Hold the Bottom Line and Stick to “One”

At the morning meeting of all management cadres on Jul 22, 2023, Mr. Wang elaborated on the management philosophy of bottom line and stick to “One”.

This year, the work of the Engineering Department (including personnel stability, NPI planning, sample trial production, etc.) has been up and down. In order to address the issues, the company has adjusted the department's leader and involved the senior management team in the internal governance of the department. During the governance process, we found that half of the 700 load in the development section are samples that individually developed by the company before 2023, and even samples developed in 2021 have not been put into storage. As early as 2006, the company has regarded “developing leads the way, quality prospers the enterprise” as its development strategy. At the annual summary meeting in 2009, I explained to everyone that “in European and American countries, glasses are rather than medical health products. They are gradually developing towards fast fashion with their lifecycle getting shorter and the styles becoming more fashionable and diverse.” If the products designed in 2021 remain fashionable in 2023, then we must overestimate our ability to foresee the future. In terms of the cost, the development cost of each sample, from design, selection, sampling to warehousing, is between 3000-4000 yuan. If more than 300 samples are not produced within the required time, it will cause significant waste. Apart from the problems within the engineering team, I believe the business department and logistics department also have undeniable responsibilities for the delay of so many sample orders. Before the business department was divided into several sections based on customer groups, the salesperson used to frequently visit the development department to check orders and track progress. This order checking mechanism to some extent reduced the occurrence of delays in new sample productions. However, now salespeople rarely take the initiative to check orders for customers’ new projects or new samples developed by the company. Two years ago, the company established the Material Control Department III specifically responsible for the cycle control of new products, but it did not play a substantial role in practice. Whether it is the Engineering Department, the Business Department, or the Logistics Department, this behavior of not taking responsibility for the results is a manifestation of a lack of bottom-line thinking.

Bottom Line

Management is about managing the bottom line. Most countries adopt a small government management model, where the government does not interfere or manage society and the people recklessly, allowing the people to be free from any interference or restrictions beyond the law. The only social management they focus on is monitoring whether you violate the law, regardless of whether it is a criminal issue, civil disputes among the people, or the safety of food and other products involved in enterprise production and operation, which are all controlled through laws. For internal employees of the company, if they arrive and leave work on time every day and strictly follow the company's work standards, they will have relative freedom within the company and will not feel constrained by the system. The governance model of countries and enterprises based on the rule of law is essentially a management model of bottom-line thinking. A person can only be considered self-disciplined if they adhere to the bottom line, and abiding by the law is the bottom line for a citizen or a company. For the logistics department, ensuring timely delivery of customer products is the bottom line; for the quality department, ensuring product quality is the bottom line; for the engineering and production departments, regardless of whether the planning department schedules orders or not, if the delivery time is exceeded, we must take the initiative. So, how can we ensure that the work of each department does not exceed the bottom line?

Establish internal circulation

Recently, engineers have been working overtime to supplement the parameters of accessory calculation. In fact, five years ago, the company required PE to enter the parameters of metal accessory calculation into the ERP system when approving the mold. It was not until this year when the IPO counseling team conducted cost accounting based on the existing parameters of accessory calculation in the system that we discovered the inaccuracy of the accessory calculation data. However, the results of the acetate calculation are completely opposite compared to that of the metal calculation. Since the acetate calculation data is entered into the ERP system, material procurement and production manufacturing have been carried out based on the calculation. In the practical application process, we solve one problem when we discover it, and fill a loophole when we find it. Through iterative improvement, the data for acetate calculation becomes more and more accurate. Through the analysis of the two cases above, we find that if an internal circulation is established to solve the current problem, employees will do it as required and with dedication. If there is no internal circulation established to solve future problems, employees will apply a perfunctory attitude towards their work. Therefore, we cannot overestimate the ability of the management team to see the future. Only when an internal circulation system is built can we achieve “seriousness, rigor, standardization, and efficiency” and hold the bottom line.

No multiple choice questions in work

 For customer-supplied projects with no received orders, the company requires salespersons to fill in the reasons (including issues about delivery time, quality and cost, etc.) in the project management table, and requires salespersons to set up projects for each type of issue to the corresponding department heads, so that they can provide targeted improvement measures. At the same time, the finance department is expected to calculate the economic losses of new projects that have not received orders based on the reasons provided by the salesperson, just like quality and production abnormalities, and assign responsibility. According to the audit results of the logistics department, it was found that many salespersons did not follow the company's requirements. There is no idle work within Ouhai. In the early planning stage, we need to evaluate whether this work needs to be done. Once the decision is made, there is no choice but to go all out to do it. We cannot do it optionally or perfunctorily. Only in this way can we create a culture of “strong execution” within the company.

Establish early warning mechanism

We often hear salespeople shouting and screaming in the office because of delayed orders and untimely handling of abnormalities. This shouting and screaming communication style is clearly not advocated by the company. However, from another perspective, if some tasks in functional departments such as logistics and quality control require salespeople to coordinate and repeatedly remind, it indicates that the control ability of these departments in terms of delivery time and quality is weak, and they lack bottom-line thinking. In a company with a sound internal control mechanism, each functional department or individual will perform their duties and responsibilities, and the connection between work tasks is seamless, ensuring that each step is done well and in the right order. At this stage, we should “live in reality and strive in ideals”. We can only prevent work from crossing the bottom line through reminders, supervision, and early warnings. Since the establishment of the early warning mechanism, some negative phenomena in the production department have gradually improved, such as the reduction of leftovers, the shortening of production cycle, and the timely exposure of production abnormalities. In the future, we need to establish corresponding early warning mechanisms for all tasks, so that when a task violates the bottom line system, warnings will be issued at each level.

Stick to “One”

An enterprise can only have one system, one culture. Different levels of products can only comply with one standard. If the product standards are inconsistent, employees will not know which set of standards to follow. If the rules are not unified, there will be people seeking privileges in the company, which will lead to some people crossing the bottom line.

On system: As the old saying goes: “Whoever breaks the law will be punished.” During the stage of formulating the system, we can conduct research, discussions, and evaluations to make the system as scientific, reasonable, and in line with the values of the company as possible. Once the system is promulgated, everyone should be treated equally. The equality mentioned here is not about average, as different positions create different contributions to the company. However, in the face of the system, we must be just and fair. Different positions within the company only differ from different divisions of labor, without any distinction of superiority or inferiority. The company “Eight Dimensions of Operation” explicitly requires colleagues to simplify their relationships. If someone within the company enjoys privileges, work relationships will become complicated and bureaucracy will arise. Since competition is getting hotter and hotter, we cannot waste time on interpersonal relationships.

One standard: In 2022, the company started to establish dedicated lines for customer C018, and fully promoted it in 2023. According to the quality requirements of different customers and different brands, the production line is divided into four levels: A+, A, B and C, so that each production line only produces products of one quality, and employees can foster good work habits. According to management study, it takes 2-3 weeks to develop a good habit, but only 1 day or even less to break one. If employees are asked to work on products of four different levels at the same time, it would be difficult for them to grasp the “degree” of quality standards and it would not be conducive to them developing good work habits. When is a person most likely to catch a cold? It is during the season of temperature fluctuations, because the temperature difference between day and night is larger, so that people with weaker constitution is mostly likely to get ill.

A person can only be considered self-disciplined if they adhere to the bottom line, and abiding by the law is the bottom line for a citizen or a company. In terms of company’s internal management, an internal working circulation and early warning system should be established to hold the bottom line. A company can only have one system and one culture. In front of the system, we have to be just and fair. Different positions within the company only differ from different divisions of labor, without any distinction of superiority or inferiority. The company “Eight Dimensions of Operation” explicitly requires colleagues to simplify their relationships. If someone within the company enjoys privileges, work relationships will become complicated and bureaucracy will arise. For the production aspect, we actively promote a model of one production line producing products of one quality level, which can help employees foster good work habits.