Chapter 32 process reengineering

After relying on low-cost manufacturing to gain a certain market position, Huawei realized that the cost of products is not only reflected in the level of manufacturing costs. The IBM consultant team pointed out in a 1999 research report that there was a big gap between Huawei's supply chain management level and leading multinational companies: First, Huawei's order delivery rate was only 50%, while the industry-leading multinational companies' average The second is that Huawei’s inventory turnover rate is only 3.6 times a year, while the average of multinational companies is 9.4 times a year; the third is that Huawei’s order fulfillment cycle is as long as 20 to 25 days, while the average level of multinational companies is about 10 sky. IBM consultants pointed out that Huawei's supply chain management has only exerted 20% efficiency, and there is a lot of room for improvement.

In fact, the low efficiency of supply chain management is a common problem among Chinese manufacturing companies.Although Huawei pays great attention to reducing manufacturing costs, it only focuses on the manufacturing process itself, and pays little attention to cost and efficiency issues outside the manufacturing process, resulting in comprehensive operating costs that are often out of control. Xiang Bing, a well-known economist and dean of Cheung Kong Graduate School of Business, once pointed out: "Our emphasis on the importance of 'chain-to-chain competition theory' not only reminds Chinese enterprises to pay attention to how to improve the control of the industrial chain, but more importantly, Improve the 'end-to-end integration', that is, how Chinese enterprises should rely on their own unique competitive advantages to integrate resources such as raw materials, manufacturing, channels, and brands in various industrial value chain links from raw material procurement to customer management."

The implementation of "supply chain management and process reengineering" in Huawei quickly caused a lot of controversy, and at one time caused Huawei's market response to slow down significantly.Ren Zhengfei asked, "We must first rigidify, then optimize, and then solidify, and promote the implementation of integrated product development."In the end, Ren Zhengfei's strong driving force and personal charisma made this arduous process change project continue to be implemented. He always believed that using the most dogmatic method to promote this change may not be the most perfect, but it is indeed the most effective in Huawei .Ren Zhengfei firmly believes that only by systematically absorbing IBM's things first can we truly understand what is suitable for Huawei, and we can also see clearly what problems Huawei has that need to be improved, and then continue to promote changes from the perspective of the entire enterprise environment.

When Huawei's business process transformation was finally implemented under the firm push of Ren Zhengfei, many noticeable changes took place in the company.If this change initially manifested itself as turmoil within Huawei, then after 2000 when Huawei actively expanded its global business, it played a role in improving Huawei’s management capabilities in the upstream (suppliers) and downstream (customers) of the industrial value chain. The global docking that is revealed is relatively hidden.Perhaps, this kind of process change is like a "world language" of the industry. When you master it, you don't think it is very important; if you don't master it, you can only communicate in a primitive way.Many Chinese manufacturing companies are mostly engaged in OEM production for multinational companies. In Ren Zhengfei's view, this is the simplest way of industrial division of labor.

Sorting along the customer value creation chain, opening up the end-to-end process, solidifying these verified and stable running processes into the enterprise information system, making the management of these processes electronic, and fixing the data they run in the database, Realize the most concise, most standardized, and least emotional control from client (demand) to client (supply) to effectively communicate and get rid of dependence on people. Now, wherever the organization is, Huawei's IT supports it. It covers the whole world, and all Huawei employees can enjoy the services of this system. This is an enterprise information network established by Huawei.In other words, almost all of Huawei's basic administrative and business operations processes can now complete communication, information sharing, business approval, and cross-departmental coordination in real time, regardless of geographic location or business process links.15,000 R&D personnel distributed in various countries and regions can conduct 7×24 hours of global synchronous R&D and knowledge sharing; employees who work or travel around the world can use the online reimbursement system anytime and anywhere to complete the expense settlement within 7 days and personal cash flow.The entire Huawei company has realized the "four unifications" of systems, processes, coding, and forms in financial management. Through the establishment of a global financial sharing center in the financial system in ERP, it has the ability to complete financial information convergence and settlement within 4 days.

Huawei's customers, partners, and employees can freely arrange online learning and training exams 24 hours a day, and use online recruitment and online assessment; through the one-card system connected to each office area, the Human Resources Department can accurately assess 30,000 people every day Management, accurately incorporate data into monthly salary and welfare calculations; EPR system, realize end-to-end integrated supply chain, so that supply chain managers can perform calculations of supply and demand and production planning twice a day, with "days" as the cycle To flexibly and quickly respond to market changes, customers can also query and track the status of order execution online; the global video conference system saves 30 million yuan in travel expenses every year and greatly enhances timeliness; Huawei is the first company in China to pass BS7799 information security With international certification and the establishment of a proactive security prevention and monitoring management mechanism, Huawei’s intellectual property rights and confidential information are gradually protected; service engineers at the customer’s site can access the customer’s engineering files and related knowledge and experience cases online at any time, Initiate online and obtain timely technical and service coordination from the company's headquarters or regional departments. Engineers who go alone no longer feel isolated and helpless.