Voice of the Raw Materials Association of Friction Materials in Huangshi City, Issue 2, 2016

Business Implementation Plan for the Zhaoyang Area (Draft)

(Xinyi Company, Wang Dong)

1. Unify thoughts, reach consensus, and sign a self-discipline agreement. Currently, businesses in the Zhaoyang area operate independently, with no interaction and a focus on profit, leading to vicious competition and price wars. Since everyone recognizes this unfavorable situation, we should unify our thoughts, band together, reach a consensus, and promote unity by signing a self-discipline agreement to regulate our market behavior and create a good market environment.

2. Establish penalty measures and collect breach of contract fines. Once a consensus is reached, businesses should unite and support each other to maintain this hard-won market environment. Companies that violate agreements must face corresponding penalties, thus relevant penalty measures need to be established for protection. Collecting breach of contract fines ensures fairness among businesses, with penalties directly deducted from the fines.

3. Establish a supervision team. This team will be responsible for monitoring the market operations of member companies in the Zhaoyang area. If violations are discovered or reported, the team will investigate and verify before reporting to the association for handling. It is suggested that the team members be composed of personnel from businesses operating in the Zhaoyang area, with Zhao Liefa, the vice president responsible for the Zhaoyang region, serving as the team leader, and members including Shi Dahai, Wang Youshi, and Wei Yangzhi.

4. Unite in business to improve product quality. Businesses in the Zhaoyang area should unite and present a united front, avoiding internal conflicts to maximize product profits. First, establish product sales standards and sell products in the area according to these standards. Second, ensure quality on the basis of unified pricing to avoid substandard products that could harm the reputation of the association and businesses. Finally, strive to ensure that no more than one company supplies the same product to the same customer.

5. Share information and hold exchange meetings. Due to a lack of communication among businesses, the Zhaoyang area faces severe issues with debts and overdue payments, with some customers defaulting on payments to multiple companies. To prevent this situation from developing further, we should hold an exchange meeting every quarter to report on sales and payment collection situations in the Zhaoyang area. Companies with serious overdue payments should have their supply stopped and be placed on a blacklist. For companies with overdue payments, shipment volumes should be controlled. Additionally, sales personnel from each company should speak freely to ensure transparency, openness, and sharing, providing reference for other companies.
 

On the Penalty Measures for Disorderly Competition and Mutual Destruction among Enterprises

Research Report

(Xinyi Company, Yuan Xiuliang)

After more than a decade of development, the Huangshi area has become an important production base for friction material raw materials in China. On February 25 of this year, several major raw material manufacturers in the Huangshi area jointly established the Friction Material Raw Materials Sub-Association, which made its official debut at this year's Nanjing industry exhibition, attracting industry attention. The main purpose of establishing the sub-association is to develop together and strive to make it the most trustworthy and influential friction material raw materials sub-association recognized by the majority of enterprises and entrepreneurs in the industry. However, the current situation of the sub-association is that some enterprises engage in substandard products, low-price dumping, disorderly competition, and mutual destruction, severely damaging the credibility of the sub-association and hindering its healthy development. For such enterprises, it is necessary for the sub-association to introduce penalty measures and preventive measures, and propose solutions to standardize and guide the market behavior of all enterprises, aiming to purify the market, ensure orderly competition, and promote healthy development.

1. It is recommended to establish an industry self-discipline committee and issue relevant institutional documents.
Among peers, a community of interests has largely formed, protecting the legitimate interests of peers and competing with opponents through legitimate means, which also protects oneself to some extent. Disorderly competition often leads to a 'lose-lose' outcome, affecting both self and others' development, and harming the entire industry. How can we fundamentally eliminate the hidden dangers brought by vicious competition and restore fairness and reasonable order to the market? Relying solely on self-discipline among enterprises cannot fundamentally eliminate these problems; a series of systems are needed for protection.

The sub-association can establish an industry self-discipline committee to issue a series of systems that clearly define improper competition behaviors, such as infringing on trade secrets, low-price dumping, defaming business reputation, counterfeiting, and imitating trademarks, along with corresponding penalty measures. If a member files a complaint and provides materials that are verified by the industry self-discipline committee, penalties can be imposed on enterprises involved in vicious competition. Penalty measures can include market actions, such as prohibiting sales of certain products to specific customers for one year, or economic penalties, such as fines ranging from 20,000 to 100,000 yuan. It should be noted that economic penalties must be strict and severe; low fines do not affect a company significantly and cannot curb improper competition behaviors. A light touch will not lead to reflection, and other companies may easily follow suit when they see low violation costs. Increasing the severity of penalties can serve as a warning.

2. It is recommended to set sales guidance prices for several sensitive and important products.

More than a decade ago, the market price of chrome ore powder was generally above 3,000 yuan. Starting in 2003, many family workshop enterprises emerged in the Huangshi area, producing shoddy products, counterfeiting, and competing on price, leading to prices as low as a few hundred yuan for chrome ore, resulting in severe disorderly competition, frequent quality accidents, and damaging the image of the raw material industry in Huangshi. The market price collapsed, profits were thin, and enterprises found it difficult to develop. It is recommended to set a sales guidance price for several sensitive and important chrome ore products, which all member companies of the sub-association should adhere to, moving forward together. The guidance price can be adjusted based on market fluctuations, with notifications issued by the industry.

3. It is recommended that the sub-association introduce policies to guide enterprises towards healthy competition.
Where there is a market, there is competition; competition is a normal market behavior, and healthy market competition can lead to a win-win effect. The sub-association can guide enterprises to engage in orderly and healthy competition. 1. Guide enterprises to practice industry self-discipline; commend and promote enterprises with good reputations; 2. Encourage enterprises to establish brand protection awareness and guide them to apply for trademarks and declare famous trademarks; 3. Encourage enterprises to vigorously develop new products, improve product technology content and added value, and reduce product homogeneity in the local industry.
 

Voice of the Raw Materials Association

(Duxin Company, Zhu Chunping)

On February 2, 2016 (Lunar Calendar December 24), Duyin City Duxin Friction Powder Co., Ltd. held its first '2015 Annual Awards Ceremony and New Year Celebration.' During the meeting, three individuals who were proactive and made outstanding contributions were recognized and awarded certificates and bonuses; the celebration included tug-of-war and lottery activities, with team rankings determined through competition, and encouragement awards and participation awards given to the ranked teams; the lottery was entertaining, bringing joy to the New Year amidst cheers.

Duxin was established and began operations in August 2013. With the development and progress of the enterprise, we no longer present ourselves as individuals or family models, but as a corporate structure in society. In order to strive to build the corporate image, enhance corporate cohesion, combat effectiveness, and create a new situation of unity and harmony, boost employee morale, and inspire employees' enthusiasm and creativity for work, the company held its first '2015 Annual Recognition and Spring Festival Celebration' on February 2, 2016. At the meeting, based on the five evaluation criteria decided by the chairman's office meeting, including 'ideological and political awareness, civilized harmony, safety production, business capability, and unity and dedication', self-summaries, mutual evaluations, and voting were conducted, resulting in the recognition of three advanced individuals: Wu Zhijia, Shi Yancheng, and Zhang Qiuzhen. Chairman Zhao Lieyi awarded certificates of honor and a 600 yuan bonus to the three advanced workers.

In order to motivate employees' enthusiasm and creativity, overcome the current difficulties of economic downturn both internationally and domestically, identify our existing problems and shortcomings, and better stabilize our position during the economic downturn, Chairman Zhao Lieyi proposed seven requirements for employees at the summary and recognition meeting: First, correct our mindset, take our positions seriously, establish a sense of dedication to our jobs, fulfill our responsibilities, and strive to complete our work tasks; second, diligently study business theories, continuously improve our work capabilities and levels, and creatively build the Duxin company brand quality to provide high-quality products for users; third, establish a mindset of treating the company like home, overcome the mentality of just getting by, as our interdependence and shared honor and disgrace concern everyone's survival, and cherish the opportunity we share in entrepreneurship today; fourth, strengthen unity and cooperation among employees, whether in production, sales, or logistics, we should treat each other like family, without distinctions of closeness or blood ties, treating everyone equally, respecting each other, and being polite; fifth, all employees must comply with the company's management rules and regulations, ensuring no tardiness or early departures, clocking in and out on time, and adhering to regulations, as everyone is equal before the rules; sixth, strive to reduce energy and material consumption during the raw material processing, effectively control production costs; every piece of paper, pen, and drop of water in office expenses is created by our sweat, so we must pay close attention to saving every penny in our work; seventh, establish a spirit of dedication, as a company is like a country; if each of us only seeks to take without giving, our country will not be a country, and our home will not be a home. If the company goes bankrupt, you can find another job, but if the country goes bankrupt, where will you seek help? Dedication is the responsibility and obligation of each of us. The three comrades we recognized above have demonstrated their advanced nature and are typical representatives. Through this recognition activity, we should further establish the idea that the honor of the enterprise is our honor, stimulate employees' work enthusiasm and spirit of dedication, and earnestly do our jobs well.

The tug-of-war competition showcased the team spirit of the employees. In the tug-of-war competition, after three rounds of competition, the importance and strength of each individual were highlighted. The lottery activity became the grand finale of Duxin's first event, with the meeting room filled with voices, cheers, and laughter, pushing the lottery activity to a climax. The old accountant Liu Hechun held up the 200 yuan grand prize high, and all the employees present looked at him with envious eyes.