It is a long way from the head office of Geely Automobile in Hangzhou to the base in Ningbo just put into operation in September, 2011, but Ningbo is the perfect location for Geely's future development. Geely, China's biggest homegrown automaker, is undergoing transformation, which is seemingly a long fight but will benefit the company longer.

Manage according to indicators of the leading carmakers

The "Kanban Management" system Geely adopts is different from that implemented in other auto enterprises. On the Kanban in the workshop of Hangzhou Bay plant, there are varieties of forms that make up a set of integrated and sophisticated management system for quality improvement, codenamed Project GGQ353, the "footstone" for the third stage of Geely's strategic transformation.

"The Project GGQ353 aims to make the compensation claims amount of each Emgrand car down by 50 percent and targets at the Initial Quality Study (IQS) top three in China's automobile industry，including joint ventures, through joint effort of any division of the brand," said Wu Guoda, the vice general manager of Hangzhou Bay plant in Ningbo. Although Wu is in charge of promoting the project and has worked for it at the very beginning, the specific indicators for the Project GGQ353 are too many for him to remember. "Probably hundreds of specific indicators! The core value is ‘to manage according to indicators to achieve better performance'."

On a Kanban in its stamping factory, there is a big form full of varieties of statistics, including the production status when putting into operation, the objectives in 2012, the objectives of GGQ535 and the monthly objectives in 2012. The relative statistics of the leading automobile enterprise can be found in the form as pursuing targets.

The relative statistics of the leading automakers in the world, like Toyota, Hyundai and GM, will be put into the form. The idea of "manage according to indicators" was raised by An Conghui, the newly appointed CEO of Geely. The Project GGQ353 was officially launched as Hangzhou Bay plant was put into operation on September 9, 2011.

In each working team producing the stamping parts, we can see the similar Kanbans full of more specific data. The idea of Project GGQ353 initiated by An is being practiced in Geely. At the same time, the research and development system is under upgrade.

From Stage 1.0 to 3.0

The R&D system of Geely with only more than ten years' car manufacturing history has experienced three stages.

During the Stage 1.0, all its R&D institutions, including technical centers, research institutes, and academy of engineering scattering in each base of Geely, fought independently to develop new products. Since Zhao Fuquan, the current head of R&D of Geely, took the vice president post in 2006, Geely's R&D system had entered into the Stage 2.0.

Zhao integrated the scattered R&D institutions and established a research institute containing different centers set up on the basis of several automobile assemblies. Then, Geely set up five technology platforms, five product platforms and forty-two new-model R&D programs.

From the end of the year 2011, the R&D system of Geely had embraced new adjustment. "Geely will move from the product line management model, the business entity of which is factory, to brand management model with the brand company as the business entity", confirmed by Yang Xueliang, the Public Relations Director of Geely Automobile.

The Stage 3.0 of the R&D system is more like the integration of 1.0 and 2.0. The "Visible" work like styling and interior are sectioned and assigned to each sub-brand and R&D centers are located on each production base. The research institute of Geely retains the "invisible" work like chassis and engines.

The vice president of research institute He Wei, also the head of division of project management of Emgrand, governs 35 project managers who take charge of subprojects. Geely has the other two heads of division of project management taking charge of Englon and Gleagle, the other two sub-brands of Geely.

"It is a kind of ‘seller and buyer relation' between the brand division and research institution of Geely Automobile", Wu Gouda said. The Hangzhou Bay plant where Wu worked, as a part of Emgrand brand division, is in charge of proposing the product planning and reporting it to the research institute which is in charge of R&D. The Emgrand business division is responsible for selling newly developed products. The earning of each personnel participating in the developing and selling of the brand are determined by the market performance of the product.

This management mode makes the management procedures to research and develop a product more sophisticated, but the problem of how to define the responsibilities has arose as the R&D work is taken over by different business entities.

The research institute of Geely has a set of evaluation system. The "IOINPUT AND OUTPUT" management created by President Zhao Fuquan is used to supervise each R&D procedure. The situation of each procedure will be recorded in the computer for review and defining the responsibilities. "President Zhao knows better than anyone else what is most suitable for Geely," He Wei said.

Vitality, the driving force for transformation

"Geely automobile is a flexible enterprise. Our R&D will be changed to meet the changing demands of the market. We are fine with that," Yang Xueliang said.

The corporate culture building, which is easy to be ignored by Chinese companies, is always valued by Geely. The "Vitality" is an important part of corporate culture in Geely automobile.

An Conghui worked hard on how to increase the "Vitality" of Geely when he was the general manager of the Ningbo base. He found that the improvement of the product quality of Toyota which was taken as an example by Geely relied on the full participation of the company staff. The per capita proposals amount to as many as 24 pieces. Inspired by this, An set up the management measure named "Vitality Project" to excavate the innovative potential of the workers at the production line. In order to motivate the staff, the Ningbo base set a variety of awards for the proposal, including the best cost-cut award, the best proposal award. The proposals are directly linked to the bonus by rating.

The "Vitality Project" still continues. In Hangzhou Bay plant, the Kanban for this project is treated as important as that for GGQ353. The staff proposals are exhibited on the Kanban. Besides, two card slots are installed to collect the "problem cards" designed for workers who may come across problems in their work. The staff responsible for the project will take the cards and put the ones with solutions back.

The live issues proposed on the "problem cards" should be answered and resolved within the stipulated time. The Korean Li Xiangcai is the boss and partner of Wu Guoda. The staff in Geely was probably impressed by the boss's unusual act at the end of 2011. Li Xiangcai gave a lecture on the "Geely Lecture" opened on December 19, 2011. At the end of the lecture, Li Xiangcai took off his jacket and exposed the special-made vest on which was written "Hangzhou Bay quality, forge ahead in 2012" at the front, and "every staff is responsible for the quality improvement" at the back.

"In the final analysis, the competition between enterprises is the competition of corporate cultures. Corporate culture is something others can't copy," said An, who considers it important to build special and competitive corporate culture of Geely which is the basic driving force for the company's transformation.