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Breaking Down Walls, Teaming Up, and Collaborating to Break Through the Global Market

In July of this year, the “Shandong Heavy Industry Wind” swept the Latin American market: in Peru, Weichai and Modasa Group signed a cooperation agreement, and China National Heavy Duty Truck (Peru) Co., Ltd. was officially established; in Chile, 895 Zhongtong pure electric buses were successfully delivered.

The global manufacturing industry is currently facing a “cold winter”: supply chain restructuring, volatile raw material prices, and intertwined geopolitical risks. The domestic automobile and equipment manufacturing industries are facing an intensified “involution,” with many manufacturing companies already facing losses in the first half of the year.

Shandong Heavy Industry’s ability to break through the market downturn is based on excellent product quality, but the more crucial secret lies in its internal management mechanisms: “breaking down walls, teaming up,” breaking down the “walls” between affiliated companies and departments, and transforming the advantages of “working independently” into the viability of “collaborating together to break through.”

This shift in thinking is essentially a clear understanding of the logic of market competition: Traditional manufacturing companies can compete by relying on products and prices; however, in modern global competition, they must rely on ecosystems and collaboration to gain a foothold.The deeper issue underlying this is where state-owned enterprise reform will proceed next.

During the previous three-year campaign for state-owned enterprise reform, breakthroughs were achieved in reforms to the three systems, effectively removing some deep-seated institutional and mechanism barriers. The new round of deepening and upgrading state-owned enterprise reform is building on this momentum, with strengthening market-oriented mechanisms as the key, bringing vitality and efficiency to the forefront.

Dynamism and efficiency are most evident in unfamiliar overseas markets. When companies expand overseas, the most common challenge is that they each “sweep the snow in their own doorstep,” making it difficult for them to leverage each other’s strengths. To break this impasse, Shandong Heavy Industry Group (SHIG) initiated a breakthrough in its systems and mechanisms in 2021, gradually developing four feasible and replicable collaboration models: “direct collaboration,” “indirect collaboration,” “project collaboration,” and “platform collaboration,” addressing the issue of poor resource sharing among affiliated companies.

“Direct collaboration” enables direct business connections between affiliated companies; “indirect collaboration” serves as a resource bridge to maximize customer value; “project collaboration” focuses on major partnership opportunities, with internal companies forming teams to participate; and “platform collaboration” leverages established channels or localized platforms to reduce overseas expansion costs.

“Quantitative incentives” played a key role in the implementation of this mechanism. The “SHIG Group Export Collaboration Incentive Policy” transforms the vague concept of “collaborative contribution” into clear and calculable “performance indicators,” accurately calculating incentives down to the “per product” level. All incentives are distributed directly to frontline sales representatives, with no upper limit. “Helping used to be a ‘favor,’ but now it’s ‘duty plus profit.’ Good work is rewarded with real money, and everyone has naturally gone from being ‘pushed along’ to ‘taking the initiative,’” said Ding Wei, Deputy Director of the International Business Department of Shandong Heavy Industry Group.

This “breaking down walls and forming teams” approach has yielded tangible results. From January to July this year, Shandong Heavy Industry’s export revenue increased by 5.1% year-on-year. Heavy truck exports accounted for 62% of the national industry total, while light truck exports grew by 79% year-on-year. Within regional markets, with the exception of the Commonwealth of Independent States, growth was widespread, with Asia Pacific, the Middle East and Africa, the Americas, and Europe seeing year-on-year increases of 34%, 25%, 47%, and 38%, respectively.

Reform is more than just optimizing a process or adjusting an organization; its essence is to transform people’s perceptions, mindsets, and behaviors. Faced with a severe and complex domestic and international environment, the province’s state-owned assets and state-owned enterprises have withstood the pressure and improved quality and efficiency: the main tasks of the state-owned enterprise reform and upgrading action at the provincial level have been basically completed. From January to July, the labor productivity and operating cash flow rate of provincial enterprises increased year-on-year, the three expenses decreased by 5.5% year-on-year, and fixed asset investment increased by 18.5% year-on-year.