Nothing, I suspect, could have prepared me for my first visit to Shanghai. A one time fishing village on the mud flats of the mighty Yangtze River, mainland China’s largest port is emerging from its turbulent past to become the world’s first city of the new millennium – capital of the 21st century and a hotbed of opportunity.
Shanghai is an overwhelming assault on the senses. With a population of more than 13 million, the streets of the old and new city flow with people, like torrents of humanity. The ever-changing skyline is a vertical canvas painted in the gaudy colours of neon signs, and enormous advertising hoardings drape the sides of streets and buildings. Investment is everywhere, and wherever space exists, the shell of another scaffolding-clad skyscraper starts its climb away from the commotion below.
In the 1930s, the first time foreign money and business descended upon Shanghai, the city’s success was such that it had the tallest buildings in Asia, and more motorcars than in the rest of China put together. Today, history is repeating itself, but on a far grander scale. Thanks to government reforms, foreign money is pouring into the city and its surrounds. Drive for an hour toward the outskirts and the only view through the frenzied traffic of thousands of bicycles, handcarts and cabs is construction sites: opulent condominiums for the new rich, offices for more foreign businesses and industrial sites for state-of-the-art factories.
In the other direction, cross the river to the city’s Pudong financial district and you leave the noise and dust of jackhammers and pile drivers behind. From the suites of shiny office towers almost 100 stories above the city, suited businessmen cut deals with their counterparts in New York, Hong Kong and London, as diesel-powered fishing junks navigate the choppy river waters hundreds of feet below. When the deals are done, shopping malls the size of cathedrals wait impatiently for the fledgling consumers to descend upon them.
Shanghai Mitsubishi Elevator
Dominating the Pudong district skyline is the silver skinned Jin Mao Tower, China’s tallest building. In a style reminiscent of a Chinese pagoda, the 88-story, 1,381-foot tower is more than just an office and hotel complex, it’s a breathtaking indication of the city’s aspirations, and a monument to China’s cultural past.
More prosaically, but no less significantly, it’s also a testament to the activities and expertise of Shanghai Mitsubishi Elevator. A joint venture between a state-owned enterprise and Japan’s Mitsubishi Electric Corporation, the company manufacturs and supplies elevators, escalators and moving walkways for the country’s many civil engineering projects. The elevator system installed in the Jin Mao Tower was supplied by Mitsubishi and installed and maintained by Shanghai Mitsubishi. It’s is a highly visible advertisement for the company and its technology.
Joint ventures are one of the more popular means by which foreign companies are securing a foothold in China’s future. In return for capital and technical know-how, China provides access to a large and increasingly skilled workforce, as well as one of the world’s fastest growing economies. Typically, subscribers to such agreements are contracted for a specified period of time and are bound to use local labour, materials and resources. The Chinese call it “localising” a product, and the aim is to avoid direct imports, keep a workforce of 700 million people busy and generate wealth for the Chinese nation as a whole.
Formed on Jan 1st 1987, the US$200 million Mitsubishi joint venture was originally scheduled to last for 20 years, but with more than 16 years of successful trading already behind it, all parties are keen to continue the arrangement when the contract terminates at the end of 2006.
Just 36 hours after I arrived in Shanghai – and before my body clock has had the chance to realise that something’s not quite right – I find myself in a first floor meeting room at the Shanghai Mitsubishi Elevator plant, a heart-stopping 40-minute taxi ride from the city. Seated before me is a contingent of Mitsubishi representatives, one of whom is an interpreter, another is the company’s Chief Engineer, Zhu Si Zhong. Serious, considered, precise, Zhu offers a simple, statistical justification for extending the contract with Mitsubishi.
“When we first started to work with Mitsubishi Elevator we were producing upwards of 750 systems a year,” he says. “Last year,” he pauses for effect, “we sold 11,010!”
That makes Shanghai Mitsubishi Elevator the largest elevator manufacturer in China. In fact, the company claims that in 2002, its annual output exceeded the production of all its local competitors.
“They’re gaining on us,” says Zhu, with a barely detectable smile, “but we’ve been giving the matter a lot of attention, and we still feel that we have a very bright future.”
Construction, Construction Everywhere
Indeed, as any visitor to Shanghai or China can see, there’s no shortage of multi-storied construction projects going on.
To take advantage of as many opportunities as possible, Shanghai Mitsubishi Elevator develops and provides a wide range of elevator and escalator systems to property developers and construction companies. These include passenger elevators, freight elevators, hospital elevators, escalators for shopping malls and transport systems, and moving walkways of the type found in airports around the world.
Given the company’s wide product range, I asked Zhu what the biggest technical and organisational challenges were, if Shanghai Mitsubishi Elevator hoped to continue winning the lion’s share of this business and maintain its formidable lead over the other elevator systems manufacturers.
“At the beginning of our joint venture we introduced technology directly from our partner in Japan,” he says. “Since then we’ve established and grown our own research and development department. Now, with so many years of experience behind us, and all the facilities we need here on-site, we can fully develop our own products.”
For visitors to the company’s factory, one of its most expensive investments is visible well before you drive into the main car park. Beside the main facility sits an elevator-testing tower – at 120 meters, it’s the highest elevator-testing tower in China. In the elevator development and manufacturing industry, having a testing tower on-site is similar to an automotive company having its own wind tunnel.
“The tower allows us to test our new systems quickly and effectively,” says Zhu. “Most importantly, we can develop the control and power systems by building them here on-site. These are the areas where there is most to gain.” The company is currently developing a permanent magnet gearless control system giving improved efficiency with less noise and lower power use.
Shanghai Mitsubishi Elevator’s control over its research & development is a key factor in its ability to deliver new and sophisticated elevator systems, and so is the control it has in its manufacturing operations.
Every stage in the company’s value chain, from warehousing and storage through to PCB production, quality control, service and backup, employs the latest technology. Overall coordination is provided by a company-wide enterprise resource planning (ERP) system, allowing all elements to work together seamlessly. In such a tightly controlled manufacturing environment, the efficiency of the company’s metalcutting shop is just as important as any other link in the chain.
When, in 1997, Shanghai Mitsubishi Elevator went looking for a number of horizontal and vertical CNC machining centres, one of its top priorities was the machine CNC, and whether it would lend itself to integration with the machine shop scheduling system.
“We were first introduced to Haas machines at the Shanghai machine tool exhibition by the local distributor, Freeson Company Ltd.,” says Zhu. “The machines seemed to fit our requirements, but what made them particularly suitable was the flexibility of the CNC, and its compatibility with our shop-floor control and scheduling system. This fact alone makes the control very competitive.”
But Zhu also points out that the decision to purchase the Haas machines was made on the basis of a range of criteria, not just the suitability of the Haas CNC.
“We also chose the Haas machines for their accuracy and their overall speed and efficiency,” he says. “Of course, price was a significant factor. Haas machines are very reasonable compared to other machines of similar specification.”
Later the same year the company invested in its first Haas CNC machine tools: a VF-3 vertical machining centre and four HS-1RP horizontal machining centres with built-in rotary tables and pallet changers. Since then, seven more Haas machines have joined the line-up: more HS-1RPs and small to mid-sized VF vertical machining centres, the largest of which is a VF-6.
Although the machines are running two shifts a day, five days a week, it’s difficult not to be impressed with their cleanliness and the general sense of order in the company’s machine shop.
“We use the Haas machines to process relatively small parts, like the safety gears and the brake arms,” says Zhu, “mostly in steel and cast iron, and normally short machining times with fairly high-volume output.”
The company’s machining processes are optimised to maintain low material stocks and fast turnaround of parts – no mean feat when every elevator, escalator and moving walkway system built is different from the last.
“Although finished systems are different, many individual parts and components are similar,” says Zhu. “The key thing for us is lead-time. We build to order for a specific project – discreet manufacturing. The company must be able to meet customer requirements, so speed of manufacture is very important.”
To help move things along as quickly as possible, the company’s programming department may or may not use its CAD/CAM systems, depending upon the part to be machined.
“Because we make so many similar, small parts, it’s not always cost efficient to use CAM to program,” says Zhu. “We’ve found that there is often a lot of post-processing to be done, which makes CAM too inefficient.”
Instead, the programmer will simply use a previously programmed, similar part and make manual modifications to the program before sending it directly to the Haas machine via the company’s extensive communications network.
Interestingly, Zhu was amused at my comments that, in the West, many companies have trouble finding good CNC programmers. He claimed that for Chinese engineers, programming is a prerequisite skill, and that like most things in China, there’s no shortage of qualified engineers. The company’s engineers, he says, don’t have any problems with the Haas control, even though all the programming is done in English. It made me wonder how English speaking engineers would fare if confronted with a CNC control in Chinese!
Summarising the company’s general satisfaction with the Haas line-up, Zhu closes the meeting by announcing to all that this year Shanghai Mitsubishi Elevator plans to purchase another 8 Haas machining centres, so that more parts can be shifted from less efficient machines. Lou Wei, sales representative for Freeson Company Ltd. (the local Haas distributor) and my guide whilst in China, accepts the news quietly, but with obvious delight. As recently as ten years ago, I don’t think he or anyone else in China could have imagined a country so full of opportunity and optimism.