"General Manager Feng, after thinking for so long, you only came up with this solution?" Fatty Huang was disappointed. OEM is the same as working for others, and he will be at the bottom of the ladder.
"Old Huang, what do you think a supermarket is? It is just a small shop that is magnified a few times. Then why are the small shops not making much money, and the supermarket can make a few times more than the small shops? "
"The supermarket is big, and there are a lot of products."
"What you said is reasonable. But the most important factor is that the supermarket defines the cost of the products. The supermarket must ensure a certain percentage of profits, and that will limit the cost of the products. If the cost is too high, it will be hard for the supermarket to survive. The small shops on the other side of the street might have different prices. But in Tai Hua Supermarkets, all the shops will have the same price. This is the cost standard. "
Fatty Huang nodded thoughtfully. "But what does this have in common with OEM?"
"OEM is the workers and production technology. The similarity between OEM and supermarkets is the cost of production. Other people can produce 100 products in 8 hours, and you can produce 120 products. You will make money, and everyone will follow your standards. This is similar to a company's quota. "
"But how much can we make by producing 20 more products? This way, we will lose the chance to set up our own brand. " Fatty Huang hesitated. He knew that if a product needs to be branded, the additional value of the brand will be very high.
"Old Huang, think about it. Is our country's Lenovo Group powerful?"
"Yes. It is the biggest PC manufacturer in Asia, and I heard it is the world's top PC manufacturer." Fatty Huang also knew that Feng Yu owns shares in Lenovo Group. Furthermore, Lenovo Group is a powerful company, and he did not hold back on his praises.
"Lenovo Group's factories do not have a high production capacity. Most of their production is done by OEM. Even our Aiwa Home Appliances, Wind and Rain Home Appliances factories had produced a lot of OEM products for them, especially Lenovo's LCD monitors. Do you think I will do this if it is not profitable? I can produce more DVDs and crush your small factories. Can't I make more money? The profits from one DVD player is more than the patent authorization fees. "
"This is because Lenovo is paying us quite a lot. Our machinery and equipment, except for maintenance time, will never stop working. This makes our factory more profitable, and also allows our piecework workers to earn more money. There are many factories in Guangzhou and Shenzhen, and they have a great advantage in hiring workers. If you can integrate all these, form a scale, and increase efficiency, then you will be able to earn a lot of money. "Feng Yu said.
In Feng Yu's previous life, Foxconn was one of these companies. They had set many industry standards and strictly controlled their workers' work efficiency. They were the industry leader, and their annual profits were not a small amount.
However, Foxconn's management was too harsh, which led to some problems. In addition, Hua Xia's labor costs generally increased, so Foxconn gradually moved its factories to India and other countries with lower labor costs.
Foxconn was one of the Fortune 500 companies that had truly utilized its labor cost advantage to the greatest extent.
"Manager Feng, I think I understand what you are trying to say. You want to increase the scale, increase the efficiency, lower the cost, and get profits, right? "
Feng Yu nodded. "That's what I mean. But there is still one thing missing. You need to set the standards. In the future, all the factories will have to follow your standards. If they do not meet your standards, their profits will be much lower, and they might not even have any orders. "
"But I can merge with those small factories. Those factories are not big, and their profits are not good recently. If I want to merge with them and take over all their workers, most of them will be willing to sell to me. But after merging with those factories, even if we increase our efficiency and lower our cost, we will not have any orders. "
No matter how hard you work, what's the use if you don't have work to do?!
"Since I have told you about this, I can guarantee that you will have work to do. If you really merge those factories and increase the scale and efficiency, I can make the decision to let you do some HD DVD, mobile phones, MP3 players, USB drives, and even the assembly of computer parts or whole machines. After you receive our orders, it will not be difficult for you to get orders for other products. "
Fatty Huang's eyes brightened up. General Manager Feng's meaning was too obvious. Feng Yu wants to give him orders. With General Manager Feng's generosity, the orders will not be small. If Fatty Huang still wants to torment his small factory, he will not be able to do it.
"General Manager Feng, how about this? You give the orders to me, and I will think of a way to complete it with quality and quantity." Fatty Huang thought of another way.
That was to be a contractor and subcontract the orders to other factories to make money.
Feng Yu rolled his eyes. "What do you think?"
Fatty Huang smiled. "General Manager Feng, to be honest, if you did not lower the patent licensing fees, it will not be difficult for me to acquire those factories. But now, I am afraid I will have to spend more money. Of course, I can still take out the money, but I am not confident. "
"You want to sign the contract first?"
Fatty Huang nodded like a chicken pecking at grains. "Can I?"
"Of course not!" You are thinking too much! When the contract is given to you, but you cannot complete the order, it is a small matter to pursue the responsibility. The most important thing is it will affect the product's sales.
"Then General Manager Feng, how should we set the standard?"
"Do you know Foxconn? Lenovo is the biggest OEM for computers and Wind and Rain mobile phones. They are now setting the 3C OEM standard. If you can cooperate with them, it will be a success. "
"Foxconn? Oh, it's them. The management there is too harsh, and many of our workers are from Foxconn. "Fatty Huang was disdainful of Foxconn.
Management must also be humane. The workers are creating value for you. If you treat the workers badly, the factory will be in trouble. As the education level in China increases, it is hard to hire those who do not know anything and can accept low wages.
There were many such people in the western region. But now, Feng Yu's Guangcai business is developing faster in the western region. Many of those who decided to work in the western region can find jobs in their hometown.
Less work, more money, and closer to home. Only idiots will go to work in the western region.
"Since you think Foxconn is too harsh, then you should think of ways to exceed Foxconn's efficiency and set your standard. Although you might earn less than Foxconn in the beginning, your corporate culture will make your company last longer. "
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