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In November 2013, on the 7th, Xinan Business Consulting Co. delegated an interview between ITW Purification Co., Ltd.'s Luo Youping and Zhang Haosheng in Wujiang on behalf of their customers.
Time: November 7, 2013 13:55-14:55 Luo Youping
November 7, 2013 17:35-18:25 Hao Sheng
Location: Suzhou city Wujiang Economic Development Zone on the Far East Avenue, No. 1168 (Serene Garden Hotel's lobby)
Persons at the Interview:
Luo Youping, ITW Purification (Wujiang) Co., Ltd. - Eastern China Regional Sales Manager
Hao Sheng, ITW Purification (Wujiang) Co., Ltd. - Head of Production
2. Luo Youping Interview Summary
2.1 Interviewer and Interviewees' Self Introductions
Luo Youping (Seven LUO), from Jiangxi, currently living in Suzhou City. In November 2010 I started working for ITW Purification (Wujiang) Co., serving as the Eastern China Regional Sales Manager, being responsible for sales in Jiangsu, Zhejiang, Shanghai, Anhui, Hubei, Jiangxi and other areas as well. Since I have started working for the company, there have been 3 different bosses, the current incumbent is Henry YANG (General Manager). He has expressed that I did a good job in sales in the Eastern Region, and in the three years of being employed by this company, I have been relatively happy. The problems that need to be addressed today do not have too much to do with myself, but they are more related to Texwipe.
2.2 The Problems Addressed in the Interview
2.2.1 Factory Waste Problem
After Henry YANG started working for the company, he replaced the old waste recycling agency with a different one, causing the recycling rates to be much lower than before.
TX609's (The non dusty cleaning paper) corner edge's material have been donated to waste collectors. First of all, giving these materials to recyclers will cause a loss for the company. Secondly, the raw materials are duty free materials, and according to procedure, the waste that is produced must be declared to Customs, the taxes on them need to be paid at a later time, and in this way, it will impact our company's costs.
2.2.2 The Issues with Bribery
Every employee of the company is required to sign an anti-corruption agreement, requiring them to not bribe their customers.
There was a meeting around August 2013, where Henry YANG proposed the concept of having “An Intermediary Person”. He had expressed that if we encounter customers who need a rebate, we can use the concept of “An Intermediary Person” to achieve our objectives. Also, Henry YANG has expressed that he himself will demonstrate how this might work, including meeting with people and having negotiations with “Intermediaries” to talk about the rebates, and also that Luo Youping can simply provide Henry YANG with the information on the parties that need rebates. At the time of the meeting, the Southern Region Sales Manager, the Northern Region Sales Manager, and the Marketing Manager were all present.
Q: Have there been any specific operations like that from August 2013 til now?
Whether or not there have been operations like that is unclear. Sometime ago, Wu Xi Green Point, a customer who usually orders large quantities from us (Also a new customer this year), Wu Xi is considered to be in the Eastern area, and just like in previous situations,Luo Youping had contacted this customer on his own [This Sentence is incomplete or lacking some content in Chinese. -Trans] But on this occasion, Henry YANG told the client that this was a special situation, and that Henry YANG himself will be working on the operations,Luo Youping was never in contact with any of the people of Wu Xi Green Point. Right now, the business with Green Point has ended, Luo Youping wasn't involved in these operations at any point, with the specific reason for that being unclear.
2.2.3 Problems with the Distributors
Luo Youping has expressed that he has always been the one to contact the distributors and customers who are within the districts that he is responsible for. On October 31, 2013, after the exhibition, Xia Jing from the Marketing Department instructed Luo Youping to get in touch with their new customer, Cyber Enterprise Management Consulting Co., Ltd. in Suzhou.
On November 4, 2013, Luo Youping met with Suzhou Cyber Enterprise Management Consulting Co., Ltd.'s Peng Lei (Legal Firm), Peng Lei talked about how this company was established in August of this year, with the company's main business being in corporate management and consulting and clean fabric products. Peng Lei personally was engaged in making vacuum cleaners, and was completely unfamiliar with our company's business. However, the business card that Peng Lei presented to us, already had Taxwipe's LOGO printed on it.
Peng Lei had told Luo Youping that he himself and Henry YANG's friends had jointly started Suzhou Cyber Enterprise Management Consulting Co., Ltd., and that they did not disclose to anyone the specific proportion of the company's shares, but they had a registered capital of 500,000 Yuan, with only two employees in the company. Since the start-up capital was just 500,000, they first of all needed to work cooperatively with Texwipe for a period of time, in order to expand their own enterprise.
Luo Youping had felt like there were some problems with this distributor, and in accordance with his company's procedures, had set up an auditing system, the results which he reported to his superior auditors afterwords, but his company's superiors have told him directly about how there is this distributor now.
Suzhou Cyber Enterprise Management Consulting Co., Ltd.
Address: Suzhou city Wuzhong Road Yin New Road No. 98 Building No. 5
Corporate Legal Liason: Peng Lei
2.2.4 The Problem With the Private Use of the Company's Bus
The company has specialized car bumper stickers, yet the company's drivers complained about going to Suzhou every weekday morning at 6:00am to pick up Henry YANG, Xia Jing and the others to come to the company offices in Wu Jiang, and that the drivers needed to drive them back to Suzhou after work, all in all they have confused the company's bus with a shuttle. The fuel costs and the other expenses of the car is a pretty big overhead.
During holiday vacations, Henry YANG would ask the driver to fill the car up with gas, and to give him the car.
Henry YANG counted the fees of having his own car into his salary, this way the social security base amount will be even higher. (You can learn more from the Finance Department).
2.2.5 Recruiting and Hiring Problems
Sophia used to be in the products division, with no procuring experiences, but now she is the purchasing manager, the former one, who had already been driven away.
Sophia and Henry YANG had a close relationship, Henry YANG sent Sophia flowers when it was her birthday, the other employees never received this kind of treatment. The company's purchasing and distribution aspects were always operated by Henry YANG and Sophia.
Xia Jing is currently working as the Marketing Manager for Texwipe, he has been with the company for 11 years, was born in 1985, and he didn't have this kind of work experience in the marketing department before, and reportedly, Xia Jing and Henry YANG met each other a long time ago in Suzhou.
Currently, the new equipment manager (who had met Henry YANG while working together at Samsung), the former equipment manager had been fired. [The Chinese text here seems to be an incomplete sentence – Trans.]
The company's many important positions, all seem to be filled by those who are relatively close to him, and there are lots of things that can be done without the involvement of the Marketing Department, but they end up involving them anyway.
2.2.6 The Issue with the Raw Materials
What Luo Youping learned from running the market, was that the companies that are selling their products on the market today, all have competitors who can produce similar products of the same quality. Ever since Henry YANG started working, there have been some raw materials that were acquired from Suzhou Jingwei Company (The competitor). First of all, this has a direct impact on the company's brand. Secondly, there are problems with the raw materials.
The boss of Suzhou Jingwei Company met Henry YANG while working together at Samsung. Henry YANG used to be an engineer in Samsung's Semiconductor Engineering Department.
2.2.7 Others Issues
The selection of the procurement price quotes and vendors, are now completely decided by Sophia and Henry YANG.
During China's National Day Holiday Period, the company spent around 200,000 Yuan to make a centrally raised floor, this price was a lot higher than the current market price at the time, with the contract also being drafted, agreed and signed retroactively, in this way, they did not follow the proper bidding procedures.
Many older employees have left, with more or less all of them leaving because of Henry YANG, Luo Youping's former boss Ken, the Operations Manager Jason ZHOU, the Equipment Division's Manager, and the procurement manager, have all left the company.
3. Zhang Haosheng's Interview Summary
3.1 The Interviewees' Self Introductions
Zhang Haoshang (Paul ZHANG), who is from Wujiang, started working for ITW Purification (Wujiang) Co., Ltd on January 6th, 2011, as a production engineer, in April of 2012, he was promoted to the Production Supervisor position, his main responsibilities were managing and supervising the production line, production planning, managing production supplies, and the production equipment.
3.2 The Interviewer's Responsive Questions
3.2.1 The Factory's Problem with Waste
From the beginning, the company has used the same waste recycling plant for around 3 years or so, with the use of Kunshan Hua Shi Tang (Supposedly Sophia's uncle) at some point in between these 3 years. Now we use a company called Coral Waste Company (The name changed after Henry YANG started working for the company), the leftover mill ends of the non-woven scraps have all been given to the waste company, (It is estimated that there are a few tons each month, it varies based on the production amount, with each kilogram valuing at 2 Yuan or so) other waste recycling rebates are also much lower than before.
3.2.2 Recruiting Problems
Zhang Weiping (Equipment Manager), in the beginning of September 2013, Henry YANG called together a meeting to talk about recruiting a manager, the former equipment manager had left the job in August. On September 10th, Henry YANG went to the U.S. to attend meetings, but even if they followed the company's normal hiring procedures, the new person could only be hired by November at the earliest, but when Henry YANG returned from the states on October 7th, Zhang Weiping had already started working by October 8th.
Xia Jing joined the company in April of 2013, she had no sales background nor customer resources, but nonetheless she became the marketing manager right from the beginning. Her position didn't exist before, and the company needed to fire several people just so they could get her in. Actually, I heard that Xia Jing is a relative of Henry YANG's wife (You can learn more by talking with Sharon).
3.2.3 Supplier Problems
Sophia once had worked as a production engineer, she had no experience in procurement or warehousing whatsoever, and they hired Lucy when the operations manager Jason ZHOU was there, she was particularly responsible for the procuring department. After Jason ZHOU had left in June of 2012, Sophia was appointed to be in charge of procurement, and customs, and was given the position of being the warehouse supervisor in July. After Sophia took office, there was a lot of rotation and switching around of which suppliers to use, the suppliers who provided materials that did not affect the product's features were all replaced with new ones.
There have been new suppliers coming in in the civil engineering department, this year all the work regarding climbing onto the roof, building houses, and flooring were all done by this one company. At the end of September 2013, with the epoxy and flooring work needing to be done, there was only one company who came to perform the work, our company didn't compare the procurement prices, which was a breach in regular procedures, yet after the epoxy and flooring was finished, in just the first week, the condition it had turned into, was a state where repairs were already needed (You can check here with the finance department).
Sophia was the only one who did the searching and approval of suppliers, as there were problems in the system. Many times, the suppliers came from Henry YANG.
The maintenance of the company's American air conditioners, in the end was repaired by someone who was from Henry YANG's hometown, the quote for each air conditioner was only 100 Yuan lower than Mei's quote [I'm not sure about this sentence. I don't know what 美 is referring to here. -Trans.] The newest compressors were actually second hand ones, and they required them to be turned off after running for a period of time.
The company's IT maintenance positions, Henry YANG had outsourced them to his friends from his hometown, and they in turn subcontracted the jobs to a third party, this can be confirmed by speaking with the human resources administrator.
Zhang Haoshang had heard that a lot of the fabric suppliers were Henry YANG's friends, the raw materials of the plastic bags that the company had purchased, and that the processors, which were sought out, had made them into the finished product.
3.2.4. The Problems with the Production Line Workers
Henry YANG replaced the cleaning company, the current cleaning company is someone Henry YANG had hired and found in Suzhou, I had heard from our finance department that the temporary cleaners were making 4000, our temporary employees only make 2000, because there were some empty production line positions still needing to be filled, Henry YANG had required us to recruit workers from Procter & Gamble, in order to supplement our deficiency in workers, the most amount of people we hired was 8, but right now there are 5 employees.
Because Henry YANG is from Shanxi, he had gradually set up a Shanxi group of workers. Out of all the production line workers, 1/3 of them come from Shanxi.
3.2.5. Zhang Haoshang's Personal Speculations
Xia Jing is responsible for procurement, Zhang Weiping is responsible for production, QA, and warehousing, and Sophia is responsible for suppliers, with these three people plus Henry YANG in our company, it makes it easier for other companies to copy the ITW business model.
Green Point and Mission Hills in Shenzhen's Foxconn originally had made some orders. On July 22, 2013 after Green Point had made an order with us already for a period of time, they actually ended up canceling the order in August. These things had happened after Henry YANG had been in contact with Foxconn. (Research here is needed).
Bachelor's degree - University of Massachusetts, Amherst
Years of experience: 10. Registered at ProZ.com: Dec 2007. Became a member: Oct 2012.