The path of industrialization corresponding to the world's factories. In the 20th century, a big country like Songyibao may no longer be able to go through. The great development of traditional heavy industry and chemical industry will inevitably consume a lot of resources and require huge sacrifices to the ecological environment. This is unbearable for China's fragile ecosystem. It is also one of the reasons why the West calls China the world's factories while constantly creating various versions of the China threat theory.

Fan Wubing said with great concern, "It's a pity that some people in China can't hear the jokes and evil truths here. Instead, they feel that they have received praise from foreigners and feel a little satisfied. It's really ridiculous!"

Another meaning of China becoming a world factory is that China's dependence on foreign trade has further increased. At present, China's dependence on foreign trade has reached 70%, while import and export trade is still growing at double-digit annually.

Such an economic structure is similar to a small country, not a big country.

The demand from the United States and Japan mainly comes from domestic, not foreign, and the dependence on foreign trade is only between 20 and 30%. If consumer demand depends too much on exports, then the potential economic risks and external shocks will be great.

One of the problems that China should urgently solve in economic development is to increase the share of domestic demand in total demand and establish an open-ended major economy that matches China's population size, territory and international status.

China's urbanization and industrialization process, population size and employment pressure require the establishment of a manufacturing industry that can be produced from socks to computer chips.

World Factory was once a praise in the nineteenth century, but now it is not a compliment.

The 19th century was the era of large-scale industrial production. The country with the strongest industrial production capacity was the most powerful country at that time, so the world's factories were also an empire that day.

However, after entering the 21st century, the world economy is no longer an era when industry is king. China's world factory name is just another term for OEM. It is synonymous with low added value and is by no means a sign of a strong country.

After entering the industrial era, the process can be materialized on machinery and equipment. The social division of labor is further refined, and the assembly line production model emerged. Initially, European and American enterprises used a vertical production model that integrates design, manufacturing and packaging. With the changes in the demand for the first time and the advancement of science and technology, some enterprises began to seek changes in production mode in order to meet the needs of multiple varieties and small batches of products, and a situation of separation of design, manufacturing, packaging and industry emerged, and the OEM industry emerged.

OEM is to produce products according to the exact specifications proposed by foreign multinational companies. The products are acquired by multinational companies and sold to the market under their own brand.

With the further acceleration of economic globalization, OEM demanders may select OEM suppliers on a larger scale, especially in countries and regions with low processing and manufacturing costs.

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In the 1960s and 1970s, the economic structure of the country changed from labor-intensive and capital-intensive to technology-intensive. These labor-intensive and capital-intensive enterprises turned to neighboring countries and regions for exhibition. Many countries and regions such as the Four Asian Tigers, Brazil and Argentina in South America, all gained huge benefits from it, and export-oriented manufacturing was transferred to areas with lower labor costs.

"In Asia, in order to attract capital and technology, Japanese companies quickly occupied the market and first adopted the international OEM production and trade form. The rise of the four Asian dragons is closely related to OEM. Among them, Taiwan has long become the largest OEM base in the world, and India has also become the world's largest computer software exporter through OEM." Fan Wubing gave an example to Shen Ying, "The annual sales revenue of Nike in the United States is about 2 billion US dollars, but it does not have a production factory. It only focuses on research, design and marketing. All products are OEM, and its OEM factories are mostly located in East Asia, such as China. What we lack now is not manufacturing technology, but the mind and consciousness that can make money."

Shen Ying nodded and agreed. As the boss of a series of companies, she also knew this very well.

For OEM factories, cost is the core and the key competitiveness of OEM companies. Cost directly determines the survival of the enterprise. The reason is very simple: If OEM costs higher than one's own production cost, then why do you still need OEM? In addition, management is the key, because the quality of management directly determines the cost and product quality. The management mentioned here includes financial management, personnel management, production line management and other aspects.

From an economic perspective, the OEM model is relatively simple. The value created by an enterprise is the value of the processed product. This value includes costs and profits, and its cost of equipment and labor costs are the most important costs. In other words, some of the value created by OEM is the value brought by hardware investments such as equipment and factories, and another important part is the value created by workers.

Since the cost of equipment is dead, whether a company can make a profit depends on the value of the labor just now. The important source of corporate profit is the labor's dedication, that is, wages, welfare, etc.

The comparative advantage of China's labor price is the main factor for China's foundry industry to maintain profitability. However, the advantage of labor price is not sustainable for a specific enterprise. With the development of China's economy, the comparative advantage of labor price will definitely weaken.

Now, due to the rising labor prices, many companies have been troubled by falling profit margins. Secondly, because the cost advantage stems from labor prices is the advantage of China plus export-oriented enterprises over similar production enterprises in other countries, rather than the unique advantage of a specific enterprise in China. Therefore, within the scope of domestic competitors, this overall advantage does not constitute the competitive advantage of specific enterprises.

The core competitiveness of a successful OEM company is to maximize labor costs, and this value maximization often requires the strictest management, and many contradictions are created.

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For enterprises operating under the OEM business model, they must implement an operation strategy of three highs and one low, namely high delivery, high quality, high flexibility and low cost. Therefore, using the human wave tactics to shift 24 times, mass production in multiple varieties and batches, fast conversion, and the product life cycle is relatively short, from order acceptance to delivery, allowing customers to seize the opportunity.

One distinctive feature of OEM companies is that each position is the parts and screws on the entire company's large machines. The processes are simple and repetitive, but they must be happy to follow the steps. The management model is basically quasi-militarized or militarized. Strict hierarchical system and discipline. High pressure and high obedience make employees' work behavior seriously lack freedom and personality.

In OEM companies, high-pressure management is everywhere, such as equipped with collective dormitories, collective canteens, etc. This not only ensures that employees can go to work on time at any time, but also requires many brand customers when placing orders, which facilitates the company's pursuit of efficiency to the greatest extent.

"From the logic of new institutional economics, the reason why enterprises exist is because there are transaction fees in the market. The internal orders and obedience systems of enterprises can save a large amount of transaction fees from market bargaining to ensuring the execution of contracts, thereby reducing uncertainty and various risks in the production process. This centralized management is nothing more than internalizing transaction fees and thus achieving the pinnacle of cost control.

Fan Wubing said with emotion. "Office companies are at the end of the industrial chain and rely on compressing labor costs to make profits, which has led to the extreme development of their management model, which has promoted the alienation of people and the semi-militarized collective dormitory life. The overtime, high pressure, and high obedience working model that is voluntary on the surface but is actually difficult to get rid of. The simplicity and insignificance of personal relationships on the never-ending assembly line. For every employee on the OEM assembly line, this is the worst paradise and the best hell."

"At present, most of the domestic and foreign companies are OEM factories? Especially Taiwanese and Japanese companies, they are basically the most mean and capable of squeezing factories. I also heard people call those companies sweatshops!" Shen Ying said to Fan Wubing.

Fan Wubing nodded and replied, "This is normal. Because Japan has ruled Taiwan for fifty years, it is consistent in the corporate structure. Not only is the family management phenomenon serious, but the underworld management model is also criticized. The darkness here is not something that ordinary people can explain clearly."

"But, in China at present, can it be possible to not engage in OEM industry?" Shen Ying asked Fan Wubing.

After thinking about it, Fan Wubing shook his head and said, "It's not that it can't work, but it depends on whether the role of the government is reflected?"

"What does it mean?" Shen Ying was a little confused about the meaning of Fan Wubing's words.

"When the Internet started a market economy, there was a saying that was very loud, saying that if you have any problems, look for the market, don't look for the mayor. You should have heard this?" Fan Wubing asked Shen Ying first.

question.

"I've heard this. This is a very classic saying, which directly brings the company to the market." Shen Ying nodded and replied, "But what does this have to do with what you said?"

"Of course there is a connection," Fan Wubing replied, "When the economy is transitioning, this is right. Everyone needs to have the awareness of solving problems on their own, rather than waiting to rely on the government to provide relief. The government does not have that much ability."

Shen Ying nodded and agreed.

"But now that this sentence is still being frequently used, something is wrong." Fan Wubing continued.

"Why is something wrong?" Shen Ying didn't think that something was wrong with this sentence. She looked at Fan Wubing in confusion. She wanted to hear him explain carefully what the difference is.

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Chapter completed!