Interview — Chen Aiguo

In 2010, ASIMCO Camshaft was awarded the “Best Supplier Award” by Foton Cummins. Foton Cummins requested General Manager Chen Aiguo to deliver a speech on behalf of the suppliers at the annual procurement and supply conference, sharing how the company had dramatically improved its ranking—from last place among nearly 200 suppliers for Foton Cummins the previous year—to first place. In 2011, ASIMCO Camshaft continued its efforts and was honored with the “Best Quality Award” from Foton Cummins; In June 2011, ASIMCO Camshaft successfully supplied finished camshafts to Cummins UK and entered Cummins’ global procurement system; In October 2011, ASIMCO Camshaft became one of the first 29 designated partner units for FAW Xichai’s dedicated production line, and was also chosen as the venue for the inaugural ribbon-cutting ceremony marking the launch of this specialized production line. As General Manager Chen put it, compared with other enterprises in the group, ASIMCO Camshaft is truly tiny; some of its practices may not be applicable to other companies, and sharing them might even make other leaders laugh—there’s a sense of trepidation and humility. Yet despite its small size, this company 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, boosting production efficiency, actively developing new products, and expanding into new markets, the company has achieved leapfrog growth in sales performance—its 2010 revenue nearly doubled compared with 2009, and in 2011 it reached yet another record high. However, all of this came after enduring the pains of reform, especially during the six-month period from October 2009 to April 2010. During those six months… from “Professional Managers” to “West Point Execution” and then to “Against Liberalism” In the second half of 2009, ASIMCO Camshaft was already facing severe operational difficulties, close to insolvency. Just looking at the employees’ morale made it clear: disappointment was written all over everyone’s face, and most managers and staff were calculating when the company would shut down. Among frontline operators, roughly one-third switched jobs, one-third completed their apprenticeships and left, and one-third newly hired employees took over, learning directly from veteran workers—resulting in chaotic operations across the entire enterprise. It wasn’t that the managers weren’t willing to step up; as soon as they said something firm, some operators would immediately submit their resignation and walk away, mainly because the pay was very low (by Yizheng standards), offering no real incentives and with no visible prospects for career advancement. 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 two weeks of taking office, the factory’s operations presented General Manager Chen with one challenge after another: the casting B-line conveyor overturned, and the team worked through several nights to repair it; a single-piece horizontal machining center and a CNC cylindrical grinder both broke down, making it impossible to meet delivery deadlines, prompting round-the-clock emergency repairs; a Foton Cummins AVALON camshaft was nearly grounded due to unacceptable journal roundness; and the rework rate for finished shafts exceeded 100%. Under these objective constraints, the most common complaint was about the “damned” used equipment—frequent breakdowns, loss of precision, and complete inability to produce normally—combined with severe funding shortages that made maintenance extremely difficult. In response to this situation, General Manager Chen decided to start by boosting morale, emphasizing that there is no savior out there—only self-reliance can save oneself. He organized training sessions on Saturdays covering topics such as “Professional Managers” and “West Point Execution.” At the end of 2009, addressing the widespread problem of department heads passing the buck, blaming each other, shirking responsibility, and showing indifference, he initiated a study of Comrade Mao Zedong’s essay “Against Liberalism,” requiring every manager to analyze their own behavior in light of their actual work, engage in criticism and self-criticism, and submit a reflective essay. This was a period of intense ideological ferment, with a wide array of ideas and trends emerging. Many people were able to reflect on themselves through this study, but others held opposing views—and some even sent direct, pointed emails to General Manager Chen, arguing that if the company kept engaging in such aimless, empty talk, it would never succeed. General Manager Chen welcomed all kinds of opinions and firmly promoted corporate culture building within the company, holding individual talks with employees at all levels to gradually align thinking and build confidence. After explaining principles, he would tell stories—for example, how the Communist army, armed only with millet and rifles, managed to defeat the well-equipped Kuomintang forces. He encouraged everyone to race against themselves and reclaim the years of life wasted in previous years. ASIMCO Camshaft also organized an off-site team-building exercise for all managers and key personnel, aiming to enhance responsibility, forge teamwork, and unify thinking. During those six months… from strict quality control to implementing TPM and lean manufacturing to boost efficiency—we started racing against ourselves While unifying thinking, ASIMCO Camshaft also began racing against itself: how? General Manager Chen proposed the management philosophy that “quality is the bottom line for a company’s survival, while efficiency is the condition for its survival.” The company first focused on quality; at the time, ASIMCO Camshaft’s overall Cost of Poor Quality (COPQ) was around 25%, reflected in a roughly 75% yield of good castings on Line B—excluding entire furnace rejects; AUTO line’s yield was about 30%; and for the 100 AVALON cold-rolled ductile iron shafts initially produced, only about 35 made it to finished products, mainly due to casting defects. Given that some of the earlier data had been manipulated to obscure the true state of affairs, General Manager Chen insisted on integrity: any falsification of data would result in immediate dismissal of the person responsible. After analyzing the quality situation, everyone agreed that improving both the intrinsic and surface quality of cast blanks was an urgent priority. Accordingly, casting technicians and managers were organized to implement PDCA cycle improvements—identifying problems, analyzing them, and finding solutions. By the second half of 2010, AUTO’s yield of good parts had risen to around 90%, with the best reaching 94%. With the casting bottleneck finally under control, quality began to stabilize, paving the way for production and significantly boosting efficiency—while also validating the principle that “without quality, there can be no output”—and deliveries gradually returned to normal. Almost simultaneously, General Manager Chen also began fully implementing TPM throughout the company, encouraging all employees to conduct self-maintenance and predictive maintenance on equipment, establishing FMEA for critical equipment, and investing over two million yuan over two years to improve equipment precision, resulting in a dramatic reduction in equipment failure rates. By the third quarter of 2011, almost no equipment failures were disrupting normal production, and the excuse of “used equipment” had become a thing of the past. In early 2010, General Manager Chen set a target of exceeding 4 million yuan in monthly output value in the first half of 2010. At the time, no one dared to believe it, since with the same workforce and equipment, the workshop was producing only 2.3–2.5 million yuan per month with virtually no downtime, and even the highest monthly output had never surpassed 3 million yuan. However, thanks to lean improvement initiatives and everyone’s collective efforts, output reached over 4.2 million yuan in March 2010, which served as a powerful stimulant for the previously sluggish company. Confidence soared, and everyone was unusually excited. At this point, people began to believe in their own abilities and in their capacity to run their own businesses effectively. By the first half of 2010, employee incomes had increased by about 30%, driven by steadily improving business performance. By 2011, employee incomes were more than double what they were before the joint venture, placing them at a mid-to-upper level in Yizheng. The company’s average annual sales per employee rose year after year, reaching 2.2 times the pre-joint-venture level after two years of improvement, 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, so that everyone basically understood what needed to be done, how to do it, and what the goals were. The principle of “creating value for customers” was integrated into daily production activities. Company management centered its work around two main axes: sales externally and production internally, with every service department asked to consider how it could provide added value to support these two pillars—for example, as technical staff, what value did we create for frontline operators? As equipment maintenance personnel, what value did we bring to the workshop? What about the purchasing department?… Everyone consciously or unconsciously began measuring their work in terms of value, hoping that every task they performed would add value. Promoting “appreciation” management and mutual respect General Manager Chen says he is an optimist who doesn’t let setbacks dampen his spirits when facing work challenges or potential difficulties; when dealing with poor results, he rarely resorts to punishment for managers or employees, favoring instead an “appreciation” approach. When addressing problems, he adheres to the “three on-site” principle—“at the moment, at the scene, with the actual object”—to jointly analyze the issue and work with employees to develop solutions. General Manager 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 since rejoined the camshaft team out of admiration. In today’s challenging labor market, our workforce remains remarkably stable. After the Spring Festival, not a single employee called in sick, and everyone showed a positive, upward-looking attitude.” Over the past two years, ASIMCO Camshaft has frequently organized various activities, such as Christmas and New Year celebrations, tug-of-war and jump-rope competitions, tree-planting events, Party organization building, and the establishment of a staff activity center—all of which have strengthened the company’s cohesion and fostered a healthy, positive corporate culture. However, in his human-centered “appreciation” management style, General Manager Chen has one very strict rule: frontline employees must never be punished outright. When problems arise, the vast majority of the responsibility lies with leaders and technical managers—either inadequate training or poor management. Even if responsibility needs to be assigned, it should be split 80/20 between operators and managers. General Manager Chen makes it clear that if ASIMCO Camshaft performs poorly in the future, at least 80% of the blame will fall on him, not on everyone else. He urges managers and employees to boldly follow the guidelines, leaving the broader strategic direction to him as General Manager. This shift has replaced the previous practice of punishing frontline workers whenever problems occur, establishing a healthier “civil servant-style” corporate governance system. When a quality incident occurs, ASIMCO Camshaft stipulates that the primary person responsible shall be penalized by 30% of the loss amount; if the penalty is substantial, considering the employee’s actual income, a portion may be deducted initially, with the remainder recorded as an outstanding debt in the individual’s account (for example, if the compensation is 1,200 yuan, 300 yuan is deducted first, leaving 900 yuan as an outstanding balance). 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 endorsement and verification by the Quality Control Department, may result in exemption from the penalty. In this way, we both provide immediate education to the employee and offer them a stepping stone and opportunity for improvement; the ultimate goal is to enhance employees’ 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, our priority is to penalize improper behavior.” The Future of ASIMCO Camshaft ∙∙∙∙∙∙ Starting in April this year, ASIMCO Camshaft will launch the “Blueprint Plan,” aiming to clarify the company’s future development direction through analysis under this plan, expand production capacity, and achieve sales of between 300 million and 500 million yuan. General Manager Chen stated: “I hope that, with everyone’s concerted efforts, we can elevate the company into the top three in China within three to five years—first by becoming strong, then by growing larger—and ultimately establish ourselves as the benchmark for Camshaft design and manufacturing in the industry.” At the same time, ASIMCO Camshaft is committed to building a modern corporate management system that remains stable despite personnel changes—in short, relying on institutional management rather than personal rule. Every employee and every position must clearly understand their job responsibilities, objectives, and accountability. “Operate according to principles and exchange results”—we will refine all operational procedures and ensure that work is carried out strictly in accordance with these procedures. No one in the company enjoys any special privileges, including the general manager; clear delegation of authority ensures that all tasks are well-organized, with over 95% of work conducted according to established procedures. Managers are primarily tasked with coordinating and resolving the remaining approximately 5% of issues that fall outside these procedures, and ultimately, everything must be results-oriented—striving for perfection.