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Caterpillar practice localization and achieve internationalization of shangong machinery

Sep 19, 2018

Do you remember the celebration of the 60th anniversary of Shangong machinery brand held by Caterpillar in Qingzhou? Today, let me tell you a story about Caterpillar's achievement in becoming an international producer.


In 1958, in a wilderness in Qingzhou, Shandong province, several entrepreneurs built eight grass houses and five open sheds to produce machinery and appliances. This is the prototype of the mountain machinery factory.


After more than 10 years of hard work, the leaders of Shangong machinery saw the prospect of machinery construction market in China and decided to lock the main products of the factory on the loader. Since then, the company has gone through restructuring and foreign investment, and officially changed its name to Caterpillar (Qingzhou) co., ltd. in November 2013, and continued to use the brand.


After joining the big family of Caterpillar, Shangong machinery ushered in the rapid development. Over the past five years, our product line has expanded from loader to roller, leveller and bulldozer. While meeting the needs of domestic customers, we started the process of internationalization with the help of caterpillar resources.


"Our initial cooperation with shandong machinery is to better meet the needs of the Chinese customer base," said Frederic Istas, caterpillar's global vice President of the earth products division.


Since the 1980s, China's construction machinery industry has grown rapidly through introduction, digestion and absorption, especially in the loader market. Attracted by the policy of reform and opening up, caterpillar came to China for development.


As the products become more popular with customers, caterpillar, whose products are relatively in the high-end market, also hopes to expand its products to serve more customers who love caterpillar products. In 2003, caterpillar began seeking partners in earthmoving machinery in China. At the same time, the company also hopes to have the opportunity to transform itself into an industry leader through cooperation with global companies.


After understanding each other's same initial intentions and complementary values, caterpillar and shandong machinery soon entered into a mutually beneficial partnership. Caterpillar brings advanced process management, discipline principles and quality control, as well as technology and expertise in plant management to shandong machinery, which provides caterpillar with practical experience in working with Chinese suppliers to meet the needs of local customers.


Suppliers and customers of the company said: "It is great to see the company enter Caterpillar's global network. The development of the global business has brought about qualitative changes, the level of suppliers and agents has been improved, and the customers have higher quality products, which can meet the needs for the economic benefits of the project."


Fifteen years ago, Shangong machinery had a single product and its main market was almost in China. Caterpillar's resources have led to the business development of shigong machinery, and its products have also been updated. The company has expanded its product range to bulldozer, leveller, roller, etc., covering nearly 40 kinds of earthworks machinery products of shigong machinery and carter brand. In 2017, Shangong machinery brand SEM656D loader won Caterpillar chairman quality award.


In product development, Caterpillar injected innovative DNA into yamugong machinery, achieving a leap in reliability and quality. Over the past 15 years, caterpillar has made innovations in qingzhou, set up a research and development center in Qingdao, and continuously integrated caterpillar's design concept into its products.


Caterpillar, meanwhile, exports manufacturing systems and technology to local suppliers. With the support of local partners, qingzhou base has also created an end-to-end manufacturing chain.


The integration of teams and cultures is also an integral part of the company's growth from a small private factory 60 years ago to a global brand. Caterpillar's corporate culture encourages global team coordination, emphasizing integrity, teamwork, commitment, sustainability, and the pursuit of excellence. The mountain industry machinery pays attention to the fighting spirit, the fighting spirit, the unceasing innovation, the unceasing progress. The two sides complement each other in culture, which injects spiritual power into the internationalization of shangong machinery. The company not only meets the needs of Chinese customers, but also meets the needs of global customers.


Caterpillar attaches great importance to close to customers. In the world, caterpillar works closely with agents to provide close service to local customers. At present, more than 60 agents in the Chinese market are responsible for the machinery products produced by caterpillar qingzhou factory. Overseas, relying on the caterpillar agent network, the sales network of shandong machinery has covered more than 90 countries and regions in the world. Xugong's internationalization has strongly pushed caterpillar to achieve the goal of expanding the global market and provided continuous support for the fast-growing customer groups in the global market.


"In a developing country like China, which has huge market prospects, we have to focus on customers, understand the market, provide the right products to satisfy customers and provide value to customers," said Chen qihua, caterpillar China's President and vice President of capillaret. The successful development of caterpillar in China over the past 40 years is precisely from the perspective of production and operation to achieve the globalization strategy and localization operation.


Successful localization is the cornerstone of business sustainability. An important strategy for caterpillar to succeed in China is to manufacture high-quality products in China to meet not only the needs of Chinese customers, but also the needs of global customers. In order to create the best products for its customers, caterpillar implemented the concept of lean production, production system and continuous improvement to its manufacturing plants in China, making them the production base of global products.


Today, caterpillar qingzhou factory is an important base of Caterpillar's global earthmoving machinery division. As a Caterpillar brand that provides practical and functional products to its customers, shangong machinery has become an indispensable member of the Caterpillar brand family.


Caterpillar has established the second largest research and development center in the world in China. Through two-way research and development mode, it not only introduces internationally advanced design concepts and products to the Chinese market, but also fully taps the r&d ability of local talents in China and applies local design and innovation to products serving the international market. Caterpillar's research and development centers in wuxi and Qingdao have led the design and development of the SEM512 roller and 816 bulldozer, which are used in the global market.


The successful experience of Caterpillar is to implement global quality standards to suppliers and create a business card of "made in China, world quality". By adopting and supporting the manufacture of indigenous products, caterpillar has also pushed local suppliers to the international market. Caterpillar's integration of global culture into the whole end-to-end business cooperation has also enhanced the soft power of suppliers.


Caterpillar regards the cultivation of indigenous talent and leadership as an important priority. After more than 20 years of development, more than 20 Chinese factories, including Caterpillar's qingzhou plant, have been run entirely by local talents.


Caterpillar's development in qingzhou is a successful example of the deep localization of global companies in China. The brand has become a very important part of caterpillar's global design, development and production. From product research and development, production and manufacturing, development and management of agents, to overall corporate culture and team building, and to the pursuit of sustainable development, this integrated operation and cooperation has won more customers for the company and created new growth opportunities.


More and more customers around the world are looking for products and solutions of multiple value combinations to meet demand in the light, medium and heavy application markets. The combination of caterpillar brand and shandong machinery brand enables caterpillar to better provide customers with one-stop complete solutions, enabling them to choose the most suitable products according to specific projects and their own economic conditions.


In the past 60 years, the company has been breaking through itself and becoming an important brand under caterpillar. As it enters the new market, caterpillar will continue to deepen its localization practices in the Chinese market with an ever-expanding product line and services to help customers and industries achieve high-quality and sustainable development.