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【SEM 60th Anniversary Series】SEM 60th Anniversary Series How an “Iron Man” is Produced
Release time:2018-07-05

Everyone visiting Caterpillar (Qingzhou) Ltd. (CQL) will be attracted to the sight of lines of iron equipment.  The equipment is in unique SEM yellow, looking like soldiers waiting for orders.  When you take a closer look at the facility, you will realize that a sophisticated production-operation system was instrumental in producing such durable equipment.


Durable Iron. Equipment Neatly Lined Up

Talent is the Key to Enterprise Development

Anchang Ge from Shandong Province had been promised a job offer from a Qingdao company during his university studies.  But Anchang became interested in SEM during its 2002 university recruitment campaign. “The first time we visited the SEM facility, we were deeply impressed by the tidy work environment, efficient machines and the hard-working, friendly, polite workers,” Ge remembered.  He declined the job offer from the Qingdao company and came to SEM.


Anchange Ge, SEM Fabrication Workshop Manager

Every newcomer needs to work with seasoned staff to accumulate knowledge, experience and interpersonal communication skills – all the building blocks of training at SEM.  “I benefited a lot from the training and I’m full of appreciation to my coach,” said Ge. “The traditional training way improves the staff’s practice skills and experience and the relationship between staff members. But it cannot improve the overall working efficiency and production standards. We combined traditional training with the Caterpillar training system to improve work efficiency and production standards.

Workers at Production Process Front Line

The benefits of traditional training combined with the Caterpillar training system include having more and more people attracted to SEM. Sales fluctuated because of the macro-economic environment, leading to staff earnings reductions, but most employees elected to stay at SEM to improve their skills, gain experience and devise ways to reduce production costs.


Many frontline SEM staff members are adept in Lean production. One employee found right-hand gloves would always be worn out earlier than the left-hand gloves and suggested buying more right-hand gloves to lower costs.  “Many contributions of the staff in saving production costs are noticed by SEM. They get promotions accordingly,” Ge said.

SEM always believes talent is the key point of the production operation system. A hardworking, loyal and thoughtful staff is the firm foundation on which to develop Lean production for SEM, improving industrial competitiveness.


Who is Your Client?

Yougang Li has worked for SEM since 1992. He worked as a process engineer for seven years, production manager for seven years and a technical center manager for seven years. In 2011, he was assigned to Caterpillar U.S. headquarters. It was an experience that rebuilt his working style and thinking patterns.


 Yougang Li, SEM Quality Manager

Li found his colleagues in the U.S. were not as busy as his staff in China, yet everything was within their control. After working several days with them, Li discovered U.S. staff always spend a lot of time on proactive work plans, preventing problems before they happened. “We must make detailed plans (in China) before work begins instead of just working with our heads down during the process,” Li said.  In fact, in 2004, Li advocated for 6 Sigma management in SEM, bringing in the CQMS system and BIQ management, improving SEM in quality management. After a period back in China, Li was assigned the Quality Manager position in 2015, formally promoting BIQ management in SEM. “With the support of the Caterpillar quality management system, BIQ is carried out efficiently, preventing problems from the beginning. Quality management efficiency is greatly improved after a year of these new systems joining SEM.”

Li has been responsible for quality management for more than three years. He is very glad to answer a question in every new staff training session about how to serve clients well. “We need to manage the quality of every piece of the production process well, making contributions to providing clients with a satisfying product.”

The Supply Chain After 20 Years


Yongchun Zhao, Supply Chain Manager

Yongchun Zhao joined SEM in 1993. After five years of experience in processing and sales, he elected to become a supply chain manager.  At the end of the 1990s, the ERP system was introduced into the industry. SEM developed its own ERP system and asked Yongchun Zhao and engineers from other departments to meet its needs.

With the experience of the ERP system R&D and 13 years of work in ERP and logistics management, Zhao became a supply chain manager. “The ERP system is the key part of the supply chain. The supply chain is one of the department’s most complex to manage and it needs to find and solve detailed problems from production to sales, including taking orders, starting production, distributing materials and delivering equipment. The entire supply chain management needs to cooperate with all departments, and it cannot work without information systems like ERP,” said Zhao.


Material Warehouse


The supply chain must be continuously changed and adjusted according to market conditions.  In market downturns, it will require material planning, timely inventory monitoring, tracking of orders and communication with suppliers to avoid loss to inventory surplus.  In market growth, it requires a priority list for all orders after communication with dealers and helping suppliers establish the safe stock to ensure production capacity and the positive cooperation of suppliers. The objective is to provide more products to meet the needs of customers.  It is one of the operational strategies and goals of Zhao’s team to stick to optimizing the “end to end” management of the supply chain from customer to supplier and from design and R&D to delivery to make it more sensitive, reliable, efficient and low-cost.


Staff in Discussion

Anchang Ge, Yougang Li and Yongchun Zhao embody the SEM spirit. They are also practitioners of the development and integration of operation and management, as well as the strategists who have helped guide the company to winning a bigger share of the international market. They represent the kind of people that help SEM stand out in the increasingly fierce worldwide market and realize profitable growth with scientific and efficient management.


Scientific Material Distribution


Efficient Production Line


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