Last year, Vietnam broke out and closed the city. The shoemaking industry was severely damaged, and many manufacturers went bankrupt and exited.
However, the outdoor shoe king "Yuqi" has grown against the trend. In the first quarter of this year, its profit increased by 66.9%, ranking first among the three shoemakers. The secret behind this lies in Chairman Lin Wenzhi’s “unpopular strategy”.
Resigned from Fengtai, a major shoe manufacturer
"Because it is difficult to do, and everyone does not do it, I have a chance."
In 1995, Yuqi International Chairman Lin Wenzhi and his wife Liao Fangzhu (currently Yuqi General Manager) jointly started a business. In order to survive, it avoids the highly competitive sports shoe market and specializes in the field of outdoor shoes.
Nowadays, Yuqi has become a major manufacturer of outdoor shoes. It produces thousands of shoes for hiking in the mountains and sea, walking on snow, crossing streams, riding heavy machines, and rock climbing. It has more than 50 brand customers, such as The North Face, Columbia, etc. "Our company is very famous, because it sells to exports and is relatively unknown in China." Lin Wenzhi said confidently.
Therefore, when many shoe factories were hit by Vietnam's lockdown in 2021 and faced bankruptcy, Yuqi's revenue grew against the trend, and it even won orders from 15 new brand customers. In the first quarter of this year, Yuqi’s net profit after tax increased by 66.9% year-on-year. Significantly surpassing Baocheng and Fengtai, ranking first among the three heroes in Taiwan's shoe industry.
The year 2000 can be said to be a key watershed for Yuqi. After Lin Wenzhi devoted himself to studying the manufacturing of outdoor shoes, he discovered that truly good shoes must be able to prevent water from entering and sweat from the inside. One of the key materials is Gore-Tex, so it took him a year to obtain the certification.
Lin Wenzhi, who once served as the vice president of Fengtai Enterprise (a major sports shoe manufacturer), said that sports shoe OEM is mass production, and the characteristics of outdoor shoes business are small and diverse, and many processes rely on manual labor. There are often 1,000 pairs of shoes per order, which are then divided into 12 sizes. Sometimes there are less than 100 pairs of one size. Not only do the production lines change frequently, but maintaining quality is also a big challenge.
"I am a very positive person and a very good person at work." As for how to convey this persistence and enthusiasm to the 35,000 employees scattered in Taiwan, mainland China and Southeast Asia, "Our company has strong leadership. You must have good discipline."
Good health, cold origin, and survived the epidemic
However, the outbreak of the epidemic in 2020 disrupted the supply of the global shoe industry; it will be even worse in 2021, when Vietnam ordered South Vietnam to close the city, which forced A large number of shoe factories have stopped working.
"On the one hand, I am worried, but at the same time I am very happy," Lin Wenzhi said with a smile. When the crisis comes, it really tests the manufacturer's physical fitness and resilience, and also gives Yuqi a niche to grab the market.
In 2021, many shoe factories with poor health have closed down and closed their stalls. However, looking back at Yuqi, its net profit after tax in 2021 bucked the trend and increased by 32% annually, which is the envy of its peers.
Lin Wenzhi analyzed that there are two keys to Yuqi’s victory. The first is physical fitness. In the past, Yuqi produced outdoor shoes. Its employees have long been accustomed to the rapidly changing environment, and its yield rate is higher than that of its peers, so it has naturally become the first choice for brand transfer orders.
"At that time, I asked the customers to fully cooperate with whatever they said," Lin Wenzhi said. Although orders were changed every day and meetings were held every day, he had to endure it in order to survive the crisis.
At the same time, Lin Wenzhi also quickly initiated epidemic prevention measures and purchased a large amount of induction disinfection equipment, masks, and vaccines immediately to avoid large-scale shutdowns due to the epidemic.
Secondly, if you look at the production bases of Yuqi, you will find that they are cleverly staggered with the production centers of the same industry, thus avoiding the storm of gatherings of peers and group epidemics.
"My personality is to stay in the unpopular and not join in the fun." Lin Wenzhi said that in 1995, when all the peers were rushing to set up factories in Guangzhou, Yuqi set up its first factory in the relatively unpopular Quanzhou .
Although Guangzhou has convenient transportation and a complete supply chain, too many shoe factories have rushed in, which has caused the local area to face a shortage of workers and a sharp reduction in production dividends. Therefore, Lin Wenzhi overcame everyone's opinions and chose Quanzhou, which no one went to.
The same is true in Vietnam. When peers in the industry were rushing to enter Ho Chi Minh City , Lin Wenzhi once again found another way and went to Hung Yen Province near Hanoi that no one had ever been to.
Don’t look at short-term profits and losses, and focus on automation.
Since Yuqi has long-term investment in automation and high employee unit output value, even if an employee is diagnosed with the disease, the production capacity can still be better than that of its peers.
Faced with this year’s war that has pushed up raw materials and inflation and compressed consumption, Lin Wenzhi is not too worried. Firstly, customer inventory levels are still low; secondly, as Europe and the United States unblock, the demand for outdoor shoes will not disappear. On the contrary, the shortage of workers is a problem, which may cause long-term worries about the supply of shoemaking in the future.
We have our own ERP (enterprise resource planning) system. After receiving the order, it will be converted into internal data of the company. It can automatically run internal orders and control them through computerization. We can know what the materials requested by 50 customers individually look like and follow their identities. It's the same as the certificate, just type in the code and do it all by computer.
Next, I emphasize the per capita output value, how much each person does per hour, very strict requirements on KPI (key performance indicators), and analyze everything down to the smallest detail. If someone complains that the standard is too strict, re-analyze each link and adjust the expected output value that suits him.
Generally speaking, automation is just about pressing buttons, but there is no way to automate one stitch and one line. Many small parts are grouped together, and computers and robotic arms can't do anything about it. It's just that people don't have to work so hard in certain processes. There used to be three people operating the machines, but now one person is looking after three machines. I'm "skipping" work. In the process of deletion, merger, reorganization and simplification, whether the functions and functions have changed must be returned to the laboratory for scientific verification.
Although the external crisis cannot be changed, Lin Wenzhi is confident, "As long as the factory itself is strong, even viruses and crises are threats at most and will not cause illness." Now, Yuqi is also looking for the next generation of automation technology to Continue to develop unique unpopular strategies.
