Formosa Plastics Group
Formosa Plastics Group, established by Wang Yongqing and Wang Yongzai Brothers, is the largest private manufacturing group in Taiwan Province, with more than 30 branches and overseas companies, which plays an important role in Taiwan Province petrochemical industry and the whole business community. Wang Yongqing is the "king of plastics" in the world. Wang Yongqing has not only established a huge family business in Taiwan Province, but also invested NT$ 300 billion in Taiwan Province to build a cross-century "Six Light" project, and also invested US$ 10 billion in the United States, thus establishing a huge petrochemical industry base. There are many members of the Wang family, including ten sons, daughters, daughter-in-law and son-in-law, which ranks among the most important family businesses. Although no one in the Wangs holds a post in politics, they have a good relationship with business and politics, and they have a significant influence on Taiwan Province's economy and politics. They are typical representatives of emerging families in Taiwan 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 Taiwan Province's industrial and commercial circles and society, which makes the Wangs have a profound influence on the political circles and good political and business relations.
Brief introduction of Formosa Plastics Group
Formosa Plastics Group is the largest industrial group in Taiwan Province, the second largest private group, and one of the largest petrochemical enterprises in the world. * * * It has more than 30 subsidiaries and business divisions, covering the fields of plastics, chemical fiber, freight, machinery, medical care, education and other industries, and has six overseas branches in the United States, Indonesia and Hong Kong.
Formosa Plastics Company founded Taiwan Province Plastics Company in 1954. 1957 PVC powder factory started production, with a daily output of nearly 4 tons and a monthly production of about 100 tons of PVC powder, which was the smallest PVC in the world at that time.
Powder factory. At that time, due to low output, high cost, and lack of downstream processing customers, products piled up like mountains, which were badly unsalable and in a dilemma. From trial production in March 1957 to February1957 in the same year, it was even
1 kg of plastic powder has not been sold. 10 month, the whole 1000 tons of plastic powder, completely stored in the warehouse, without losing a pound.
The products can't be sold, so it's 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, it built a new processing plant to digest PVC powder, and then expanded its export 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, and the cost was greatly reduced, so that it had the conditions to compete in overseas markets.
Expanding production, while reducing costs and improving competitive advantage, has produced another problem-product digestion. In the investigation, Wang Yongqing found that the downstream factory of processing PVC powder, the First Chemical Plant in Tainan and the Yongfeng Chemical Plant in Sanchongpu, even increased the selling price to more than double the cost after processing plastic powder into plastic and then into glass skin and glass cloth. Wang Yongqing lobbied the two processing plants to reduce prices to expand the number of customers, so that more plastic powder could be digested, but in vain, Wang Yongqing was disappointed and anxious. In desperation, Wang Yongqing decided to set up his own processing factory.
1958, Wang Yongqing set out to carry out the second expansion plan, and at the same time set up South Asia Plastics Company, which engaged in the secondary processing of PVC pipes, rubber sheets, adhesive tapes and other plastics. Later, in order to digest the secondary processed products in South Asia, he set up Xindong Company to produce three-time processed products such as purses, suitcases, shoes, curtains, raincoats and blow-blown toys, creating a three-time processing system unparalleled in the world. Under the application of this strategy, the dilemma of unsalable PVC powder was finally solved.
Although, Wang Yongqing emphasized that the establishment of South Asia Factory was a last resort when Formosa Plastics had a large backlog of products, but its competitors did not cooperate and there was really no other good way. However, Wang Yongqing's last strategy was an efficient "vertical" strategy.
After two expansions, the output was increased, the cost was reduced, and the diversified business strategy of digesting products through the establishment of processing system made Taiwan Province Plastic Company get rid of the predicament and make great strides. In view of this successful case, Formosa Plastics Corporation has continuously diversified its development. Formosa Plastics Company set up Taihua Company in 1965, and used the discarded twigs and small-diameter wood cut down on the mountain as raw materials to produce rayon cotton, yarn, cloth and garments, and formally entered the textile industry. South Asia Company set up a factory to produce polyester cotton in 1967, Formosa Plastics 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, provide better services to downstream customers and set up a large-scale dyeing and finishing plant, Formosa Plastics Group is the only enterprise in Taiwan Province that can simultaneously produce four kinds of textile fibers and provide dyeing and finishing processing, 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, reducing foreign competitiveness. Therefore, in order to alleviate the plight of the shortage of petrochemical basic raw materials, Formosa Plastics Corporation proposed the Six Light Industries Plan, which was approved by Taiwan Province authorities in 1987. Formosa Plastics Petrochemical Company was established in 1993 in cooperation with the Sixth Light Industry Project, and was responsible for the construction of oil refineries, light oil cracking plants and steam-electricity plants. The first phase of the light oil cracking plants and steam-electricity plants were completed in early 2000 and at the end of 1998 respectively.
After more than 40 years' development, Formosa Plastics has more than 20 related enterprises, including Formosa Plastics, South Asia, Taihua and Formosa Plastics Petrochemical, with factories in Taiwan 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.
The Success of Formosa Plastics —— Formosa Plastics Management Model
The key to Formosa Plastics' success lies in the founder of Formosa Plastics Group. Wang Yongqing, who is known as the "God of Management" in Taiwan Province, has persistently implemented a set of invincible and extremely perfect Formosa Plastics Management Model.
What is the "Formosa Plastics Management Model"? Wang Yongqing metaphorically said that taking a tree as an example, there are branches and leaves on the top of the tree, roots below, big roots and middle roots in the roots, and many fine roots connecting the middle roots. The growth of a tree depends on fine roots to absorb nutrients, and then it reaches the whole tree through middle roots and big roots, so that it can grow luxuriantly. What people pay attention to is often only the lush branches and leaves, while ignoring the invisible roots. Wang Shuiqing believes that the management of enterprises should be the same as that of trees with fine roots, and we must start from the most easily overlooked roots in order to sort out the mess and rationalize 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 the management mechanism of Formosa Plastics Group is roughly as follows: before 1967, the group mainly focused on the three core subsidiaries of Formosa Plastics, South Asia and Xinmao Wood Industry, and the group was mainly supervised and coordinated by the leader Wang Yongqing, and there was no formal group management system and organization. By 1968, the scale of the group had expanded, and the business relationship between subsidiaries had become increasingly complicated, so it was necessary to establish a more formal consultation and management system. Formosa Plastics established the General Management Office of the Group to supervise, control and provide professional services to subsidiaries.
1970, due to the huge scale of Taihua's factory, complex organization and products, and the failure of management, it caused losses for years. But all this is not understood by the outside world. Wang Yongqing asked his younger brother Wang Yongzai to go to Taihua for rectification.
According to the investigation in Wang Yongzai, it is found that the raw material for the production of chemical fiber blankets in Taihua is rayon cotton, and the raw material for the production of rayon cotton is the residual wood from 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 connection between factories is close and continuous. Originally, this mode of production is very in line with the requirements of mass production. However, due to the fact that each factory does not calculate the cost independently, the products of the previous process, regardless of the high or low cost, good or bad quality, are all accepted according to the order, so the cost is transferred layer by layer, resulting in heavy losses for the company. No one is responsible for this matter, no one knows what responsibility should be taken, and there is no basis to investigate who is responsible. The root cause of this ending lies in the lack of a sound management system.
When Wang Yongzai learned about the situation, the directors of various factories insisted that their units were making money. Wang Yongzai was so angry that he said to those directors, "Everyone said that they were making money. In fact, the company was losing money. Did I take the money?" Wang Yongzai was so anxious that he didn't know where to start.
To this end, Wang Yongqing transferred Wu Chaohuang, who has many years of accounting experience, from the South Asia Accounting Office to the Taihua Accounting Office 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 Chaohuang led the staff of the accounting office of Taihua Chemical Co., Ltd. and spent a whole three months accounting the profit and loss of each factory. Wu Chaohuang made the results into a report. In the report, the profitable factories used black words and the losing factories used red words. The result is naturally more red and less black.
When the report was completed, Wang Yongzai immediately called the director of the loss-making factory to lecture him. At that time, because the factory directors and managers of public institutions did not get the relevant information, although they were trained by General Manager Wang, they were still at a loss for some reason.
Since then, the directors 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 its best to reduce costs and strive to change the scarlet letter into black characters; The units in black letters will make persistent efforts and strive for progress. For a time, there was a hot weather in Taihua. In less than a few months, Taihua's performance turned losses into profits.
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