Formosa Plastics Group
Formosa Plastics Group, founded by Wang Yongqing and Wang Yongzai brothers, is the largest privately-run manufacturing group in Taiwan Province Province, with more than 30 branches and overseas companies, which plays an important role in the petrochemical industry and even the whole enterprise in Taiwan Province Province. Wang Yongqing is the "king of plastics" in the world. Wang Yongqing not only established a huge family business in Taiwan Province Province, but also invested NT$ 300 billion in Taiwan Province Province to build a cross-century "Six Light Industries" project, and also invested US$ 654.38 billion in the United States to build a huge petrochemical industrial base. There are many members of the Wang family, including ten sons, daughters, daughter-in-law and son-in-law, ranking among the most important family businesses. Although no one in the Wangs works in politics, they have a good relationship with business and politics, and they have a great influence on the economy and politics of Taiwan Province Province. They are typical representatives of emerging families in Taiwan Province Province.
The Wang Yongqing family of Formosa Plastics Group is one of the big emerging families after the war. There are many family members, almost all of whom work and develop in family-related enterprises. Although no one in the Wangs is in politics, Wang Yongqing has long been the leader of the industrial and commercial circles and has a high status and prestige in the industrial and commercial circles and society in Taiwan Province Province, which makes the Wangs have far-reaching influence and good political and business relations in politics.
Brief introduction of Formosa Plastics Group
Formosa Plastics Group is the largest industrial group in Taiwan Province Province, the second largest private group and one of the largest petrochemical enterprises in the world. * * * owns more than 30 subsidiaries and business divisions, covering plastic, chemical fiber, freight, machinery, medical care, education and other industries, and has 6 overseas branches in the United States, Indonesia and Hong Kong.
Formosa Plastics Company established Taiwan Province Plastics Company on 1954. The PVC powder factory was put into production in 1957, with a daily output of nearly 4 tons and a monthly output of about 100 tons, which was the smallest PVC in the world at that time.
Powder mill. At that time, due to low output, high cost, lack of downstream processing customers, products piled up, seriously unsalable, in a dilemma. From trial production in March of 1957 to February of the same year, even
1 kg plastic powder is not sold. 10 month, 1 0,000 tons of plastic powder, completely stored in the warehouse, without a catty.
The product can't be sold, and it is urgent to open up the market. After repeated thinking, Formosa Plastics finally decided to reduce the unit cost by greatly increasing the output. At the same time, a new processing plant will be built to digest PVC powder and then expand exports with processed products. Through the above measures, the output of PVC powder increased from 4 tons to 40 tons per day. The second phase expansion of Formosa Plastics was successfully completed in 1960, and the monthly output of PVC powder surged to 1200 tons, which greatly reduced the cost and provided the conditions for competing in overseas markets.
Expanding production, while reducing costs and improving competitive advantage, has produced another problem-product digestion. Wang Yongqing found in the investigation that the downstream factories processing PVC powder, Tainan No.1 Chemical Plant and Sanchongpu Yongfeng Chemical Plant, even increased the selling price to more than double the cost after processing the plastic powder into plastic and then into glass skin and glass cloth. Wang Yongqing lobbied two processing plants to reduce prices to expand the number of customers in order to digest more plastic powder, but in vain, Wang Yongqing felt disappointed and anxious. In desperation, Wang Yongqing decided to set up his own processing factory.
1958, Wang Yongqing embarked on the second expansion plan, and at the same time established South Asia Plastics Company, which was engaged in the secondary processing of PVC pipes, rubber sheets and adhesive tapes. Later, in order to digest the secondary processed products in South Asia, he set up Xindong Company, which produced the tertiary processed products such as purses, suitcases, shoes, curtains, raincoats and blown toys, and created a unique tertiary processing system. Under the application of this strategy, the dilemma of unsalable PVC powder was finally solved.
Although Wang Yongqing stressed that it was a last resort to set up a South Asia factory in the case of a large backlog of Formosa Plastics products, there was really no other good way to do it, but competitors did not cooperate. However, Wang Yongqing's last strategy is an efficient "vertical" strategy.
After two expansions, the output increased and the cost was reduced. By establishing a processing system to digest the diversified business strategy of products, Taiwan Province Plastics Company got rid of the predicament and made great strides. In view of this successful case, Formosa Plastics Company has been developing diversified. Formosa Plastics Company established Taihua Company on 1965, and used discarded twigs and small-diameter wood cut down on the mountain as raw materials to produce artificial cotton, yarn, cloth and clothing, which officially entered the textile industry. South Asia Company set up a factory to produce polyester cotton in 1967, Formosa Plastics also set up a factory to produce acrylic cotton in the same year, and Taihua set up a factory to produce nylon fiber and cloth in 1974. In order to increase added value and provide better service for downstream customers, Formosa Plastics Group is the only enterprise in Taiwan Province Province that can produce four kinds of textile fibers at the same time and provide dyeing and finishing, and it is also one of the largest fiber manufacturers in the world.
In view of the long-term shortage of petrochemical basic raw materials in the upper reaches of the island, the self-sufficiency rate is only 38%, so that dependence on imports is often forced to buy more expensive raw materials, which reduces foreign competitiveness. Therefore, in order to alleviate the plight of the shortage of petrochemical basic raw materials, Formosa Plastics Company put forward the Sixth Light Industry Plan, which was approved by the Taiwan Province provincial authorities on 1987. Formosa Plastics Petrochemical Company 1993 was established in cooperation with the Sixth Light Industry Project, responsible for the construction of oil refineries, light oil cracking plants and steam power plants. The first phase of light oil cracking plant and steam power plant were completed at the beginning of 2000 and the end of 1998 respectively.
After more than 40 years of development, Formosa Plastics has owned more than 20 related enterprises, including Formosa Plastics, South Asia, Taihua, Formosa Plastics and Petrochemical, and has factories in Taiwan Province Province, the United States, Chinese mainland and Indonesia. In addition, it has huge educational and medical institutions and is one of the largest private enterprises in Taiwan Province Province.
Success of Formosa Plastics —— Formosa Plastics Management Model
The key to Formosa Plastics' success is the founder of Formosa Plastics Group. Wang Yongqing, who is known as the "God of Management" in Taiwan Province, has persistently pursued a set of invincible and extremely perfect Formosa Plastics business model.
What is the "Formosa Plastics Management Model"? Wang Yongqing metaphor said, take a tree as an example, there are branches and leaves on the top of the tree, there are roots below, there are big roots and middle roots in the roots, and there are many fine roots connected with the middle roots. The growth of a tree depends on the fine roots to absorb nutrients, and then through the middle roots and big roots to reach the whole tree, in order to flourish. People often only pay attention to the lush branches and leaves, but ignore the invisible roots. Wang Shuiqing believes that the management of enterprises should be the same as that of trees with thin roots, and we should start with the roots that are most easily overlooked in order to sort out the mess and straighten out the management of affairs. The biggest feature of Formosa Plastics management mode is the spirit of "seeking the root, not asking the result".
The development process of Formosa Plastics Group's management mechanism is roughly as follows: 1967, the group mainly focused on Formosa Plastics, South Asia and Xinmao Wood Industry, and the group was mainly supervised and coordinated by Wang Yongqing, the leader, and there was no formal group management system and organization. By 1968, the scale of the group has expanded and the business relationship between subsidiaries has become more and more complicated, so it is necessary to establish a more formal consulting management system. Formosa Plastics has set up a comprehensive group management office to supervise, control and provide professional services to its subsidiaries.
During the period of 1970, Taihua's factory was large in scale, complicated in organization and products, and its management was not on track, resulting in losses for years. But all this is not understood by the outside world. Wang Yongqing sent his younger brother Wang Yongzai to Taihua for rectification.
According to the investigation in Wang Yongzai, it is found that the raw material for Taihua to produce chemical fiber blankets is artificial cotton, while the raw material for producing artificial cotton is the residual wood of mountain forest farms. From raw materials to finished products, more than a dozen factories have been set up respectively. Each factory is responsible for a process, and the relationship between factories is close and continuous. Originally, this mode of production is in line with the requirements of mass production. However, because each factory does not independently calculate the cost, the products of the previous process, regardless of the cost and quality, are accepted according to the order, so the cost is passed on layer by layer, resulting in heavy losses for the company. No one is responsible for this matter, no one knows what responsibility to bear, and there is no basis to investigate who is responsible. The root cause of this ending lies in the lack of a perfect management system.
When Wang Yongzai learned about this situation, the factory directors insisted that their units were profitable. Wang Yongzai was very angry. He said to the directors, "Everyone says they are making money. In fact, the company is losing money. Did I take the money? " Wang Yongzai was so anxious that he didn't know where to start.
To this end, Wu Congnan Asia Accounting Firm, who has many years of accounting experience, was transferred to Taihua Accounting Firm to be responsible for establishing the "responsibility center" system. The "responsibility center" system is the "profit center" system, which is to play the accounting function and calculate the cost for each unit.
Wu led the staff in the financial office of Taihua Chemical Co., Ltd. and spent three months accounting the profits and losses of each factory. Wu wrote the results into a report. In the report, profitable factories use black words, while loss-making factories use red words. The result is naturally more red and less black.
After the report was completed, Wang Yongzai immediately called the director of the loss-making factory and taught him a lesson. At that time, because the factory director and manager of the institution didn't get the relevant information, although they were trained by General Manager Wang, they were still at a loss for some reason.
Since then, the leaders in charge of each unit have taken the initiative to understand the ins and outs of accounting information and attached great importance to the cost of the factory. The scarlet letter unit tries to reduce the cost and strive to change the scarlet letter into black; The units in bold will make persistent efforts to make progress. For a time, the weather in Taihua was hot. In less than a few months, Taihua turned a profit.
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