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OEC Mgmt control at Haier Group
- 1984, Haier was nearly bankrupt refigerator factory.
- 2003, the company global sales hit $9.7 billion with a growth rate of 70% during the previous 19 years.
- Today, Haier Group reconginzed as a worldwide brand.
- OEC , O stands for overall. E stands for Everyone, Everything, and Everyday, C stands for Control and Clear.
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BUSINESS STRATEGY
- Haier follow three stage of strategy:
- Brand building: the company created and built Haier-brand products and set up a quality-assurance system.
- Expansion or Diversification: Haier decided that if someone bought a Haier Group refigerator, then maybe they would want to buy something else from the firm.
- Globalization: Haier exported its products to Germany first, then to other European countries, the U.S. Southeast Asian countries, Middle Eastern countries, and India.
- Two other key business strategies at haier relate to winning over consumers: speed and differentiation.
- Speed means to satisfy the consumer's needs as quickly as possible.
- Differentiation means to introduce brand-new products or products with features to meet different needs.
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HOW DOES OEC MGMT WORK AT HAIER?
- Focus on and understand customer value, product quality, operating efficiency, innovation, and speed to market.
- Commit top mgmt and leadership to creating a "new way of mgmt" and a performance culture.
- Involve mgmt and employees in creating the OEC mgmt-control system.
- Educate mgmt and employees.
- Create desired incentives, and reassure employee that they will be properly evaluated in accordance with their performance.
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TARGET SETTING
- Each division submits a divisional action program form with respect to its annual guidelines and goals.
- Following are the examples from each of the seven OEC items.
- Production Plan
- Quality
- Technology level and production discpline
- Equipment
- Material
- Labour Displine
- Production Safety
- Other Awards and Penalties
- Endorsement
- Inspection and Review
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Control, checking and clearnace: The OEC daily clearing routine
- Each team supervisor gives a daily briefing to workers before they start their work.
- Producion workers conduct their activities by following the seven OEC criteria to check and control
- Supervisors conduct on-site inspection tours every two hours, detect and solve problems, and complete the product
- At the end of the day, all workers conduct a self check of their own work with the OEC form with the seven OEC criteria items.
- At the end of the day, all workers conduct a self check of their own work with the OEC criteria, fill out their 3E.
- Each supervisor examines the 3E cards, corrects errors, gives a comprehensive evaluation, and submits the evaluation results to the work area manager.
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THE EMPLOYEES WHO ARE ACHNOWLEDGED AS THE BEST WORKERS FOR THREE CONSECUTIVE DAYS HAVE THE HONOR OF TELLING THEIR EXPERIENCES TO FELLOW WORKERS.
- Each work area manager checks the sample 3E cards then fills out his or her own 3E card and submits it to the factory director.
- Each factory director reviews the 3E cards and records the results in the factory OEC account.
- The Deputy Division General Manager reviews daily progress reports and suggested soultions and provides feedback defore reorting to the division general manager.
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INCENTIVE MECHANISM
Haier's third subsystem is the incentive mechanism, and is incentive policies are openness and fairness.
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