The Winter of OU HAI

Dear colleagues,

Hello everyone!

This year's Spring Festival holiday would be a holiday we will never forget. because of the corona virus, we reopened factory much later than previous years. We stayed at home for nearly 40 days. I believe this is the longest holiday since we worked. In order to control the epidemic as soon as possible, the whole country obeys the rules of the government, and everyone stayed at his own home.

Stayed at home long time, missing work, used to busy every day, all of a sudden stopped down, really a little does not adapt. Not staying at home is not good, happy to be with my family every day, the occasional break is also for a better start. But for a long time, all day long, at the same time, the same track is repeated at home, it makes people feel empty and bored, constantly ask myself in my heart whether such a life is meaningless. During this period, I had several conference calls with our senior cadres, to discuss how to start as soon as possible.

After such a long rest, I believe that everyone have the same feeling that work can give a lot of value to their lives. It's really great to have a job!

After well prepared, we finally started work on February 24. But different from the previous years, we are facing a lot of problems when we return to work.

1. The employees who can come back on the day of commencement are basically the management and employees who can drive back to the factory by themselves. Because of the traffic problem, most of the workers cannot go back to the factory. With the efforts of the company's management and the help of the government, we have sent management cadres to all parts of the country to organize personnel to bring back. After nearly three weeks of hard work, our staff has gradually recovered to about 90% of the end of last year. Although the whole process of returning to work is a little hard, as a result, even under the influence of the epidemic, our staff's return to the factory is not much worse than that of previous years. Of course, it cannot be separated from the collective efforts of our management, such as Song Chunfeng, He Xiaofei, Chen Yongjiang, Liu Jiaqiang, Dong pan, Zhou Enhui and so on. The company should thank them for their efforts. From this, I can see the strength of the team and the strong cohesion in difficult times. I believe that our enterprise must be competitive. At the same time, let's also think about how to recruit human resources in the future, which should not be limited to one department or one place, but should work together and blossom in an all-round way.

2. We have 10% employees from Hubei, they are distributed in various departments of the company, from managers, supervisor, technicians to ordinary employees, they are engaged in different position. Many of them are engaged in the core positions of the company. They can't get there in time, slow down the company's resumption of production by several beats. Of course, these cadres are not idle at home, every day, they help to contact their workers and guide the work of their departments by phone or mobile app. Hope they can return to the company as soon as possible. At the same time, after the epidemic, we should also think about how to make more efficient and better mobile office for manufacturing enterprises. In order to live a good enterprise in the future, we must have flexible measures to deal with all kinds of unpredictable anomalies.

3. Although spectacles is a small industry, there are many supporting supply chain manufacturers, and the whole supply chain is also relatively long, such as electroplating factory, accessory factory, and parts factory. Only enterprises above designated size are allowed to start construction in the first phase of the government. Most of the supporting enterprises are not above scale enterprises. As a result, there is a gap of nearly one to two weeks between their start-up time and that of the glasses factory. Moreover, it will take more time for these enterprises to start to work normally. Things in the supply chain are not trivial, any supply chain problems will affect the resumption of the glasses industry. No matter how well we manage, there is no way to be better than our supply chain. Although they are small, they determine the speed of our resumption of production. This is also why I often say that the essence of enterprise production competition is logistics competition and supply chain integration ability competition.

Based on the above factors, it is estimated that our resumption of work will be nearly half a month slower than the previous years. In addition, due to the delay in construction due to the epidemic in the early stage, we have lost nearly a month of production time. This has brought huge economic losses to the company's operation. That's why I asked Financial Secretary Lu Linlin to give me a breakdown of the total amount of our receivables, the inventory value of the warehouse and the total amount of our payables as soon as the start of this year. I want to see how much risk resistance we can have and how much net cash flow we can generate in the future. In difficult times, we must have a clear understanding of ourselves so as to be truly prepared. But now what worries me even more is that when our production returns to normal by mid April, we may face difficulties such as insufficient orders and capital turnover. Through every day's news, you can see that the corona virus has become a global epidemic, the whole Europe has basically fallen, and the United States is also showing a more and more serious trend. According to our country's governance experience, there is no way to control the epidemic for more than two months, and people in Europe and the United States are more free and loose, which may make the time longer. According to President Trump, it will not be completely controlled until July and August. This will be a difficult process for us, who mainly export from Europe and the United States. I think the future will be the most difficult period in the history of Ouhai, the winter of Ouhai. In the early stage, we spent a huge cost to resume production, and in the later stage, we will face a huge cost to maintain the factory.

In the face of the epidemic, we will face both internal and external difficulties. Externally, customers may have the following situations:

1. Extension of payment time 。

At present, most of our customers have a payment Item. It should be said that the whole industry chain, from the accessories factory to the end of the glasses shop, has a payment cycle phenomenon. When the epidemic situation becomes more and more serious, many countries will stop, which will inevitably have a huge impact on the capital flow of the entire industrial chain. That's why at the beginning of the construction, I asked the finance and business department to increase the intensity of Dunning to ensure that customers can get all the money back before the outbreak of their national crisis. But judging from the results of these weeks, it is not very ideal. In the process of checking, I found a lot of loopholes in business and financial management, and found a lot of unrealistic management work. As I said many years ago, our business and finance should pay attention to the receivables of customers. If the payment can't be received back, all our efforts will be in vain. What do we pay on? How do we pay the supplier? By what? It's all on receivables! The management of Ouhai knows that I am very sensitive to figures and costs, and I have been focusing on finance. Do you know why? Because I am responsible for the development of Ouhai, the nearly 2000 employees who follow me, and all suppliers who cooperate with us. If you are not in charge, do not need to take responsibility, do not need to be responsible for the final success or failure, of course, you can be very detached. Besides, most of our employees come out of the countryside and survive the hard times. We don't want to let ourselves go back. In a nutshell, I would like to ask those salesmen and financial specialists who don't pay attention to receivables. Do you pay attention to your salary? Do you have any opinion if the company doesn't pay you on time? Therefore, business and finance do not pay attention to receivables and are not responsible for receivables, which is not qualified business and finance! At present, if any customer requests to postpone payment, we should understand that we are in partnership with the customer in case of any difficulty. While we understand our customers' difficulties, we also hope our customers can understand our difficulties. So try our best to make the payment due in the past so that customers can pay in time, so that we can prepare for the winter. For the latest delivery and future payment due, we allow customers to extend the payment period, and do not burden customers in difficult times. However, for the extended payment period, customers are required to set a time limit and return to normal after the outbreak.

2. Delayed shipment

After the outbreak of the epidemic, many countries will take measures to seal the city and store in the end, which means that the demand of the whole industrial chain will drop overnight. End consumer demand is gone, the most direct result is that customer inventory will increase. In order to reduce inventory, customers will definitely let us slow down the speed of shipment. In fact, as soon as the start of this year, in addition to let the business seize the collection, I also let the business seize the shipment. Before the Spring Festival holiday, in order to reduce the impact of the holiday on us, we basically adopted pull production and overtime work to pull forward the orders in February and March this year, and the warehouse piled up a lot of goods. In fact, in addition to the huge economic losses to the company, we can basically meet the needs of customer service. There are so many goods in the warehouse. I haven't delivered goods to the customers in such a long holiday. I hope I can deliver the goods quickly. On the one hand, it can quickly connect with the sales speed of customers, on the other hand, it can also speed up our collection cycle and prepare sufficient cash flow for the return stage. I'm very glad that I made this decision. If we didn't ship at that time, we may not be able to ship a lot of goods now, which will cause unprecedented pressure on the company's capital and venue. Because of the aggravation of the epidemic situation in various countries, the goods we produce now to the next two or three months may be overstocked in the warehouse and unable to be transported out, which will bring huge pressure on our cash flow and venue. For this problem, I hope that logistics and business can communicate well with customers to see what their most urgent needs are, which orders can be postponed, and try to reduce our capital backlog on the premise of meeting customers' needs.

3. Reduction of old model repeat orders

When the demand of the end consumer decreases, the order returned will also decrease. Although we still have a good situation of returning orders after the commencement, it is because our customers haven't placed orders for nearly four weeks during the holiday, and they are making up for the safety stock demand in their system. The safety stock demand in the customer system is generated by multiplying the sales quantity in the past unit time with our production cycle. In such a sudden epidemic situation, the sudden decline of demand or the trend of future decline, it is difficult for the system to adjust quickly. At this time, our ability of communication and observation as human beings should be highlighted. As managers, our judgment should not only be based on the past, but also be able to see the future and make rapid adjustments. Our logistics and business should establish a regular communication mechanism with customers to ensure that we can understand the real needs of customers, and make corresponding adjustments to our production capacity according to the actual needs. Ensure that our capacity is used for real demand and that our capital is used for real demand.

4. Cancel order

When the final consumer demand plummets, in addition to the delay in delivery and the decrease in repeat order quantity, there is another risk that customers cancel orders, especially for sunglasses customers. Sunglasses is a seasonal product, with time limit, after the sales time, then the demand for sunglasses will drop sharply. In addition, a large part of the sales of sunglasses are driven by tourism and traveling. The corona virus has reduced the number of tourists around the world, and it will certainly bring about sales problem. At the same time, compared with optical glasses, sunglasses are fashion products, and fashion products have a living time. Most of Wenzhou Sunglasses follow the fashion trend of international brands. Under the influence of the corona virus, the uncertainty of future fashion trend is increased. Especially after the outbreak of international famous brands continue to launch new products, perhaps customers now purchase frames may be outdated by then. All these increase the customer's worry about his purchase order and increase the possibility of customer canceling the order. Therefore, we must regularly communicate with customers and grasp the dynamic of customers. At the same time, we also need to inform customers of our progress in time, so that customers can fully consider various factors when making decisions. For those who have not started or just ordered materials can be cancelled, help the customer to cancel; for those who have ordered materials back or have started production, it is better to use delayed shipment instead of cancellation; for those who have to insist on cancellation, clearly inform the customer of our cost loss and ask the customer to make corresponding compensation. We should give full consideration to our customers, but also let them understand our difficulties and be able to share them.

5. The new project development
I believe that customers will still have some new project, customers should not and will not forget to develop new projects at any time, because the market is still in there. After corona virus situation, when everyone is poured into the market, or want to rely on products. As managers, we should realize that competition exists at all times, prepare for future competition even in difficult times. But because of the slowdown in sales, the inventory is overstocked, it will make customers more conservative in the development of new projects, customers are reluctant to have too many resources occupied by new projects, a lot of projects will reduce or delayed. At this time, the purpose of customer pushing new projects is to drive sales and clear inventory, it will be different from the previous fixed cycle projects. We need to seize these rare opportunities internally, integrate resources and try our best to meet customers' requirements for new projects.

6.Increased credit risk

If there is no way to overcome the corona virus in a short period of time, I believe that there will be a great risk for customers who do not pay attention to cash flow management at ordinary times, and there may be a group of companies that do not pay attention to operation and do not have the ability to manage will fall. According to the audit status of the same business and finance in recent days, we should prepare for bad debts and dead debts for some customers. What makes me sad is that these customers' problems should not be discovered after this outbreak. Looking at the historical order and payment records of these customers, we can find the problem completely. When an enterprise has problems, it is definitely not a matter of a moment. It must be the accumulation of internal problems that finally erupts through that moment. Through successive crises, we should fully realize the importance of financial management. As I have always stressed that the management of an enterprise is good or not, it is ultimately reflected in the financial. If there's a financial problem, it's useless to manage other places as well. Because the blood flow is dry, no matter how good other organs are, life will be exhausted. Every crisis should be an opportunity for financial management to be more standardized and rigorous. In Ouhai's history, the financial perfection is obtained through the price of blood. I hope this crisis can make financial growth, form a set of anti risk and customer credit evaluation mechanism, and hope that the price paid today is the last tuition they paid.

Colleagues, the above points are some of the reactions that customers will have under the influence of the global corona virus, and some measures we should take in the face of customer reactions. Once again, I would like to emphasize that this crisis is different from SARS in 2003 and the financial crisis in 2008. At that time, the crisis was limited to certain regions or areas, and may have some impact on the surrounding areas, but it has little impact on us. This time, the corona virus has been listed as a global epidemic. It has spread all over the world regardless of national boundaries, people and fields. It has had a serious impact on all regions and people. For those of us who have grown up in the 30-year development era of reform and opening up, our life has been developing in a good direction, rarely encountering any serious crisis. However, the corona virus may be the biggest crisis we have encountered in our life, and also the biggest crisis in the development history of our enterprise. We must be prepared and work together for the overall goal of survival. To this end, we should also focus on the following themes:

1. Live on

To survive is the first task and the first strategy of an enterprise. Enterprises, like people, must first live, and then discuss whether to live well or not. Stay in the green mountain, not afraid to burn without firewood. How to survive? From now on, all the company's investments and expenses unrelated to "living" should be suspended until the end of the epidemic. To save all resources, so that enterprises can maintain daily operations at the lowest cost. All expansion plans made by departments years ago should be suspended. Don't be distracted at this time. Everyone should focus on the overall goal of how to make their department and company live. During the construction period, I paid close attention to the corona virus information in Europe and America every day. Seeing the attitude and measures of dealing with the epidemic in Europe and America, I realized that the corona virus situation in foreign countries would be more and more serious. As managers, if we want to survive, we need to have three eyes like the Erlang God, one eye on ourselves, one eye on competitors and the other eye on the market. We should not only focus on ourselves, any decision should be based on the comprehensive results of three eyes. A week after the commencement, I asked manager Yao to lead our team to discuss and plan plan plan B at the meeting of the company's senior Masons. Over the past decade, thanks to the reform and opening up of the motherland, our plan has been to move forward, forward and forward. We seldom think about what to do in case of recession, and what to do in case of black swan? I think from now on, even after the end of the epidemic, we should always have plan B ready for emergency needs. Before winning, consider losing first! Though the courage is admirable, so is the courage. But the best way for a mature enterprise is to advance and retreat. Don't sell your name and learn from the overlord! There should be flexible internal management and control methods, and flexible adjustment should be made according to the order and production forms. We should not only ensure the basic survival and living needs of employees, but also preserve the strength of the enterprise to survive and start again.

2. Use sparingly

Colleagues, when we started this year, Mr. Chen told me jokingly, "this year's economic situation will not be so good, we need to save and use." Today, I also give this sentence to you. I hope you can use it sparingly. Saving doesn't mean that we should shrink our clothes and go on a diet, go back to before liberation overnight, but think about it when we spend money. Is it necessary to spend it? What's the difference between flowers and no flowers? When shopping, ask yourself more. Is it necessary to buy? Does the family already have it? If not, ask yourself if there is something you can replace? When we constantly use this kind of thinking to ask ourselves, we find that there are not many things we need. People can survive in a simple way and live well in a simple state. At the peak of this year's epidemic, we stayed at home. Apart from the necessities of life, we didn't go out for more than a month, nor did we go shopping. Apart from feeling a little bored and empty in spirit, we didn't feel that we lacked any material things. Back to work, when we are in the business department, we should also save, and the biggest province is to reduce abnormal losses and avoid unnecessary waste. The management should take a good look at their work through this period of time, go to the scene more deeply, participate in the handling of details more, and have a zero tolerance attitude towards all abnormalities and waste. In difficult times, no one or anything is allowed to increase the company's extra burden. At the same time, all departments should also sort out the cost composition of their own departments and study it carefully to see if there is any space for saving and if they can squeeze out some water, so as to ensure that every penny is spent on the edge of the knife and is suitable for its place.

3. Deep clean beach, low weir

Difficult times are also the time to test and improve our ability. The history of human beings has always been a history of fighting against disasters and epidemics. Germs always attack human beings through the loopholes of the human immune system, but every epidemic situation to the end makes our prevention system, immune ability and medical ability continuously improved. The epidemic has not eliminated human beings, but human beings are more prosperous and powerful. We can verify this through the continuous growth of population and life span. For our enterprises, on the one hand, the difficult times will highlight the problems of various departments, and we need to take this opportunity to make up for them. On the other hand, all departments should take advantage of this opportunity to have a good look at the interior to see where our interior is not solid enough and which work can be optimized. We should make difficulties the best time for us to make up loopholes, optimize the system and strengthen the team.

Colleagues, the optical glasses industry is just in need. I believe that the market will still exist after the epidemic. We must find a way to live until the spring comes. We need to pass this test to reflect, improve and optimize our governance ability, management team and business system, and we need to know how to cherish our work. Those who can't beat us will make us stronger.

It's good to live, it's good to have a job! Will spring be far away when winter comes? Never lose expect and hope!

Encourage each other! Look forward to it! Fight together!