The Shijiazhuang facility, in the Hebei province West of Beijing started off as a joint venture between Husqvarna and the Chinese manufacturer Jikai Diamond Tools. Husqvarna AB became 100% owner in 2010. Today the production in Shijiazhuang is completely different.  “We are implementing at Shijiazhuang what we have already achieved at our Xiamen operation, where we produce a wide range of light equipment . This factory is working very well under the leadership of Greg Wu, a local Chinese, who worked with me since 2009 and who is now 100% responsible for the operations, ” said Husqvarna, head of operations China, Marc Segers.

Still high growth rate

“Our overall strategy with our diamond tool development and manufacturing in China is to be the expert and number one producer in the world providing top of the line products in terms of quality and performance and to become the most flexible factory around, so that we can face the always tougher demands from our customers. Of course, all this has to happen at the right market price”. 

The gap in labour costs between China and Europe is gradually shrinking. Salaries currently increase between 5% to 8% per year in China. And most of the young Chinese are well educated and demand salaries, which correspond to their education and knowledge.

In recent years the Chinese economy has started to slow down. However, the growth rate is still around 6.5% and represents one third of the world growth. The Chinese currency RMB is weakening against the USD and Euro since one year, which will improve exports, but make imports more expensive. China has a big demand for raw materials and although they have large domestic resources the need for imports is quite high and that might cause problems with increasing costs.

Flexibility is the key

Segers said that diamond tool manufacturers have to be very flexible. Concrete cutting is perhaps the industry with the less foresight, which puts a high demand on diamond tool producers to deliver the right tool with short delivery times. Flexibility is paramount. “Skilled, flexible and well-educated diamond tool specialists are needed to develop and provide the clients with the right type of diamond tools with optimum performance,” said Segers.

During the Jikai era production was mostly OEM of sintered blades. More high-end diamond tools are now produced since Husqvarna took over and very little is OEM. “Jikai had only one person working in research and development and now we have 15 in that department,” said Segers.

Head of research and development is Hamlin Li who works closely with the research and development department in Ath, Belgium. “Today we work and provide special diamond tools for the whole Husqvarna group, not only for markets in the Far East. We get regular requests from Husqvarna Product Managers all over the world, who require certain diamond tools for special applications,” said Hamlin Li. “The time to develop a new diamond tool varies. It depends very much on the tool and what it is to be used for. We have a large range of existing products and sometimes we only need to modify an existing product and in that case the development is short”, says Hamlin Li.

The diamonds used in Shijiazhuang plant come from China and the powders are mixed in the Shijiazhuang plant. “I can say that we are really good at this:  perfect and consistent mixing and sintering are key in our process and the basis for quality products. Not one product can leave the factory that is not perfect. It is a trick to create the right mixture. It is a little bit like cooking,” said Hamlin Li.

Efficiency through Lean manufacturing

Shijiazhuang is quite different from Xiamen and is also located inland and not close to the sea like Xiamen. “We have a really great set up here in Shijiazhuang and we are well ahead of becoming the most efficient plant in the whole Husqvarna group and by end 2017 we will be the top diamond tools factory in the whole world,” said Segers.

A lot has changed at the premises since Husqvarna acquired 80% of Jikai Diamond Tools, in 2006 and the reminder in 2010. The Husqvarna plant in Shijiazhuang is the only one in the region in foreign ownership. “Personally, I got involved since mid-2013.   I changed most people in the management,  I was very careful and hand-picked the new  team, people are key and it is so important to develop a balanced team that also carries our unique Husqvarna culture” said Segers. “Most of the people in the management have experience from working with North-European, USA or Japanese manufacturers and they all come from other parts of China. Originally the factory was started in 1982 and at that time labour was very inexpensive in China and it was very easy to hire people. So the number of employees was high, but the efficiency considerably low. We have changed all that. Now we have fewer employees and a much higher level of efficiency and automation, which improves the quality and the reliability”

A lot has changed at the Shijiazhuang factory. The factory once covered an area of 23,000m2 of office and production facilities in 20 buildings. Now only a third is used for the highly automated manufacturing with much higher capacity. The empty buildings will be sold. The production facility contains mainly laser welded blades and bits, brazed blades, cup wheels and grinding pads and large sintered diamond tools. With all the production changes, employee numbers has dropped from 600 during the Jikai period to about 250. The factory is certified according to OSHA, ISO 9000 and ISO 14000.

The Shijiazhuang factory operates according to HOS, which, is the Husqvarna Operating System, it is based on the Lean principles.  Driver of the lean implementation is Kevin Cao, the Production Manager, who, in 2017, will take over as Operations Director.  Continuous improvement is part of the employees daily life. Since the start of the Lean culture, 1,600 projects have been realized, which came from 2,300 ideas, submitted by over 60% of the employees.  As safety and quality are most important to the factory, special awards and KPI`s are set to measure and encourage the ideas that come from the operators themselves and focus on safety and quality. “ It is such a fantastic feeling, if I see how our people started to believe in what we do and how they joined in, came with ideas and take proud of what they achieved “, says Kevin Cao.

Safety first

“We work with ideas to improve our work on all levels. For instance safety in the factory has been considerably improved. We have very few injuries each year and want to reach zero. That is our goal. Further, all hazardous liquids and other dangerous substances are locked in a separate storage shelter outdoors. This shelter is even lowered in the ground and we have separate procedures to enter the room. Earlier hazardous substances occurred on different departments all over the factory. Now they are all in one place,” said Kevin Cao.

“We do this project together with the Shijiazhuang Safety bureau. They audit us, we agree on the actions, implement and get re-audited. We meet each 3 months and by end 2017 we will be the benchmark for the whole city for safety. It is one of our sustainable activities. We want to invite other companies and technical schools to our facility to show them why and how we did it and what we benefit from it. Most Chinese companies still believe that safety is too expensive and it affects their profitability, we want to show that the opposite is truth,” says Segers and he continues: “We believe very much in win-win situations, the Safety Bureau helps us to become the reference in safety for this area, we help them with extra training on how to efficiently use and maintain power cutters and chain saws. After all, we have the same common goal, which is to efficiently and effectively do our job. They try to minimize the number of casualties in case of big disasters and we offer products and support that can help them achieve this goal “.

Less waste has many advantages

Another area where the Hebei factory tries to lead by example is to minimize deposited waste. Today the recycled level of waste is 62% at the plant. The project just started and for 2017, the target is already set at 70%.  “The Shijiazhuang plant is 100% in line with all regulations set up within the Husqvarna Group and our goal is to be number one within the group in terms of sustainability. Also in terms of energy consumption, we implemented several actions and we are well below set goals within the group,” said Kevin Cao.

Before and during the Jikai era, production used 550 small trolleys to move products from one place to the other. In Lean terms this is considered as a huge waste as well. The trolleys now dropped to just over 100 as the company succeeded in reducing its WIP, reducing lead times and it linked the different machine sections with each other through conveyer belts, some even moving segments over conveyer belts hidden in the floor.

Community work

Husqvarna also aims to take an active part to improve the city where they operate. Some time ago Husqvarna decided to take action to clean the surrounding area close to the factory and proclaimed an Earth Day. Several schools were invited to help and clean the streets and parks from waste. The project turned out to be very popular and involved a lot of young students and several employees from the plant and again, it were done together with the local government. It is their way to establish a professional relation with the authorities, to show kids how the world could look like and to do some team building. It is done in a period when they can allocate some resources to the project and as such, it does not affect the KPI`s. 

“We also support a local hospital for mentally and physically disabled kids, which operates on donations. As we have lots of experience in safety and maintenance, we offer our knowledge to make the facility a warmer and safer place to be for the 26 kids. Employees collect some money to buy rice, noodle etc.  Again, these activities might feel like they are a drop in the ocean but for the kids it has a big meaning. It gives us a good feeling and we do it, because we know it is the right way to do. We all work hard to make our company the best in class, but sometimes, we also have to look over our shoulders and face the reality of life,” Segers concludes.

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