platform (X-DSC), Smart Logistics Information Platform (ITMS), and supply chain Big Data platform. Empowered by the application of new technologies such as industrial big data, artificial intelligence, and industrial Internet, it strengthens lean management and data penetration. Constantly enhance the digitalization and intelligence levels of supply chain links such as procurement and logistics, as well as the efficiency and collaboration of the supply chain, promote the transformation of the supply chain system, and build a transparent, efficient and collaborative "digital link", thereby driving the digital transformation and upgrading of upstream and downstream enterprises in the supply chain.

(3) Intelligent Manufacturing

As a manufacturing enterprise, XCMG promotes its transformation through intelligent manufacturing. Based on its core processes and advanced manufacturing accumulated over many years, it has achieved the integration of advanced manufacturing and new-generation information technology along the path of automation, digitalization and intelligence. It has explored the framework and implementation path of intelligent manufacturing and formed its own intelligent manufacturing path suitable for XCMG. So far, we have completed the construction and certification of 5 smart factories and 26 smart workshops. We are the first in the industry to pass the CMMI4 (Software Capability Maturity Model Integration) certification, and more than ten have passed the CMMI3 certification. We have also been selected as a "Smart Manufacturing Pilot Demonstration Factory Challenge Unit". Among them, there are 44 application scenarios such as flexible configuration of production lines, dynamic organization of resources, and dynamic optimization of process parameters It has been promoted to the entire industry by the Ministry of Industry and Information Technology as an "outstanding scenario of intelligent manufacturing".

In terms of digital construction, the numerical control rate of key processes is 100%, and all equipment is fully networked. It is compatible with multiple mainstream industrial protocols and widely uses new network technologies such as 5G to achieve the interconnection and intercommunication of production factors.

(4) Industrial Internet or big data services

Through continuous exploration and improvement, XCMG Han Yun has integrated production and manufacturing with services, forming a new industrial form. This is also a new business model and production organization model. XCMG Han Yun, based on the full participation of customers, through "product + service" innovation and the mutual integration of knowledge capital, human capital and industrial capital, as well as the integration of manufacturing network resources, ultimately achieves the joint value creation of customers and the enterprise, thereby realizing new industrial models such as economies of scale and risk avoidance.

The Hanyun system includes subsystems such as the Hanyun Device Profiling APP, Hanyun Intelligent Network Connection APP, Hanyun SCADA (Data Acquisition and Analysis System), Hanyun MOM, Hanyun Cloud MES, and Hanyun Cloud Spare Parts. It involves 30 hardware inventions and 60 embedded software Copyrights, with strong market competitiveness. The total shipment volume of self-developed key hardware is approximately 1 million units.

(V) Financial Services

Since 2020, XCMG Finance has continuously increased its financial support for the development of its core business. Through the implementation of full industrial chain financial services, it has been constantly strengthening the construction and support of the upstream and downstream "allied forces" ecosystem centered on XCMG.

The main experience and practices are, first, to focus on a systematic and all-round financing management and service that integrates internal and external efforts. The second is differentiated and distinctive financial services that focus on the customized demands of industries. We will continue to carry out the "Zhirongdai" intellectual property pledge financing, integrate the resources of the government, finance and enterprises, give full play to the role of financial "lifeline", cooperate with the Xuzhou Municipal Government's "Xu Zhi Dai" project, coordinate XCMG high-tech enterprises to cooperate with Xuzhou City to carry out the "Xu Zhi Dai" business, transform "intangible assets" into "tangible funds", and apply for rewards in liven up subsidies. While innovating risk mitigation measures, we should also encourage member units to utilize intellectual property rights to reduce costs and increase efficiency. As of the end of June 2023, a total of 1.131 billion yuan has been processed for 12 units, with 3.2946 million yuan of rewards and subsidies implemented, further promoting the empowerment of financial services to the main business. The third is to focus on financing service methods for innovative industries empowered by technology (300832). Since 2020, XCMG Caiyiqian Electronic Contract Signing System has been launched and applied on a large scale. This system enhances the financing processing experience of "Allies" and isolates contract signing risks by adopting technological means such as fully online electronic signature and contract signing based on blockchain technology, public security identity verification, biometric verification, electronic synchronous online notarization, and bank anti-fraud review. It has achieved paperless, online, convenient and second-fast financial services, improved the efficiency of business processing and financial service capabilities, effectively alleviated the problem of "slow financing" for XCMG's suppliers and dealers, and enhanced the experience of financial service integration with manufacturing.

(6) E-commerce platforms

XCMG's e-commerce platform focuses on mechanical and electrical products centered on construction machinery. Currently, it mainly conducts online sales to downstream end customers, providing B2B information display and online transaction services. Through e-commerce platforms, the distance between the company and global customers has been shortened, effectively supplementing the marketing areas that the company has not yet fully developed.

International Station Machmall (Mechanical Mall) relies on XCMG's existing well-established offline channel system capabilities overseas to help platform tenants further expand their international layout and reach through the Internet. As of now, inquiries on XCMG's cross-border e-commerce platform have covered 219 countries and regions, and its products have been exported to nearly 140 countries and regions. Domestic website Mantis Network integrates XCMG's offline industrial chain resources and comprehensively builds domestic industrial chain vertical platforms such as XCMG e-Purchase (excavators) and Loading King (loaders), facilitating the digital transformation of marketing in the upstream and downstream of the industrial chain

(7) Aftermarket spare parts service

The company has vigorously expanded its after-market spare parts services supported by information technology, significantly enhancing the operational quality and risk control capabilities of the after-market. At present, 25 self-operated overseas spare parts centers have been established in 20 countries including Germany, the United States, Indonesia, the Democratic Republic of the Congo and South Africa, and all of them have achieved online network management of inventory. The total amount of overseas spare parts inventory is 500 million yuan. This year, it is planned to build eight new overseas spare parts centers in countries such as Saudi Arabia, the United Arab Emirates and Canada.

The advantages of overseas aftermarket spare parts services lie in the following aspects: First, establishing construction standards and operation models for overseas spare parts centers to ensure the timeliness of spare parts supply; Second, strengthen the supply channels and publicity and promotion of dedicated spare parts for the aftermarket, and promote the marketization of spare parts business.

Looking to the future, we will proceed steadily and far

During the pilot process, XCMG Machinery also identified issues such as data security problems, talent shortages, insufficient demand caused by economic cycles, and the overall efficiency of supply chain collaboration. Based on the summary of past experience, the company has taken the initiative to act and is committed to building an enterprise with core competitiveness and becoming a pioneer of "Made in China".

Over the past five years, XCMG's operating income has increased by 1.6 times, exceeding 100 billion yuan for three consecutive years. Its net profit has grown by 8 times, and its tax payment has increased by 1.24 times. Export revenue increased by 4.3 times. The number of export countries and regions rose from 160 to 191. The proportion of internationalization was nearly 30%. The "XCMG" brand has been listed in the "World's 500 Most Influential Brands" for three consecutive years. The global industry ranking has jumped from the 7th place to the 3rd place for three consecutive years. Xu Fuxuan (This article is from Xinhua Daily)