Three points of operation and seven points of management, how should LED companies gain benefits from management?

As the saying goes, "Three parts of operation, seven parts of management." If the entire enterprise is an army, then marketing is the "death squad" charging at the front, and management is equivalent to logistics guarantee. When the "death squads" are fighting desperately at the front, and the supplies behind are "missing" at a critical moment, then no matter how good the marketing is, it is still a castle in the air. Nowadays, in the LED industry environment of product homogeneity, overcapacity and fierce competition, what are the main management problems of LED companies?

1. The leadership’s management philosophy is confusing

The world-famous American Rand Consulting Company once said: “Of every 100 large companies that went bankrupt in the world, 85% were caused by the careless decisions of corporate managers.”

The environment is changing, the LED industry is developing, the number of competitors has changed from a few to many, and the strategic goals have also changed from the original separation of one party to the current competition in the Central Plains. Competition is extremely fierce. At this time, the magic weapon to save the enterprise is the enterprise's self-rescue, and the enterprise's self-rescue depends entirely on the business owner himself. However, some business leaders are not forward-looking and have no sense of crisis. After becoming "upstarts" during the "blowout" development of the LED industry, they became complacent and did not want to make progress. As a result, the company became smaller and smaller. On the contrary to these companies, some companies have kept pace with the times, but in order to seek profits, they play with concepts and follow fashions, and try whatever is new. What's more, they completely copy the experience of large enterprises. There is no doubt that the result of Handan's imitation is of course Nanju and Beizhi.

It is worth mentioning that some companies have "smoothed out" their management concepts, but are confused about product planning, or are unable to follow through in the face of clear product planning, giving up halfway or changing paths halfway. In addition, many companies said that the company was unable to develop well. A large part of the reason was not competitive pressure from the outside world, but the difficulty in unifying the opinions of internal senior management and changing orders overnight. For example, Shenzhen Maxtian, the company was split due to different shareholders' development concepts.

2. Product quality varies

The 20th century is the century of productivity, and the 21st century is the century of quality. Quality is the most effective weapon to peacefully occupy the market. Unfortunately, in the smoke of price war, the "weapon" used most by LED companies is not product quality, but low price, resulting in many inferior and similar products wantonly disrupting the market. Especially in the era of meager profits, unprofitable operators have no choice but to start with raw materials, reducing costs by one point. In the end, even if the product is sold, it is a "one-shot" transaction. The author believes that product quality is the foundation of an enterprise. When an enterprise does not have a unified quality management system, has a poor quality foundation, and lacks the company's quality standards and quality prevention and control plans, end users will lose confidence in the LED market, and operators can only watch the company's destruction.

3. Blind expansion of production

I believe every LED practitioner is deeply aware that after more than ten years of rapid development, especially after the investment "blowout" in recent years, my country's LED industry has experienced serious structural excess. However, many companies lack analysis and judgment of the market and believe that LED is a carnival feast, so they blindly expand production. At the same time, management cannot be planned, organized, and coordinated, resulting in reduced production efficiency, delayed orders, and uneven quality. As a result, whenever there is a disturbance in the industry, companies will be heavily in debt and have a mountain of products. In fact, to put it bluntly, the expansion of production-based management in a hurry for quick success is an attempt to achieve success in one go, and to accomplish all the results in one battle. However, with such an opportunistic production model, the enterprise will one day be destroyed.

4. Insufficient efforts in channel construction

What is a "channel"? Simply put, it means selling the products produced into the hands of consumers. At present, the LED industry usually divides channels into: traditional channels, engineering channels, hardware channels, directional channels and now the most popular e-commerce channels. There are many types of channels. As the number of competitors increases, the market will gradually enter the civilian stage. "Those who win the channels will win the world." Expanding the sales network through multiple channels will have more advantages. However, most lighting companies still stay at the dealer and agent level, while LED display companies mostly rely on engineering channels. In the information age, channel construction is obviously not enough, and information asymmetry and excessive inventory backlogs place a heavy burden on enterprises.

In 2016, difficulties will exist: the overall market size of the LED industry will slow down, industry reshuffle will continue, mergers and acquisitions will become the norm, and the situation of the big player Evergrande will further squeeze the living space of small and medium-sized enterprises. But there are opportunities. So, how should LED companies manage under the new situation?

First, follow the trend and seek development

It is said that those who understand current affairs are outstanding. LED companies must adapt to the trend but not blindly follow it. Only by integrating its own development with the development of the entire industry and relying on the development of the industry to pursue its own development can an enterprise continue in the long term. At the same time, business owners themselves must strengthen their crisis awareness, improve their ability to judge the market, and make decisions as consistently as possible.

Second, control quality

First of all, unified quality standards should be established for all departments to follow in their work; secondly, a quality prevention and control system should be established, including quality management level evaluation of raw material suppliers, raw material quality comparison, quality self-inspection of each link, and communication and coordination of quality requirements between departments; finally, the concept of quality first should be established throughout the company and quality management should be strengthened. At the same time, enterprises must increase capital investment, increase research and development of new products, increase product added value, make technological breakthroughs and innovations, form their own characteristics, and create independent core competitiveness.

Third, innovative production model

It is recommended that the company be equipped with a production management personnel with overall planning and coordination capabilities, and formulate a production-centered management mechanism for organizing, coordinating, and supervising production. Enterprises must break out of the old thinking mode and the constraints of the traditional order production model, and use Internet thinking to explore new production profit models, develop new markets, and find profit growth points.

Fourth, do a good job in channel construction

On the one hand, do a good job in building the dealer system and handle the partnership with suppliers; on the other hand, we should grasp the current good situation of the Internet. The Internet is the future development trend and a new entry point for corporate channel construction. Enterprises should combine "Internet +" with the LED industry, plan layout, and constantly create new products, new businesses and new models.

2016 is the first year of the official implementation of the "Thirteenth Five-Year Plan", and it is also a critical year for supply-side reform. The strategic measures proposed by the Central Economic Work Conference to "cut overcapacity, destock, deleverage, reduce costs, and make up for shortcomings" will bring huge opportunities to our LED industry. We hope that while LED companies are laying out their development strategies, they will also be highly introspective about their internal management issues.