Interview — Chen Aiguo

In 2010, ASIMCO Camshaft won the “Best Supplier Award” from Foton Cummins. Foton Cummins asked General Manager Chen Aiguo to deliver a speech on behalf of the suppliers at the annual procurement and supporting conference, discussing how the company had risen from the bottom of the comprehensive evaluation ranking among nearly 200 suppliers of Foton Cummins in the previous year to the top spot;

In 2011, ASIMCO Camshaft once again won the “Best Quality Award” from Foton Cummins;

In June 2011, ASIMCO Camshaft successfully supplied finished Camshafts to Cummins UK and was incorporated into Cummins’ global procurement system;

In October 2011, ASIMCO Camshaft became one of the first 29 designated units for FAW Xichai’s dedicated production line, and was also selected as the venue for the inaugural on-site unveiling ceremony of the dedicated production line.

As Mr. Chen put it, compared with other enterprises in the group, ASIMCO’s Camshaft division is truly tiny; some of its practices may not be applicable to other companies, and sharing them might even make other leaders laugh, leaving one feeling both humble and apprehensive. Nevertheless, this small enterprise boasts an exceptionally high-quality customer base: FIAT Global, FAW Xichai, and CUMMINS Global are its top three customers, accounting for 41%, 32%, and 26% of its sales, respectively. By rigorously focusing on product quality, enhancing production efficiency, actively developing new products, and expanding into new markets, the company has achieved leapfrog growth in sales performance—its 2010 sales nearly doubled compared with 2009—and even set a new record in 2011. However, all of this came at the cost of the pains of reform, particularly during the six-month period from October 2009 to April 2010.

Over the past six months… from “Professional Managers” to “West Point Execution” and then to “Against Liberalism.”

In the second half of 2009, ASIMCO Camshaft was in dire straits, nearly insolvent. Just look at the employees’ morale—disappointment was evident on everyone’s face. Most managers and staff were wondering when the company would shut down. Among the frontline operators, about one-third had already quit, another third had completed their apprenticeships and left, and the remaining third had just started working, learning from experienced journeymen who were now working independently. The entire operation was in complete disarray. It wasn’t that the managers weren’t trying to manage; as soon as they said something firm, some operators would immediately submit their resignation letters and leave. The main reason was the very low pay (by Yizheng standards), which offered no incentive and showed no prospect of career development. In response, ASIMCO Group decided to restructure the company, shifting from wholly owned operation to a joint venture with Yizheng Piston Ring Factory. At the recommendation of the Chinese shareholder, in October 2009, Chen Aiguo, Deputy General Manager of ASIMCO Shuanghuan, was appointed General Manager of ASIMCO Camshaft.

Within less than half a month of taking over, Factory Production Operations delivered one “wake-up call” after another to General Manager Chen: the track on Casting Line B overturned, and the team worked through several consecutive nights to repair it; a single-unit horizontal machining center and a CNC cylindrical grinder broke down, making it impossible to meet delivery deadlines, so they had to rush repairs around the clock without a break; the Camshaft for Foton Cummins AVALON was almost shut down by the customer due to unqualified journal roundness; and the rework rate for finished shafts exceeded 100%. Constrained by objective conditions, the most common complaint was about the “damned” second-hand equipment—such equipment frequently breaks down, loses precision, and simply cannot support normal production. On top of that, with limited funds, maintenance is extremely difficult to carry out properly.

In response to this situation, General Manager Chen decided to start by boosting morale, emphasizing that there is no savior in this world—only each individual can save themselves. Over several Saturdays, he organized training sessions on topics such as “Professional Management” and “West Point Execution,” held at the company. At the end of 2009, in light of the widespread problems among department heads—such as shirking responsibility, blaming one another, irresponsibility, and indifference—he initiated a study of Comrade Mao Zedong’s essay “On Opposing Liberalism.” All managers were required to conduct a self-examination in light of their actual work, engage in criticism and self-criticism, and submit a reflective essay. This was a period of intense intellectual ferment, with a wide array of ideas and trends flourishing. Through this study, many people were able to reflect on themselves; however, some held opposing views, and a few even sent direct, pointed emails to General Manager Chen, arguing that if the company continued to engage in such aimless, empty rhetoric, it would surely fail.

Mr. Chen is open to all kinds of ideas and steadfastly promotes corporate culture building within the company. He has held heart-to-heart talks with employees at all levels, gradually aligning their thinking and boosting their confidence. After explaining the principles, he would tell stories—such as how the Communist army, armed only with millet and rifles, managed to defeat the well-equipped Nationalist army. Mr. Chen encourages everyone to race against themselves and make up for the years of life wasted in the past. ASIMCO Camshaft also organized an outdoor team-building activity for all cadres and managerial backbones, aiming to enhance their sense of responsibility, forge team spirit, and unify their thinking through such activities.

Over the past six months, we have shifted our focus from stringent quality control to implementing TPM and lean manufacturing to boost production efficiency—essentially racing against ourselves.

While aligning thinking, ASIMCO Camshaft began to race against itself. How should it run? General Manager Chen put forward the management philosophy: “Quality is the bottom line for a company’s survival, and efficiency is the condition for its survival.” The company started with quality. At that time, ASIMCO Camshaft’s overall Cost of Poor Quality (COPQ) was as high as about 25%, reflected in the fact that the yield of qualified blanks on Line B was only around 75%, not even counting the entire furnace being scrapped; the yield on the AUTO line was about 30%; and when 100 pieces of AVALON chilled ductile iron shafts were put into production, only about 35 made it to finished products, mainly due to casting defects. Given that some of the preceding information had been manipulated to conceal the true state of the problem, General Manager Chen demanded integrity from everyone: no matter what the data, anyone found to have falsified it would be immediately dismissed.

After analyzing the quality situation, all parties unanimously agreed that improving both the internal and surface quality of cast blanks was the top priority. Accordingly, a PDCA-based improvement cycle—identifying and pinpointing problems, analyzing them, and then implementing solutions—was instituted for casting technicians and managers. By the second half of 2010, the first-pass yield for AUTO-brand parts had reached approximately 90%, with the best performing batches achieving as high as 94%. With control over the key casting processes firmly established, quality began to stabilize, paving the way for smoother production and delivering substantial efficiency gains. This also validated the principle that “without quality, there can be no talk of output,” and delivery schedules gradually returned to normal.

Almost simultaneously, General Manager Chen also initiated a company-wide rollout of TPM, engaging all employees in self-maintenance and predictive maintenance activities for equipment, establishing FMEAs for critical assets, and investing over RMB 2 million over two years to enhance equipment accuracy. As a result, equipment failure rates plummeted. By the third quarter of 2011, virtually no equipment failures were disrupting normal production, and the excuse of “using second-hand equipment” had become a thing of the past.

In early 2010, General Manager Chen set the ambitious goal of achieving monthly output value exceeding RMB 4 million in the first half of the year. At the time, few dared to believe it, as with the same workforce and equipment, the workshop had been operating with virtually no downtime, yet its monthly output consistently hovered between RMB 2.3 million and RMB 2.5 million, with the highest monthly figure never surpassing RMB 3 million. However, thanks to lean improvement initiatives and the concerted efforts of the entire team, output surged to over RMB 4.2 million in March 2010, injecting a much-needed boost into an otherwise sluggish company. Morale soared, and everyone was exceptionally energized. It was at this point that employees began to trust their own capabilities and felt confident they could successfully run the business. By the end of the first half of 2010, employee incomes had increased by approximately 30%, driven by steadily improving operational performance. By 2011, average annual compensation had more than doubled compared with pre‑joint‑venture levels, placing the company among the top tier in Yizheng. Per‑employee annual sales revenue has risen year after year; after two years of continuous improvement, it now stands at 2.2 times the pre‑joint‑venture level, and the company has remained profitable ever since the joint venture was established.

During the six-month period from October 2009 to April 2010, ASIMCO Camshaft conducted a variety of training programs to clarify work methods and align thinking among employees, ensuring that everyone had a clear understanding of what needed to be done, how to do it, and what the objectives were. The principle of “creating value for customers” was integrated into daily production activities. Company management centered its efforts on two main pillars: sales-oriented external operations and production-oriented internal operations. Every service department was encouraged to consider how to provide value-added services to support these two pillars—for example, what value do technical personnel create for frontline operators? What value do equipment maintenance personnel bring to the workshop? And what about the procurement team? In this way, employees—consciously or unconsciously—began to evaluate their work in terms of value, striving to ensure that every task they perform adds value.

Promote “appreciative” management and mutual respect.

General Manager Chen describes himself as an optimist who never lets setbacks dampen his spirits, whether at work or in the face of potential challenges. When outcomes are less than ideal, he rarely resorts to punitive measures against managers or employees; rather, he emphasizes a culture of recognition and appreciation. In addressing problems, he adheres to the “three ‘on-site’” principle—on-the-spot, at the scene, and with the actual materials—and works collaboratively with staff to analyze issues and co-develop solutions.

Mr. Chen told us: “Within the company, whether you’re a manager, a frontline operator, or a janitor, everyone gets along well. In fact, respecting others is also respecting yourself. Many former employees who had left the company have even rejoined the Camshaft team out of admiration. In today’s challenging labor market, our workforce remains remarkably stable. Since the Spring Festival, not a single employee has taken leave, and everyone has demonstrated a positive and motivated attitude.” Over the past two years, ASIMCO Camshaft has frequently organized a wide range of activities, such as Christmas and New Year gala dinners, tug-of-war and jump-rope competitions, tree-planting events, Party organization development, and the establishment of an employee activity center. These initiatives have strengthened the company’s cohesion and fostered a healthy, upward-looking corporate culture.
 
However, in the human-centered “appreciation” management approach, President Chen has a very strict rule: it is not allowed to simply punish frontline employees. When problems occur, the vast majority of the responsibility lies with leaders and technical managers—either due to inadequate training or ineffective management. Even if responsibility must be assigned, the ratio should be 80/20 between operators and managerial staff. President Chen made it clear that in the future, if ASIMCO Camshaft performs poorly, at least 80% of the responsibility will rest with him, not with everyone else. He requires that managers and employees boldly carry out their tasks according to the requirements, while he, as the general manager, will take charge of the overall direction. In this way, the previous practice of punishing frontline employees whenever a problem arose has been changed, establishing a healthier corporate “civil service system.”

When a quality incident occurs, ASIMCO’s Camshaft Division stipulates that the primary person responsible shall be penalized by 30% of the loss amount. If the penalty amount is substantial, considering the employee’s actual income, a portion may be deducted first, with the remainder recorded as a personal outstanding debt (for example, if the compensation is RMB 1,200, RMB 300 is deducted initially, and the remaining RMB 900 is recorded as an outstanding debt). If, within six months, the employee’s quality awareness and quality control capabilities improve, the employee may submit an application, which, after obtaining the workshop’s opinion and being verified by the Quality Control Department, may result in exemption from the penalty. In this way, we not only provide on-the-spot education to employees but also offer them a stepping stone and opportunity for improvement, with the ultimate goal of enhancing their overall competence through such incidents. Penalties are not the end in themselves; they are merely a means to achieve the objective of improving employee quality. General Manager Chen has repeatedly emphasized: “We do not focus on punishing the outcome of mistakes; rather, we focus on penalizing incorrect behavior.”

The future of our ASIMCO Camshaft…

ASIMCO Camshaft will launch the “Blueprint Plan” in April this year, aiming to clarify the company’s future development direction through analysis under the plan, expand production capacity, and achieve sales of RMB 300–500 million. Mr. Chen said: “I hope that, with everyone’s efforts, we can rank among the top three camshaft manufacturers in China within 3–5 years—of course, by first becoming stronger and then bigger, and ultimately setting the benchmark for camshaft design and manufacturing in the industry.”

Meanwhile, ASIMCO Camshaft is committed to establishing a modern corporate management system that remains stable despite personnel changes—essentially relying on institutional governance rather than personal rule. Every employee and every position clearly understands their job responsibilities, objectives, and accountability. The company operates on the principle of “acting according to principles and exchanging results,” continuously refining all operational processes and ensuring compliance with these procedures. No one in the company enjoys special privileges, not even the general manager. Clear delegation of authority keeps all operations well-organized, with over 95% of tasks carried out in accordance with established procedures. Managers are primarily responsible for coordinating and resolving the remaining approximately 5% of issues that fall outside these processes, always with a results-oriented approach aimed at achieving near-perfection.