Back to the teenage years

Chapter 539 From the perspective of strength
The factories of Aiwa Electronics' production base mainly include circuit board production workshop, movement assembly workshop, shell assembly workshop, whole machine assembly workshop and packaging workshop. The technical difficulty of the entire production process is actually not great.

This is also the reason why a large number of pure assembly factories of low-quality DVD players emerged in coastal areas in the past life. However, it was precisely because of the lack of core technology that when the market was swollen, price wars and gift wars broke out, squeezing the profit margins. The powerful large factories fought like gods, and these pure assembly factories all died.

Zhang Yunqi invested huge amounts of money and brought in state-owned assets at the provincial and municipal levels. If he did so, sooner or later, he would become the sinner of Jiangchuan and even the entire Xiangnan, nailed to the pillar of shame among the typical failure cases of large-scale government investment and financing. The word "stupid" would accompany him throughout his life and be laughed at by future generations. What's more terrifying is that he would be whipped in 360 degrees in novels by those online writers who are so good at typing that water is coming out of their keyboards.

After operations in the second half of last year, Zhang Yunqi has divided Aiwa Electronics into three major divisions: front-end marketing, central technology research and development, and back-end product production, and operates them through three wholly-owned subsidiaries.

The front-end market sales are handled by Aiwa Electronics Operation Management Company, and the marketing genius Hu Zhibiao is in charge, which can be regarded as the best use of his talents. Zhang Yunqi does not want Hu Zhibiao to manage the production and technical research and development of DVD players, because although Aido Electronics once became the overlord of China's VCD player market under his operation, Hu Zhibiao should be held primarily responsible for the subsequent collapse. He has a radical personality, pays too much attention to marketing, and has poured too many resources into this area. His capital operation ability is poor, which led to Aido's lack of core technology accumulation. When the DVD player market collapsed, Aido, which looked bright and beautiful on the outside but was an empty shell on the inside, found it difficult to turn around.

The technical research and development of the center is in charge of Aihua Electronic Components Company. The R&D center is located in Longquan Town, Jiangchuan. The general manager is Liu Ming. The company is mainly engaged in circuit design such as main control circuit, audio decoding circuit and video decoding circuit, movement development, mechanical design such as shell structure and button layout, firmware program, playback control, menu display and other software development. This involves core secrets such as Aihua Electronics' self-developed movement, which must not be known to Liu Jinshi in advance.

The back-end product production is undertaken by Aihua Electronic Industrial Manufacturing Company, with Liu Dongsheng as the general manager. The location is the Aihua Electronic production base in Ziyun Town. It is mainly engaged in the production and processing, quality control and inspection, packaging and logistics of VCD players.

At the Aiwa Electronics production base, Liu Jinshi was able to see the entire production process of Aiwa Electronics DVD players.

After a few brief greetings, the group walked into the factory and passed through the security gate. The roar of the assembly line hit them in the face. Zhang Yunqi first accompanied Liu Jinshi to visit the circuit board production workshop and the movement assembly workshop.

The circuit board production workshop mainly deals with PCB production, patch welding, manual welding, circuit testing, etc. The group changed into dust-proof clothing and walked on the anti-static flooring. They could see that the automatic patch machine on the circuit board production line was handling Philips capacitors and resistors at a speed of thirty components per second. In the movement assembly workshop, workers wearing dust-proof gloves were installing laser heads, drive motors, optical lenses and other components on the movement frame at their workstations, with crisp and clear clicks.

Liu Jinshi was very interested in this and after Philips' second-generation movement was debugged and calibrated, he personally conducted a performance test on an assembled movement.

When Liu Jinshi saw the Philips second-generation movement accurately reading the CD data on the test bench, he smiled and said to Zhang Yunqi: "Your company's operating standards are first-class, with excellent dust-proof injection molding level, spindle motor stability, feed mechanism accuracy and shock absorption design. If nothing unexpected happens, the horizontal installation error of the movement is much less than 3°, and the self-developed servo system response speed and phase-locked loop (PLL) stability are quite high."

"Mr. Liu, thank you for the compliment." Zhang Yunqi smiled. He did not take Liu Jinshi's words to heart, because the core factor affecting the accuracy and stability of VCD disc reading is still the performance of the movement, and the Philips second-generation movement is undoubtedly the best performing one on the market. However, Liu Jinshi did not praise his own products, or he was too disdainful to praise them.

It took about an hour for the group to complete the tour of the production process. When they came out of the production workshop, Liu Ming, who was responsible for explaining and leading the way, took everyone to the office building of Aiwa Electronics to prepare for the meeting.

Just when passing by the component warehouse area, Liu Jinshi's pace suddenly slowed down, and his eyes were attracted by the four large trucks parked at the warehouse gate.

The doors of the four truck compartments have been opened, and the foreman is shouting in Jiangchuan dialect, directing the workers to unload the goods. On the dozens of unloaded cartons are printed the words "CXD2500AQ" and Sony's English logo.

Liu Jinshi was not surprised by the cooperation between Sony and Aiwa Electronics. He saw in the production workshop that the error correction algorithm used by Aiwa's wire body detector was still Sony's CSP-1013. What surprised him was that at this critical juncture, Zhang Yunqi seemed to deliberately let him feel the presence of Sony.

This purpose is obvious in business negotiations.

You know, at least so far, the cards and core demands of both sides have not been fully revealed, and on the surface everyone is still talking happily. Liu Jinshi realized that Zhang Yunqi needed this introduction to break this tacit understanding.

Liu Jinshi glanced at Zhang Yunqi, who looked calm beside him, and realized that winning the largest movement purchase order in Greater China to date might be more difficult than he had expected before he came.

Aiwa Electronics' office building was recently completed.

In the sunlight, the new blue-gray glass curtain wall exudes a metallic luster and is particularly dazzling. The main building has a geometric shape with sharp edges and a sense of technology. The cherry blossom forest planted in the front yard is in full bloom and pleasing to the eye. Zhang Yunqi and his party walked through the cherry blossom forest, stepped on the gray-white marble floor of the lobby, and took the elevator to the brand new conference room on the third floor with a faint scent of pine wood.

This meeting concerned high-level secrets of Aiwa Electronics, and not many people participated. They were all top executives, including Zhang Yunqi and Yang Jin, as well as Liu Dongsheng and Liu Ming. There was not much nonsense between the two sides. Yang Jin took out the draft agreement on cooperation between the two parties and distributed it directly.

Liu Jinshi took a glance at the draft, which contained some basic and non-controversial cooperation clauses. There was no need to discuss them. He paused and took the initiative to ask a particularly concerned and sensitive question: "Mr. Zhang, I believe your core supply chain has received strong support from Sony."

Zhang Yunqi did not comment: "Sony has always been an important partner of Aiwa Electronics. It has given us some technical compensation terms on digital servo systems. It is also the main supplier of our laser heads, optical components and decoding chips."

Liu Jinshi nodded: "Since Mr. Zhang has a partnership with Sony, I believe he has also experimented with Sony's movement on your company's new products. How was the result?"

Zhang Yunqi answered truthfully: "Stability and reading speed are inferior to Philips."

Liu Jinshi nodded: "Mr. Zhang is an objective person."

Zhang Yunqi tapped his fingers on the table. "Objective, but it may not be sincere in Mr. Liu's eyes. Then I will say something sincere."

Liu Jinshi extended his hand and said, "Please speak, Mr. Zhang."

Zhang Yunqi said, "Mr. Liu, the price of each set of CDM12 series movement supplied by Philips to us is 25 US dollars. You should be very clear about how much this cost accounts for in the entire VCD player." Liu Jinshi nodded, "Mr. Zhang, you can give us your ideas."

Zhang Yunqi said directly: "I have no idea about the price. I am willing to bear the cost and the selling price can remain unchanged."

Liu Jinshi was surprised by these words, but he remained calm and said, "What are Mr. Zhang's requirements for supply?"

Zhang Yunqi directly changed Liu Jinshi's "supply" to "purchase" and said: "Starting from April, Aiwa Electronics will purchase at least 10 sets of movements per month, and the annual purchase volume will not be less than 150 million sets."

Liu Jinshi's heart skipped a beat!
Last year, the total annual sales of Philips CDM12 series movements did not exceed 40 sets. Now Zhang Yunqi has promised to purchase 150 million sets in one go, which is nearly four times the total sales volume of Philips in 95!
You know, Aiwa Electronics has already obtained 20 sets of CDM12 series movements from Philips, plus the current 150 million sets, that is 170 million sets! The total purchase volume has far exceeded his estimate of one million sets.

Liu Jinshi really couldn't understand why Zhang Yunqi's market strategy was so radical. Although he was optimistic that the Chinese VCD player market would continue to grow, the young man's approach could no longer be described as optimistic, but fanatical! He used all his wealth, as well as the money from Jiangchuan City's fiscal budget, and even 30 million yuan from the provincial government, to stretch the financial leverage to the extreme and bet on the future of the Chinese video player market.

How crazy this is!
He even realized that if this gamble failed, Zhang Yunqi would most likely have to work on a sewing machine in a trading room for decades. However, the young man in front of him, who was not even twenty years old, had always left him the impression of being calm, pragmatic, mature, and not willing to give up until he saw the rabbit.

Liu Jinshi couldn't help but fall into self-doubt.

Of course, this is Zhang Yunqi's business after all. He is indeed very impressed by Zhang Yunqi's market analysis and foresight. Moreover, people look at problems from different perspectives depending on their position. As an upstream supplier of core components, as long as downstream buyers can pay for the goods on time, the bigger the business and the greater the purchase volume, the happier he will be.

Aiwa Electronics has strong support from the provincial and municipal governments, and is strong and well-funded. Once the 150 million sets of movement purchase order is completed, the expansion of Philips' Shanghai component production base will no longer be a problem. Liu Jinshi will also get a salary increase. This order is enough to support his transfer from Philips' component business center to the Greater China headquarters as a senior executive! He was inevitably excited.

Of course, Liu Jinshi is a smart man. Zhang Yunqi is so straightforward and throws out such tempting chips right at the beginning. It is impossible that he does not have conditions. Zhang Yunqi's previous move of using Sony as a chip even made him realize that Zhang Yunqi's conditions would be very harsh.

Thinking of this, Liu Jinshi said, "Mr. Zhang, let's talk business. If you have any ideas, you can bring them up."

Zhang Yunqi smiled and said, "Then I won't be polite."

Liu Jinshi said, "Please speak, Mr. Zhang."

Zhang Yunqi looked at Liu Jinshi and said, "I have three core demands. First, Philips exempts Aiwa Electronics from the $5 "patent pool" (such as MPEG-1 decoding technology) usage fee for each VCD player. Second, Philips provides Aiwa Electronics with customized movements around strong error correction functions based on the second-generation CDM12 series. Third, Philips opens the underlying movement protocol to Aiwa Electronics to help Aiwa Electronics adapt its products to the actual situation of the Chinese video disc player market."

As soon as Zhang Yunqi finished speaking, the conference room suddenly became extremely quiet.

Liu Jinshi looked a little depressed.

Liu Dongsheng felt his throat itchy and subconsciously reached into his pocket for a cigarette, but seeing the depressing atmosphere in the meeting room, he put the cigarette back. In fact, he didn't really listen to the conditions proposed by Zhang Yunqi. At this moment, his mind was full of thoughts about the 150 million movement sets.

150 million sets!

Although Aihua Electronics' production base has a target production capacity of 100,000 VCD players per month, this needs to be achieved in stages. They simply cannot reach this capacity at the moment. Even if Philips supplies and settles the payment on a monthly basis, it will definitely have a huge impact on his production line, inventory, and worker management. Moreover, compared to these, what worries him most is the huge pressure and hidden dangers in the capital chain.

You have to know that this huge order is larger than the total sales of DVD players in China last year! If it is completed, he, the general manager of production, can't imagine how Aiwa Electronics can achieve a dynamic balance between production and sales, which is precisely the lifeline of their electronics company.

Once again, he experienced the radicalism of his boss!
At this moment, Liu Ming, who was sitting next to Liu Dongsheng, was also in a state of ups and downs in mood. However, as the chief technology officer of Aiwa Electronics, Liu Ming's focus was completely different from Liu Dongsheng's, and his feelings were naturally completely different as well.

At this time, his nervous palms were clenched into fists!
He knew very well how demanding these requirements were, but how important they were to the development of Aiwa Electronics! Once the other party agreed to their conditions, it would mean that Aiwa Electronics would have mastered the ability of "super error correction", thus forming a cross-generational technological advantage. He could even be sure that there would be no more competitors in the Chinese DVD player market worth fighting against in the next year!

It's just that he knew Philip's character too well.

They often adopt an overbearing strategy of market price squeezing towards downstream buyers. It is almost impossible for Liu Jinshi to agree to technical support, and it is even more unimaginable to customize the movement for Aiwa Electronics. However, Liu Ming is so eager for Liu Jinshi to nod that he looks at Liu Jinshi opposite him, trying to keep a calm face, but his clenched palms under the table are sweating.

Liu Jinshi stared at Zhang Yunqi. No one knew what was going on in his heart at the moment. After a long while, he put down the draft agreement and said, "Mr. Zhang, although we are talking about business, I'm sorry, it's hard for us to accept your requests!"

Zhang Yunqi smiled and said, "Boss Liu, if I sign this contract, it will be a 400 million yuan deal. If you find my terms unacceptable, I will not force you."

At this point, Zhang Yunqi slowly stood up and said, "There is only one thing I need to tell Mr. Liu. Sony requires Aiwa Electronics to completely terminate its cooperation with Philips in exchange for movement technology support!"

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