Hardware accessories prices decline Hardware companies guard against business risks

In the industrial chain of the construction machinery industry, except for suppliers of high-quality hydraulics, transmission systems, and originators, who have the absolute right to speak, other accessory suppliers are in a significantly weaker position than the entire manufacturer. According to a survey conducted by the China Construction Machinery Business Network, in April and May this year, along with the rapid decline in demand, machine manufacturers have repeatedly reduced the purchase of parts and components, and the actual purchase volume has dropped by 10% to 40% compared with the number of plans at the beginning of the year, especially for some prophets. In order to deal with market risks and maintain normal inventory turnover, leading machine manufacturers have actively reduced their consumption. Therefore, in this round of market adjustment, the level of "injury" of the accessory company is much higher than that of the whole machine manufacturer.

Hardware accessories prices decline Hardware companies are wary of business risks The persistent enthusiasm of the market in 2009 and 2010 and the pessimism of the entire machine manufacturers to instil the supporting enterprises is to expand production, expand production, and expand production. The new popular practice in the market today is to set up supporting industrial parks centered on complete machine manufacturers, and many supporting companies are invited to invest and build factories in the park, and to complete more rigorous collaboration with the whole machine manufacturers. It is not difficult to understand that this kind of practice is very beneficial to the whole machine manufacturers, not only can reduce the cost of procurement, but also can help companies improve the supporting system and strengthen their competitiveness. Another approach is that the complete machine manufacturer requests supporting enterprises to establish a logistics and warehousing center in its periphery to shorten the supply radius. Regardless of the method, supporting enterprises mainly follow the strategy of the whole machine manufacturer to stop investing and lack autonomy. In times of strong market demand, the relationship between the entire manufacturers and suppliers is often very harmonious and prosperous. When demand shrinks, due to the excessive number of transmission links, supporting companies truly realize that the market shrinks with obvious lag. According to the survey of China Construction Machinery Business Network, at the end of each year, the entire machine manufacturer will convene a supplier meeting, publish the next year's procurement specifications and consumption plans, and request suppliers to cope with consumption. The biggest problem with this kind of transmission mechanism is that the entire manufacturers often overly pessimistically treat the market demand for the next year. The amount of procurement of plans exceeds the actual demand. Local suppliers will consciously follow the purchasing plans of the entire manufacturers to stop expanding production due to the lack of grasp of the market. In response to market adjustments similar to this year's, the suppliers of parts and accessories for large-scale expansion will be very "injured." The exquisite crawler track manufacturer in 2010 has to face a wide range of stocks and sigh over the summer. Based on the market's pessimistic expectation, a joint-venture excavator manufacturer had previously cut its output in a large scale, but recently it has been forced by supplier and staff activities to restore local consumption. As far as suppliers are concerned, this kind of strategic adjustment by complete manufacturers is only for the sake of adhering to a good collaborative relationship and does not represent the real market supply and demand. Therefore, suppliers must adhere to the resuscitation of the mind and judge the changes in market demand from multiple angles to prevent the accumulation of greater operational risks.

The Japanese earthquake triggered deep consideration of the global supply chain. Because Japan occupies an insignificant position in the global manufacturing supporting system, the angle of consideration is mainly concentrated on the procurement risk of the whole machine company, and there is little sound of reverse consideration. In the construction machinery industry, some supporting companies have a high degree of customer concentration, and the sales revenue to a single customer accounts for more than 80% of the company's total revenue. This kind of company's operational risk is very large. Once the downstream purchasing companies show a shake in consumption, upstream support The risk factor of an enterprise will increase geometrically, and it will appear as a "disaster" in the short term. Therefore, with regard to ancillary industries that are already in scope, "decentralized supply" has become the homework that companies have to do. In addition, from the market structure point of view, the risk of a single matching channel is also very large, it is possible to sink the business to after-sales and maintenance of the market, in a different market level to balance income and reduce the performance of the shaken.

In the construction machinery industry, companies like Kawasaki and Isuzu in Japan have a much smaller operational risk than their domestic counterparts. The most important advantage of the former is technology and product quality. There are fewer competitors to provide the same quality, and such enterprises are often the propellers of technological innovation and are the backbone of the industry. Therefore, in the long run, the most important means of reducing operational risks is to increase their own strength from time to time, and use strong research and development capabilities and high-quality products to deal with market risks.