Xindafang Holds a Special Meeting on the 2013 Work Plan

　　Chairman and President Zhang Zhihua, together with Executive Vice President Chen Hao, emphasized at the 2013 Work Plan Conference:

　　Vigorously pursue transformation and upgrading, and achieve the integration of manufacturing and service industries.

　　Xindafang News: On the morning of April 9, Xindafang convened a special meeting to discuss the 2013 work plan. The meeting was attended by Chairman and President Zhang Zhihua, Executive Vice President Chen Hao, Vice President Gao Huijie, and other relevant leaders at the mid-level and above, who jointly deliberated and formulated the company’s 2013 work plan and objectives.

　　At the outset of the meeting, Chen Hao analyzed the international and domestic economic landscape and, in light of the current market conditions, clearly articulated the company’s overarching objective for 2013: to vigorously pursue transformation and upgrading—shifting from a mere equipment supplier to a provider of comprehensive solutions—and to achieve seamless integration between manufacturing and services. To ensure the successful realization of this goal, the company meticulously broke down the tasks, targets, strategic approaches, and improvement measures that each center and department is required to accomplish.

　　For the Marketing Center, the primary focus in 2013 remains consolidating existing markets while accelerating the development of new markets and expanding into overseas markets, all while ensuring timely cash recovery. The overall marketing strategy can be summarized as “one transformation and five key areas of emphasis.” The transformation involves moving away from the narrow “marketing equals sales” mindset and adopting a more comprehensive “business operations plus sales” approach—shifting from being a mere equipment vendor to becoming a provider of end-to-end marketing solutions and bundled service packages. The five key areas of emphasis are: the shifting focus of railway construction; the rapid growth of urban rail transit, water conservancy projects, shipbuilding, and logistics systems that encompass railway marshalling yards and ports; and the need for the Marketing Center to make thorough preparations, conduct in-depth market research, leverage our company’s strong R&D capabilities and flexible, agile marketing and service mechanisms, and align these strengths with the unique features and superior performance of our products to respond swiftly. By doing so, we will gain a competitive edge in market expansion, secure early entry into emerging markets, and lay a solid foundation for product upgrading and business transformation.

　　Innovation is the soul of an enterprise and the very foundation of our company. In 2013, the Technology Center will base its work on the company’s strategic development plan and focus on technological innovation in seven strategic emerging industries: new energy, new materials, bioengineering, next-generation information technology, energy conservation and environmental protection, new-energy vehicles, and high-end equipment manufacturing. Design personnel should strive to standardize technical requirements related to welding, various tolerances, and machining datums, strengthen the standardization of design drawings, and improve design quality; they should also accelerate the adoption of 3D and virtual design to reduce the rate of design errors. In addition, it is essential to enhance design personnel’s awareness of innovation in engineering service technologies, ensuring that the design process is closely aligned with engineering service solutions and that marketing efforts are coordinated to gain a deeper understanding of customers’ true needs. This will make product designs more scientific, rational, practical, and easy to implement.

　　Quality is the lifeline of an enterprise and the cornerstone of its survival and development. In the new year, the Production and Manufacturing Center will continue to focus on making relentless efforts to consistently enhance product quality, striving to elevate product standards to the next level. This will be achieved primarily through the following measures: upgrading process capabilities to shorten production cycles and strengthen product competitiveness; continuously enhancing the professional skills of industrial technical workers to ensure high-quality machining and installation; rationally planning the staffing levels of specialized technical personnel, consolidating the core teams in riveting and welding, machining, and electro-hydraulic fitting, and intensifying training for technical staff; strengthening the qualification assessment and ongoing process control of outsourced suppliers and subcontractors, with particular emphasis on controlling processing quality and delivery schedules; and improving production conditions by accelerating the construction of the cutting workshop and the painting workshop to boost production efficiency and product quality.

　　In addition to enhancing and controlling the production and manufacturing process, quality supervision is an indispensable and critical component of product quality assurance. To this end, the company must continue to thoroughly implement the enterprise-wide quality management philosophy and consistently establish and refine a comprehensive set of stringent control systems, including product quality inspection standards and procedures, inspection reporting protocols, nonconforming-product management procedures, quality accountability mechanisms, and regulations for the management of measurement and testing equipment as well as tooling and fixtures, thereby rigorously safeguarding product quality at every stage of the oversight process.

　　To expand markets externally and seize opportunities, and to enhance internal management and strengthen our core competencies, we must do so in order to improve the company’s overall operational performance. To comprehensively elevate the company’s management level, in 2013 the company decided to streamline its organizational structure and optimize human resource allocation; to fully implement the quality management system and work strictly in accordance with its requirements and standards; to continuously promote the performance appraisal and management system, linking employee benefits to performance appraisals to boost work efficiency; to intensify training by combining self-study with formal training and by sending employees out for learning while inviting experts in; thereby building a learning-oriented enterprise; and to foster a culture characterized by institutionalization and informatization, promoting positive energy and the mainstream theme, strengthening employee cohesion and pride, and further advancing the scientific, standardized, institutionalized, and rationalized nature of the company’s management.

　　To achieve sustainable corporate development, cost reduction and revenue generation are indispensable management strategies. Although market conditions have improved slightly this year, the outlook remains challenging; every member of the company must recognize the urgency and necessity of pursuing both revenue growth and cost containment. “Cost reduction and revenue generation” permeates every aspect of corporate management. The company has directed the Finance Center to take the lead, leveraging budgetary control as a foundation to establish a comprehensive product-cost-control management system. This system will cascade cost-control objectives down through design, process engineering, materials procurement, production, logistics, and after-sales service, thereby strengthening financial management. Materials procurement should employ a variety of methods—such as competitive bidding, price-based auctions, and bulk purchasing—to reduce acquisition costs for raw materials, component parts, sub-assemblies, and other supplies. At the same time, we must further reinforce a culture of efficiency, rigorously manage personnel and labor-cost budgets, curtail all non-operational expenditures, and deploy a range of effective measures to achieve both revenue growth and cost savings.

　　Chairman Zhang Zhihua summarized the situation, stating that a company without innovation lacks vitality and, consequently, market competitiveness. Therefore, at all times, staying abreast of market trends through continuous innovation is the fundamental means of ensuring the company’s sustained and stable development. Innovation encompasses not only technological innovation but also product innovation, service innovation, and management innovation—covering every aspect of production and operations. In 2013, the state continued to increase investment in infrastructure, and the high-speed rail market gradually rebounded, presenting excellent development opportunities for Xindafang. However, if we remain stagnant and rely on outdated sales philosophies, design standards, manufacturing processes, and management approaches to compete in the market, we will surely fail. The harsh reality demands that we upgrade every level of the company—enhancing our design capabilities, expanding our business scope, and undertaking transformation and upgrading.

　　At the meeting, Zhang Zhihua put forward relevant requirements for the company’s marketing, Innovation, enterprise management, cost control, revenue generation and expenditure reduction, performance appraisal, and other aspects, which can be summarized into the following principles:

　　Strive to consolidate existing markets and emphasize system-level solutions;

　　Continue to pursue Innovation and accelerate the development of new products;

　　Strengthen enterprise process management and enhance overall production capabilities;

　　Strengthen product cost control and optimize the human resources structure;

　　Continue to uphold the principles of increasing revenue and reducing expenditures, and ensure sound corporate financial planning.

　　Establish a company-wide performance appraisal system and steadily advance the implementation of our strategy.

　　Every new member of Dafang must understand and respect the company’s vision for transformation and upgrading, recognize the urgency of the task, demonstrate unwavering determination and perseverance, unite in sincere collaboration, and forge ahead with courage, thereby ensuring the smooth realization of the company’s transformation and upgrading and achieving a second leap forward.