As an old company, how can Foxconn find a way out in the new era?

Foxconn is the largest OEM company in the world. However, as time passes and the years pass, the ancient manufacturing model has been difficult to adapt to the changes in the modern market. President Guo has been trying to transform and told his employees with firm eyes: Foxconn is not A foundry company, but a reliable industrial Internet company. Fii Industrial A-shares were listed on the A-share market and received strategic investment from BAT and the National Team. Everyone is using money to support Foxconn’s continued transformation. The heavy assets of the manufacturing industry involve issues such as manpower, land, equipment, customer relations, etc. Foxconn is now thirty years old. Their growth path, from a Taiwanese company to a mainland company, is worth recalling.

Times have changed, fueling Foxconn’s slow transformation. Although China’s A-share market is unfathomably deep, at least judging from the current situation, the capital market still welcomes Foxconn’s participation. After 30 years of capital accumulation, they have become a golden cow through and through. In 2017, their revenue It has reached 1,016.9 billion yuan, with a peak of 1.2 million employees. They assemble more than 70% of iPhones, and have also served Nokia, Motorola and any respectable electronic technology manufacturers. The most amazing thing is that facing Foxconn, which is often aloof from customers, often changes brands and loses its reputation, but the title of OEM King will always belong to Terry Gou and his industrial parks around the world. This entrepreneur from Taiwan is strong but gentle. For a long time, he has adhered to the line of "making money in a low profile" and promised his customers not to build competitive brands. He emphasized that Foxconn's brand is efficiency, quality and Flexibility, it can be said that Gou Taiming chose the most difficult, tiring and diligent profit path, a path that many people are unwilling to take, but he has overcome all the thorns.

OEM profits are quite slim. They are the last link in the iPhone industry chain and are responsible for all risk factors such as site, equipment, production capacity, quality of incoming materials, changes in orders, etc., but their profit margin is only 2%. , in contrast, Apple is sitting on 40% of profits, with healthy financial reports and sufficient cash reserves. It is precisely because of such profit margins and high risks that it is far from a long-term solution. The changes in the new era, especially the changes in the investment environment in mainland China and the mentality of the new generation of employees, have forced Terry Gou and his management team to busy planning and transformation. But how difficult is it for an elephant to turn around?

Since 2010, in the face of changes in the investment environment in mainland China, Terry Gou has resolutely decided to move Foxconn inland, so that they will be further away from Taiwan and fully penetrate into the mainland. To be fair, the work pace in the coastal areas of Guangdong is similar to that in Taiwan, but inland areas such as Henan, Guiyang, and Ordos each have their own characteristics. Fortunately, Foxconn continues to export valuable work concepts to the local area through a complete manufacturing system. Rather than saying Foxconn has become a mainland company. Rather, wherever Foxconn goes, the regional economy has been deeply affected. Take Henan as an example. They were originally a major agricultural province, and their export volume ranked last among the six central provinces. A large number of Henan residents left their hometowns and became active in the construction and domestic service industries across China. Because Foxconn established iPhone town in Zhengzhou, 400,000 people Henan's population can return to their hometowns for employment. At the same time, they have transformed jujube groves into manufacturing bases for the world's most popular electronic products, allowing more and more Henan people to find ways to make a living outside of the land. This may be what Foxconn does to society. , one of the most important contributions.

In addition, Terry Gou boasts that he creatively proposed the concept of "+Internet". He believes that BAT can talk about Internet+, but its own manufacturing company should be +Internet. Foxconn will cooperate with the Made in China 2025 plan to adhere to the real manufacturing economy. , but we must make full use of advanced technologies such as automation, big data, cloud computing, and the Internet of Things to comprehensively upgrade the manufacturing industry.

Once upon a time, having 1.2 million employees was something to be proud of, especially if it gave people the illusion of being the “King of the Mountain”. However, managing such a large number of employees is a very difficult task in itself. , and the labor costs are astronomical. Guo Taiming recalled: He hoped that all employees could eat chicken legs, but he had to buy a large refrigerator because the purchasing department needed to buy chickens from all of Shenzhen from Monday to Friday to have enough chicken legs for employees every week. Six chicken drumsticks per person. Such a strange phenomenon due to the large number of people is no stranger to Foxconn. What is even more embarrassing is that the salaries of mainland Chinese employees are continuing to rise, and young people are increasingly reluctant to enter factories. In addition, China’s Internet The industry is developing rapidly and the employment environment is becoming increasingly rich. There are more and more new jobs such as courier boys, takeaways, Didi drivers, and live broadcast internet celebrities. Work on Foxconn's assembly line is no longer competitive, which forces them to seek transformation, and the industrial Internet is the most important tool for their transformation.

Industrial Fii will help Foxconn become a century-old enterprise. Now, Foxconn has built more than 50 parks in mainland China. Not only big cities like Shenzhen, Beijing, and Shanghai have their own neat parks, but also third- and fourth-tier cities such as Lankao, Langfang, and Ordos have thousands of acres of Foxconn buildings. As mentioned above, Foxconn’s campus covering the mainland is a “win-win” thing. The inland areas provide Terry Gou with relatively cheap land and preferential policies, while Foxconn provides a large number of jobs. , and the service industries derived from it. More importantly, while they export products and pay taxes, they also export a large number of business concepts and management talents to the community. Now Foxconn has independently spun off its cloud, storage equipment, server manufacturing and other businesses to form Industrial Fii and go public, which will definitely have a deeper impact on the regional economic development of the mainland. Perhaps this is what Baidu, Alibaba, Tencent and the national team are doing The most important reason for corporate joint investment.

Everyone on earth knows that automation and intelligence are the major trends in the future manufacturing industry. As early as 2011, Terry Gou shouted the strategy of "building one million robots in three years." Obviously, one million robots The plan has become a commercial unfinished plan, but it is undeniable that Foxconn's automation industry has never stopped. They have not only built thousands of semi-automated iPhone production lines, but also made extensive arrangements in big data and cloud computing. Legend has it that Gou Taiming and Son Masayoshi are very good friends. They admired each other at the Japan Robot Summit Forum. Later, SoftBank developed and sold robots with a price of up to 10 million US dollars, and Gou Taiming ordered 10 units without hesitation, once again perfecting his own in Taipei. Lights out workshop. In fact, the reason why the author likes to talk about the social significance of manufacturing lies in its impact on the social talent system. Take Foxconn as an example. They are a pyramid-shaped enterprise, under the mainland plate, and in the foundry empire, Terry Gou is said to be " "Emperor" is a bit too much, but at least it should be at the provincial governor level. The company is full of American MBAs, returned Ph.D.s, senior management talents, etc. At the same time, this company has cultivated a large number of middle class people. "Joining Foxconn, "Go straight to a well-off society" is one of the most practical slogans around the Foxconn campus, while millions of jobs are provided to people with low education, low skills or who need temporary work.