Jiangsu Changling Hydraulic Co., Ltd. was established in December 2006 with a registered capital of 97.3334 million yuan. It was listed on Shanghai Stock Exchange on on March 22, 2021. The company is a national high-tech enterprise, national high-tech enterprise, integrating research and development, production and sales of hydraulic components of engineering machinery. Its main business is two major sectors: 1. R&D, production and sales of hydraulic components and parts, including central slewing joints, tensioning devices, slewing reduction devices, hydraulic valves, etc.; 2. Production, processing and sales of precision castings, including compressor castings, engineering machinery castings, automobile parts castings, and industrial parts castings, etc., which are widely used in construction engineering, mining, offshore operations and other fields.
Business model:
(1) Procurement model
The raw materials required by the company to produce include steel, castings, forgings, etc., and the supply department is responsible for purchasing. The Supply Department first selects several suppliers as alternative suppliers for the main raw materials. After comprehensively examining the supplier's reputation status, supply speed, supply quality and credit cycle, it is generally selected to cooperate with more than two suppliers. In actual procurement, the company will adopt different procurement strategies based on the characteristics of raw materials or parts and market supply and demand, and purchase according to orders by signing an annual framework agreement or batch contract. After receiving the material demand plan, the Supply Department inquires about the supplier that has established a cooperative relationship and selects a suitable supplier to issue a purchase order. Some raw materials and parts may make procurement plans based on sales expectations, production plans and considering safe inventory, etc., and the purchase order shall prevail.
Company has formulated a supplier management system and established a stable cooperative relationship with major raw material suppliers, ensuring the quality stability of the company's raw materials and the timely supply. When developing a new supplier, the supply department needs to understand the supplier's product quality, enterprise information, after-sales service and other details, and the quality inspection department, technical department, production and other departments assist them in conducting joint inspections. Only by passing sample inspection and small batch supply tests can the product quality be included in the qualified supplier list.
(2) Production model
According to the characteristics of the company's industry, the company has determined a production model that mainly focuses on "sales and production". According to the customer's sales order, the sales department and the production and manufacturing department confirm the production quantity through the production and sales meeting, enter the data into MRP operation, and pass the purchase requisition form generated by the procurement plan to the supply department, which is responsible for collecting materials and producing the production.
"Sales-based production" model allows the company to arrange production plans based on the specific sales orders obtained, which is conducive to improving the efficiency of the company's production equipment and reasonably allocating the work of production and technical personnel; at the same time, the company formulates raw material procurement plans based on the production plan, which can effectively control the inventory quantity and procurement price of inventory and maximize the company's operating efficiency.
(3) Sales model
The company's downstream customers are mainly well-known domestic and foreign companies such as Sany Heavy Machinery , XCMG Group , Liugong Machinery, Carterbil, Zhejiang Dingli , Terex and other well-known domestic and foreign companies, adopting the direct sales model. In terms of sales areas, during the reporting period, the company's products were mainly sold domestically, while the remaining small amounts were sold overseas.
Company signs a framework contract with such customers every year, and the customer places an order during the contract period. For downstream potential customers, the company's sales department organizes professional teams to develop and sell services. Generally, by visiting customers and collecting business information, on this basis, feasibility analysis of business opportunities and customer needs is conducted, and evaluates whether the company's supply capacity can meet customer needs, and then participates in business negotiations, etc., and then reaches an agreement to sign a sales contract and obtain sales orders. Taking the supplier system included in the customer as the core of sales work, once it passes customer certification and enters the supply system, the company will organize and expand all-round services and cooperation with the customer, such as technology, quality, and business.
Source: company official website, 2022 semi-annual report.
