Bearing companies need to pay attention to whether they can safely survive the winter

China's bearing industry is an industry with low concentration of production. There are more than 1400 bearing enterprises above the scale, mainly concentrated in Wafangdian, Luoyang, Zhejiang, Jiangsu, Shandong and other regions, and initially formed Wafangdian. The region produces medium and large-sized bearings, micro-small bearings in Jiangsu and Zhejiang, Luoyang to produce extra-large bearings and bearing rollers, and regional industrial clusters that produce bearing components such as balls and cages in Shandong. Among the more than 1,400 bearing manufacturing enterprises, except for Wa, Ha, Lo, Wanxiang Qianchao, Zhejiang Tianma, Renmin Group and other enterprises, their main business income exceeds 1 billion yuan, and most of the rest are small and medium-sized bearing enterprises. .

In the stage of rapid economic development, everyone lives well, from scratch, from small to large, from weak to strong, and continues to develop along this path. However, since the beginning of 2008, the situation has reversed, the rising value of the ***, the rising labor costs, the promulgation and implementation of the new labor contract law, the rise in raw material prices, the increasing difficulty, the global financial crisis, and the market demand. The sharp drop, many factors, like floods, menacing, watery, badly drowned, slightly watery, but also thumping and struggling for a while, water well but temporarily no worries, but do not know can swim Wherever, only those vessels ready in advance can calmly deal with it. However, most companies still do not have this preparation, especially for small and medium-sized bearing companies, and their impact is also greater due to their weak ability to resist risks. First, the crisis from the market

The subprime mortgage crisis in the United States, like earthquake waves, quickly spread to the entire world. The European and American markets have been depressed and the purchasing volume has dropped drastically. Affected by this, the 11 countries of the BRIC countries (BRIC and VISTA) have also faced crises. They originally thought that regions such as China, India, Russia, Brazil, Eastern Europe and Southeast Asia were developing countries. The market has great potential and there is ample space for self-development. It will not change significantly due to external influences, but this is not the case. The integration of the world economy is already a loss, a loss and a glory. The fiery demand situation has been declared to have ended in June of this year. Since July, it has entered a cold winter. New orders for the market have been reduced drastically, with a reduction rate of 50% or even lower; orders for already-manufactured products have been delayed. The customer’s reason is that the inventory is squeezed too much, the sales are not moving, and the funds are being returned slowly. Domestic and foreign markets all show the same situation.

Second, the pressure from competitors

Whether it is a manufacturer of small bearings or a manufacturer of medium and large-sized bearings, the homogeneity of products is very serious. All of them are crowded in the same market. Take Wafangdian City, which has a population of less than 1 million in urban and rural areas as an example. More than 300 companies, basically using the same equipment, the same technology, the same process, the same supporting parts, production of the same product, enter the same market, but the share is different. When they need to flourish, they have no problem with each other. They only need to build their own horsepower. The products are not sold. When demand falls sharply, everyone competes to cut prices, changes their methods to reduce costs, hesitate to cut corners, vicious competition, maintain low profit or even no interest, and some companies finally reach a state of loss and close. This situation has continued to unfold and has become increasingly intense.

Third, continue to face the risk of capital chain fracture

Since 2001, China’s economy has maintained a double-digit rapid growth. During this period, many small and medium-sized bearing companies have been nurtured, small factories have grown, large factories have become stronger, and many small bosses have enjoyed a feast of economic development. , And take it for granted that he is born with material and what to do, so the desire continues to expand, resulting in the urge to invest blindly, the scale of investment continues to increase, expansion or new plant, procurement of new equipment, especially in 2006 By 2008, about 70% of the companies had expanded at different scales, and the source of investment mainly relied on self-raised funds and **. Most of the money that business owners had made was used for investment to expand and reproduce. However, in the second half of 2008, the market situation changed rapidly. Orders decreased, inventory increased, capital withdrawals slowed, bad debts increased, procurement costs increased, labor costs increased, difficulty of new jobs increased, and many bearing companies were seriously troubled by funds. Miserable, it has continuously triggered the suspension of production and closure.

Fourth, the pressure of talent shortage

For a company to develop healthily, it must take into account five aspects of human resources, namely, market, production, technology, quality and finance. If these five areas can find suitable people and have strong capabilities, this enterprise can develop rapidly. Even if there are three areas that are strong, the company will also develop soundly. However, the current situation is that many small and medium-sized bearing enterprises are family-owned enterprises. The bosses are fully managed. Their immediate family members have at least grasped several aspects of the market, production, and finance. It is difficult to say that these immediate family members are relatively capable in these respects. . In the past few years, everyone has been expanding. They have gradually realized the importance of talents, but they can find good people in one or two areas. Technology and quality are in a weaker position. Therefore, the entire management chain always has Short boards, even a few short boards.

Fifth, technology is relatively backward

China is a manufacturing country of rolling bearings, but most of the manufactured products belong to medium and low-end products, mainly due to backward research and development capabilities, backward equipment, and backward processes. Machine processing equipment is basically single-machine operation with low efficiency and machining accuracy. The operator's skill level fluctuates and the accuracy of the bearing cannot be guaranteed. For applications where the required accuracy is high, these products cannot be accessed. The bearings produced are basically ordinary grades and can only be applied to equipment with low precision requirements. In the occasion with high requirements for supporting equipment, these bearings are basically rejected. Customers prefer to use high-priced bearings from well-known foreign brands, such as rolling thin steel plates. If the precision of the bearings does not meet the requirements, they cannot produce qualified products. Steel plate.

With the continuous advancement of technology, the market demands higher and higher quality products and grades. Most of the large-scale P0-class plain bearings produced by small and medium-sized bearing companies have increasingly lost market competitiveness and have no profit margins. In the export trade, it showed low grades and low prices.

Six, quality consciousness numbness

In the overheated development stage of the economy, as long as there is demand for production, it is often seen that the customer urgently urges the goods and the salesman scrambles for resources. Strong demand has led to a weak sense of quality, poor raw materials can also be used as bearings, unqualified products can be sold, and fierce competition, making people more willing to use price wars, working hard on costs, and shoddy , Reluctant to work hard, do not want to work hard on quality, quality often makes way for speed and quantity.

VII. Increase in labor costs

The promulgation and implementation of the new labor contract law has increased the labor cost of enterprises. Before the law was implemented, many small and medium-sized bearing enterprises generally did not pay social insurance for their employees. Now the company must pay for employees, and the labor cost of the company will increase by 20%. This year's rapid rise in the price of goods, the wages of employees have also been generally raised, the above two aspects of the increase in labor costs up to 30%.

VIII. Instability of Labor Resources

Due to the rapid industrialization process in recent years and the strong demand for bearings, a number of small bearing factories have been newly established. The original small-sized bearing factories have also become large-scale bearings factories. Everyone is in a fast-paced production, and labor resources appear to be high. In short supply, in order to compete for labor resources, especially skilled labor force, all of them tried their best to keep up the high prices. The attractiveness of the outside world made many employees dazzled, and because more small and medium-sized bearing enterprises did not pay labor insurance for their employees, Without the signing of a labor contract, the flow of employees has no concerns and no costs, and the mobility of employees is very large. Some skilled workers or skilled workers often leave work in great trouble.

IX. Fluctuations in raw material prices

The sharp increase in the price of imported iron ore caused a sharp increase in the price of bearing steel, which was frequently increased. The price of bearings also followed rising prices. The price of bearing steel was increased by nine times from January to June in 2008, and it stabilized in July. In one month, the situation began to reverse in August and the price dropped sharply. From August to October, the price dropped by 5 times. In such a short period of time, the price of steel jumped up and down, and the price of bearings fluctuates from top to bottom. The manufacture of bearings is cyclical. The general cycle should be two to three months. When prices keep rising, raw materials have not yet been purchased, prices have risen, and manufacturing costs have increased. In order to comply, the manufacturers must also When the price drops, the product has not yet been produced, the market price has already been lower than the previous order price, and the customer forces the manufacturer to lower the price, and the cost occurs at a high point. The price reduction means loss of profit. Manufacturers are really struggling and unable to balance.

X. Pressure of exchange rate changes

Since the implementation of the exchange reform, in October this year, less than two years, the cumulative appreciation of the US dollar against the US dollar has increased by 15.3%, almost 1% per month, which is a huge loss of profits for corporate exports. The delivery period of general orders is 2 to 3 months, and the settlement period is 45 days to 60 days. That is, the period from the confirmation of an order to the recovery of payment is about 3 to 5 months. If you do not consider the loss of exchange rate in advance, this will be no small difference. loss.

Foreign markets are also facing the pressure of exchange rate instability. The exchange rate of Russia, India and South Korea from January to October this year was all above 30%, which seriously affected their imports. These markets are also the main export markets for China's bearings.

XI. Weakness in Management

The purchase of raw materials is basically the responsibility of the relatives of the boss. They are responsible for the selection and pricing of channels. The quality assurance department does not supervise the channels and quality. It only depends on the buyer’s personal preferences and judgment standards.

Production management is not standardized, there is no scientific plan, ERP management is generally not implemented, and the scale can be adjusted to small hours. The scale is slightly enlarged, and there will be loopholes. It is either that there is no lack of production on time, or that there is no plan for production, or there is no production. , causing customers to keep complaining.

Although the average manufacturer can provide ISO9001 quality system certification, but a few are really operating according to the quality system? The certificate is basically bought for money. Without a complete quality management system, there is great uncertainty in quality assurance.

The financial management of the enterprise is weaker, the financial staff lacks professional knowledge, there is no way to effectively control the cost, and no strategic value data is available for analysis and decision making.

There are eleven difficulties in the analysis of small and medium-sized bearing enterprises, especially at present, a serious financial crisis has occurred, the European and American economies have shown significant slowdowns and declines, and the Chinese economy is also facing downward and slowing. But these small and medium-sized bearing companies have had these problems all the time. When the harsh winter of the economy arrives, these companies can safely survive the winter. This is a problem that cannot be bypassed by all business owners.