How to explain how Haier can improve production efficiency with classical management theory?

The first is strategic alliance, the second is process reengineering, and the third is benchmarking.

Haier's production mode in the second stage is lean production, and the management mode to promote lean production is internal simulation marketization, integration of people and individuals, and SBU (Strategic Division).

Internal simulation marketization is to turn a unit into a profit center, and Haier further sank the profit center in 2005.

Every workshop, every section and even every team has become a profit center.

Haier will determine the profit target of each business entity. As long as you earn enough business expenses and keep enough business profits, the rest will be owned by the team.

Self-operated enterprises help to carry out lean production, and have established six mechanisms: market mechanism, contract mechanism, competition mechanism, mutual selection mechanism of officers and men, gathering and dispersing mechanism according to orders, and reward mechanism according to individual orders.

These mechanisms will promote the implementation of Haier's independent management system.

Haier carries out lean production through the cost control kanban of operating entities. With the help of kanban, we can see the shortcomings of the management subject and the key points in the management process.

For example, business representatives want to increase profits by reducing total labor costs. What should I do? We can only improve labor productivity, improve the skill level of employees and find ways to improve them in all aspects.

If the total labor cost is reduced and the average labor cost of employees is reduced, employees will not follow the business representatives. Employees have the right to impeach enterprise representatives through the mechanism of mutual election between officers and men in the six mechanisms.

In mass production, there is an index about quality loss called qualified rate, but it becomes qualified rate in lean production stage, also called primary qualified rate.

Enterprises should count the quality losses produced every day. Assuming that the profit target is 500,000, only when the profit exceeds 500,000 can the business entities share the profit.