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"The path of industrialization corresponding to the world's factory, in the twenty-first century, a large country like China, may no longer be able to walk. The great development of traditional heavy industry and chemical industry will inevitably consume a lot of resources and require huge sacrifices for the ecological environment, which is difficult for China's fragile ecosystem to bear, and it is also one of the reasons why the West is calling China the world's factory while constantly making various versions of the world. Fan Wuxian said worriedly, "It's a pity that some people in China can't hear the ridicule and malice here, but feel that they have been praised by foreigners, and they feel a little complacent, which is really ridiculous!" ”

Another implication of the so-called China becoming the world's factory is that China's dependence on foreign trade has further increased, and at present, China's foreign trade dependence has reached 70 percent, while import and export trade is still growing at a double-digit rate every year.

Such an economic structure, similar to a small country, is not a large one.

The U.S. and Japan's demand is mainly domestic, not foreign, and their dependence on foreign trade is only between 20 and 30 percent. If consumer demand is overly dependent on exports, the potential economic risks and external shocks will be significant.

In economic development, China should urgently solve the problem of increasing the share of domestic demand in aggregate demand and building an open big country economy that matches the size, territory and international status of the Chinese population.

China's urbanization and industrialization, population size, and employment pressures require a manufacturing industry that can produce everything from socks to computer chips.

The factory of the world used to be a compliment in the nineteenth century, but now it is not a compliment.

The nineteenth century was the era of large-scale industrial production, and the country with the strongest industrial production capacity was the most powerful country at that time, so the world's factory at that time was also the empire on which the sun never set.

However, after entering the 21st century, the world economy is no longer an era when industry is king, and China's world factory name is just another word for foundry, which is synonymous with low added value, and by no means a sign of a strong country.

After entering the era of industrialization, the process can be materialized in machinery and equipment, the social division of labor is further refined, and the assembly line production mode has emerged. With the change of market demand and the progress of science and technology, some enterprises began to seek changes in the production mode in order to meet the needs of many varieties and small batches of products.

OEM is the production of products according to the exact specifications proposed by foreign multinational companies, and the products are acquired by multinational companies and sold to the market under their own brands.

With the further acceleration of the development trend of economic globalization, OEM demanders may select OEM suppliers in a wider range, especially to countries and regions with low processing and manufacturing costs.

In the sixties and seventies of the last century, the economic structure of developed countries changed from labor-intensive and capital-intensive to technology-intensive, and these labor-intensive and capital-intensive enterprises turned to neighboring countries and regions for development, and many countries and regions such as the Asian Tigers, Brazil and Argentina in South America have obtained huge benefits from it, and export-oriented manufacturing has been transferred to areas with lower labor costs.

"In Asia, in order to attract capital and technology, Japanese companies quickly occupy the market, the first to adopt the form of international OEM production and trade, the take-off of the Asian tigers and OEM is inextricably linked. Among them, Taiwan has already become the world's largest PC OEM base, and India has also become the world's largest computer software exporter through OEM. Fan Wuxian explained to Shen Ying as an example, "Nike in the United States, its annual sales revenue is almost two billion US dollars, but it does not have a production factory, only focuses on research, design and marketing, and its products are all foundry, and its foundry factories are mostly located in East Asia, such as China." What we lack today is not manufacturing technology, but the brains and awareness to make money. ”

Shen Ying nodded in agreement, as the owner of a series of businesses, she was also very aware of this.

For foundries, cost is the core and the key competitiveness of foundry enterprises. The cost directly determines the survival of the enterprise, and the reason is very simple: if the cost of OEM is higher than that of its own production, then why should it be foundry? In addition, management is the key, because the quality of management directly determines the cost and product quality, the management mentioned here includes financial management, personnel management, production line management and other aspects.

From an economic point of view, the foundry model is relatively simple, and the value created by the enterprise is the value of the processed products, and this value includes costs and profits, and the cost of equipment and labor is the most important cost. In other words, some of the value created by foundries is the value brought by hardware investments such as equipment and plants, and an important part is the value created by workers.

Since the cost of equipment is dead, the key to whether an enterprise can make a profit depends on the amount of value created by workers, and an important source of corporate profits is the labor cost of workers, that is, wages, benefits, etc.

China's comparative advantage in labor prices is the main factor for China's foundry industry to maintain profitability. However, the labor price advantage is not sustainable for a specific enterprise, and with China's economic development, the labor price advantage will definitely weaken.

Now, due to the rise in labor prices, many enterprises have been plagued by the decline in profit margins, and secondly, because the cost advantage originating from labor prices is the advantage of China's processing and export-oriented enterprises over similar production enterprises in other countries, rather than the unique advantage of a specific enterprise in China, so within the scope of domestic competitors, this overall advantage does not constitute the competitive advantage of specific enterprises.

The core competitiveness of a successful foundry enterprise is to minimize labor costs, and the maximization of this value often requires the strictest management, and many contradictions arise as a result.

Enterprises operating in the OEM business model must implement an operational strategy of three highs and one low, that is, high delivery speed, high quality, high flexibility and low cost. Therefore, with the tactics of 24-hour shifts, multi-variety and multi-batch mass production, rapid changeover, and relatively short product life cycle, from order receipt to delivery, customers can seize the opportunity.

OEM has a significant feature is that each position is the whole company's large machine parts and screws, the process is simple and repetitive but must be happy to follow step by step, its management model is basically paramilitary or militarized, strict hierarchy and discipline, high pressure, high obedience makes the employee's work behavior seriously lack freedom and personality.

In OEM enterprises, high-pressure management abounds, such as equipped with collective dormitories, collective canteens, etc., which can not only ensure that employees can go to work on time at any time, but also the requirements of many brand customers when placing orders, so as to maximize the efficiency of the enterprise.

"According to the logic of new institutional economics, enterprises exist because there are transaction costs in the market, and the internal command and obedience system of enterprises can save a lot of transaction costs from market negotiation to ensuring the execution of contracts, thereby reducing uncertainty and various risks in the production process. This kind of centralized management is nothing more than internalizing transaction costs, so as to achieve the peak of cost control. Fan Wuxian said with emotion, "OEM enterprises are at the end of the industrial chain, relying on compressing labor costs to make profits, resulting in the development of its management model to the extreme, which has boosted the alienation of people, semi-militarized collective dormitory life, overtime work that is voluntary on the surface but is actually difficult to get rid of, high-pressure, high-obedience work mode, and the never-ending assembly line of personal simplicity and insignificance." For every employee on the foundry assembly line, this is the worst of heaven and the best of hell. ”

"At present, most of the foreign companies in China are foundries? Especially Taiwanese companies and Japanese companies, they are basically the meanest and most oppressive factories, and I have heard people call those companies sweatshops! Shen Ying said to Fan Wuxi.

Fan Wuxian nodded and replied, "This is normal, because Japan has ruled Taiwan for 50 years, so it is in the same vein in the corporate structure, not only is the family management phenomenon serious, but also the underworld management model is also criticized, and the darkness in this is not something that ordinary people can explain clearly." ”

"However, at present, in China, can it be feasible not to engage in OEM industry?" Shen Ying asked Fan Wuxian.

After thinking about it, Fan Wuxian shook his head and said, "It's not that it can't work, but it depends on whether the role of the government is reflected?" ”

"What do you mean?" Shen Ying didn't understand the meaning of Fan Wuxi's words.

"In the past, when the market economy was first opened, there was a saying that was shouted very loudly, called "If there is a problem, find the market, don't look for the mayor, you should have heard this, right?" Fan Wuxi first asked Shen Ying a question.

"I've heard it - this is a very classic sentence, which directly pushes the company to the market." Shen Ying nodded and replied, "But what does this have to do with what you said?" ”

"Of course there is a connection—" Fan replied, "When the economy is on track, this is true, and everyone needs to have the awareness to solve the problem on their own, rather than waiting for the government to help, and the government does not have that much capacity." ”

Shen Ying nodded in agreement.

"But now that this phrase is still being used a lot, something is wrong." Fan Wuxian continued.

"Why is something wrong?" Shen Ying didn't feel that there was anything wrong with this sentence, she looked at Fan Wuxian very suspiciously, and wanted to hear him carefully explain what the difference was.

Fan Wuxi was about to speak, when his mobile phone rang again.

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