At the end of January 2008, the country was hit by cold, rainy, and snowy weather, but Dongfeng Cummins Engine Co., Ltd. in Hubei Province had some positive news to share. The company reported record-breaking production and sales figures for the month, with mechanical and electronically controlled engines reaching 15,000 units, while Yutai and 17,000 units were sold in Taiwan.
Typically, the end of the year and the start of the new year mark a slow period in the market. However, this month’s harsh weather disrupted transportation and caused many major machinery manufacturers to face supply chain challenges. Despite these difficulties, Dongfeng Cummins managed to achieve a significant increase in both production and sales. How did they manage to turn things around?
To find out, the author contacted Dongfeng Cummins through a phone interview. According to the company, one key factor was their strategic focus on diversifying their customer base and expanding into multiple markets. Since 2006, Dongfeng Cummins has prioritized "diversification" as part of its long-term strategy. While continuing to support Dongfeng vehicle manufacturers, the company also actively expanded into foreign markets and non-vehicle sectors, such as construction machinery and generator sets.
Dongfeng Cummins has established strategic partnerships with several OEMs, including Hualing, Yutong, and Beiqi Foton, and has made considerable progress in these areas. By positioning itself as a "strategic partner," the company has engaged in comprehensive collaboration with host manufacturers in research, development, manufacturing, and marketing.
Another important reason for the surge in production and sales was Dongfeng Cummins’ strong capabilities in producing National 3 electronic control engines. In May 2007, the company announced that it had fully converted its production line to meet National 3 standards. It also launched an “early care plan†to support manufacturers and end-users during the transition, offering full assistance from product development to after-sales service.
As the sales of National 3 engines expanded, so did Dongfeng Cummins’ market opportunities, leading to increased demand and stronger performance in the industry.
In addition to effective marketing and product strategies, Dongfeng Cummins’ ability to respond quickly to unexpected situations played a crucial role. Each manufacturer’s supply chain involves two parts: connecting upstream suppliers and downstream customers. For Dongfeng Cummins, accurate sales planning, reasonable spare parts inventory, and product stock levels ensured a swift response during emergencies, keeping the supply chain running smoothly.
According to Zhang Yuhong, the sales plan manager at Dongfeng Cummins, the company carefully considers various factors when creating sales plans. Based on customer demand, production is planned accordingly. Sometimes, more products are produced than ordered to prepare for last-minute needs or potential supply shortages due to bad weather. When signing agreements with suppliers, Dongfeng Cummins also anticipates possible disruptions and makes reasonable arrangements, adding an extra layer of security for uninterrupted production.
This approach may tie up some liquidity, but it ensures that production schedules and delivery times remain on track during emergencies.
In terms of engine delivery, Dongfeng Cummins has also set up transit warehouses near major customer plants to better support vehicle manufacturers. This has proven especially valuable during natural disasters like heavy snowfall and floods, significantly improving supply chain efficiency.
Efficient management and a well-planned delivery system have become the foundation of Dongfeng Cummins’ ability to quickly respond to customer needs and provide strong support to host manufacturers. In January 2008, the company was once again recognized as an outstanding supplier by Valin at the appreciation meeting of parts and components manufacturers.
Beyond close cooperation in R&D, manufacturing, and marketing, the efficient coordination between Dongfeng Cummins and its partners also contributed to this recognition. As Liu Xiaoxing, general manager of Dongfeng Cummins, explained, the relationship between engine and vehicle manufacturers is not just a simple transactional one, but a strategic partnership built on long-term and stable cooperation.
Breaking down barriers in the industrial chain and building a more integrated and efficient supply chain—from initial suppliers to end users—has become a global trend. During the severe blizzard that affected the whole country, Dongfeng Cummins followed this principle and performed effectively. Additionally, the company’s logistics team demonstrated excellent knowledge of road conditions and adaptability, which helped ensure timely deliveries.
When highways were closed due to snow, alternative routes were taken. If national highways were blocked, local roads were used instead. No matter the method, the goal remained the same: delivering engines to vehicle manufacturers’ assembly lines on time, ensuring timely supply to end users.
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