The 6th 鈥淪unflower Award鈥 officially launches in 2022. This year鈥檚 Sunflower Award is hosted by the China Building Expo, the China Building Expo Sunflower Award Selection Committee, NetEase Home, and Jianbo Cloud Network, in collaboration with the Fifth Research Institute of the Ministry of Industry and Information Technology, Mingyuan Digital Construction Research Institute, and the KNX Ecological Alliance. Luban Home serves as the title sponsor, with Lu Shen Vision as a strategic partner, and Guomin Technology and Lihuo Microelectronics as special sponsors. Tmall acts as the strategic cooperation platform, and Tencent Cloud serves as a special cooperation platform to empower the 2022 6th Sunflower Award. The China Building Expo Sunflower Award is praised as the 鈥渕ost prestigious award鈥 in the smart home industry, gathering professional and authoritative forces to create the highest selection standards for the smart industry and promote the high-quality development of the smart home industry.
In April 2022, the 6th China Building Expo Sunflower Award Smart Home Research Team visited Guangdong to conduct in-depth visits to smart home enterprises. The team included representatives from the China Building Expo, the China Building Expo Sunflower Award Selection Committee, NetEase Home, and Jianbo Cloud Network, alongside media partners like Phoenix Online Guangdong, Smart Lock Research PRO, Lock World, Huizhan Media, Qianjia.com, and SuoMaoTong, to conduct comprehensive investigations on smart home enterprises. This initiative infused momentum into the selection of the 2022 6th 鈥淪unflower Award鈥 and showcased the strength and charm of intelligent manufacturing to the public.
On April 29, the China Building Expo Sunflower Award Smart Home Research Team arrived at Guangdong Manshen Intelligent Technology Co., Ltd. Chen Jun, the Secretary-General of the China Building Expo Sunflower Award Selection Committee, engaged in in-depth discussions with Zhang Baoqiang, the Chairman of Manshen Intelligent, regarding topics such as differentiated advantages, service guarantees, and supply chain systems. Zhang Baoqiang stated that after surpassing 1 million units in OEM/ODM production, Manshen plans to enhance core capabilities in automation production, quality control, and supply chain management in 2022, aiming to create a first-class 鈥渢rusted delivery platform for smart locks.鈥
( 鈫 Video Interview 鈫 )
鈻 Selected Dialogues 鈻
Q1
Chen Jun: Speaking of Manshen, it underwent a strategic transformation in 2017. Previously focused on self-research and product sales, it shifted to OEM and ODM production starting in 2017. I鈥檇 like to ask Zhang Baoqiang to discuss the significant achievements Manshen has made during these five years of strategic transformation and what new competitive advantages have been constructed.
Zhang Baoqiang: Manshen鈥檚 development has gone through three major stages. The first stage was during the time of Xianghuoju Security Technology Company, a wholly-owned subsidiary of the Xianghuoju Automobile Group, established in 2004 to focus on the security industry. After 2011, the company was privatized, marking the beginning of the Xi鈥檃n Huijing era. This was when we continued along the path of branding, smart homes, smart doors, and smart locks, achieving some success. The third stage began in early 2018, when we established Guangdong Manshen Intelligent Technology Company in Xiaolan, transitioning from brand operation to smart lock ODM and OEM.
The outcome of this strategic transformation has had both gains and losses. Overall, we have received support from some brand owners and customers, achieving certain accomplishments; however, this deviates somewhat from our original intention of establishing the 鈥淪mart Lock Sharing Industry Platform and Shared Manufacturing鈥 business model. We initially aimed to build a platform-oriented company to promote manufacturing transformation through 鈥渟mart manufacturing and shared manufacturing.鈥 Yet, constrained by the overall development phase of the industry and the rapid iteration of the supply chain and technologies, along with fluctuations in industry orders, the foundational elements of shared manufacturing have not been sufficient. I believe we have not yet met expectations in this regard. However, from the perspective of enterprise management, we have made some gains in building a smart lock supply chain service provider, particularly reflected in the company鈥檚 positioning. As a specialized smart lock production service provider, how does Manshen survive? The core lies in quality, delivery time, cost, and our innovative ability to support customers in achieving sustainable development.
Since the establishment of Guangdong Manshen, we have divided the past five years into three stages based on these key positioning elements. The first development stage, in 2018 and 2019, had our slogan as 鈥淥ne-stop Service Provider for Smart Locks.鈥 Facing cross-industry brands in the smart lock sector, we needed to provide 鈥渦niversally applicable and popular鈥 products, helping clients quickly enter the industry. Clients only needed to leverage their brand, channel, and financial advantages to compete with rival brands; the rest was managed by Manshen. Manshen can assist clients with product positioning, design development, production delivery, installation after-sales, and product iteration as a full-process service.
The second stage of development in late 2019 and early 2020 was a transformation into an 鈥渆nd-to-end solution provider for smart locks.鈥 In this stage, brand clients enhanced their competitive abilities, focusing on the personalization, differentiation, and customization of products. We needed to provide service capabilities from product planning to realization and delivery.
The third development stage reached in 2022 introduced a new slogan: 鈥淏uilding a Trusted Delivery Platform for Smart Locks.鈥 As the industry matures, clients no longer require simple personalization and differentiation but are looking for a boutique strategy. The industry is transitioning from generic product competition and functional competition to deeper competitive dimensions like performance and human-machine interaction. Thus, how to build a platform that clients can trust has become crucial, enabling them to compete worry-free up front.
These three changes in keywords represent what Manshen needs to output for clients given the various development stages of the smart lock industry and illustrate the focus areas for capability enhancement during these five years across the three stages.
Q2
Chen Jun: In fact, these three stages have constructed our new advantages. I believe shifting from the first two stages to the third, credible stage entails heightened client demands, with 鈥渃redibility鈥 encompassing brand credibility assurance.
Zhang Baoqiang: Just as social order is built on trust, the most fundamental link between customers and Manshen is also trust. Gaining customer trust comes not only from product quality but also requires a broader, all-dimensional effort.
Chinese-style competition is already quite severe. If we cannot find some points of differentiated competition, we will inevitably be drawn into the fray. There鈥檚 an old saying in China, 鈥淥ne who prepares properly succeeds; one who does not prepares fails.鈥 Companies must establish a clear strategy. Tactical execution can be adjusted slightly according to the current external environment, but once the strategic goals are set, they must be steadfastly implemented without blindly pushing forward.
Q3
Chen Jun: Currently, many of the customers we serve have both commonalities and differences. Could you give one or two examples to help us better understand Manshen鈥檚 sincere and credible services for its clients?
Zhang Baoqiang: Product homogenization has caused any brand owner to lose bargaining power and pricing authority, and creating product differentiation requires a rational framework.
First, Manshen intervenes at the product planning stage, participating deeply from product planning, definition, competitive analysis, technological process advantages to cost factors, ensuring that new products launched can achieve relatively good market returns rather than merely satisfying customer requirements. Simply handing over a PRD or product requirement document can lead to errors or deviations in the upfront definition, causing all of the customer鈥檚 investments to go to waste.
The second point is that Manshen serves numerous clients鈥攁round 110鈥攑rimarily across various industries. Clients worry that Manshen might disclose or reuse different clients鈥 innovations, which is why we prioritize confidentiality. The confidentiality principle is a moral bottom line that Manshen, based on the spirit of contracts, absolutely cannot breach! On the other hand, serving multiple clients gives us plenty of exposure, allowing us to deeply understand the core competitive points of various products while enabling different brand clients to establish differentiated competition. For a specialized smart lock production service provider like Manshen, this becomes a competitive advantage.
Q4
Chen Jun: At the end of 2021, the Sunflower Big Data Lock Market White Paper was released. It surveyed over 100 companies, finding that Manshen had surpassed a million units in OEM/ODM production, leading the industry. Could you discuss what surpassing 1 million units means for Manshen?
Zhang Baoqiang: Surpassing a million units will ensure that our partners believe the future is bright, thus making them more inclined to invest resources in us. This allows us to integrate the supply chain system to collaboratively serve our brand clients, thereby enhancing our competitiveness and continuously meeting customer expectations.
The first thing Manshen did after investing in Xiaolan in 2017 was establish an intelligent factory, which this year will be fully implemented in a phased manner. Last year, we had around 406 SKUs when we achieved a million units, with product layouts consisting of many varieties in small batches. Automation production lines are suited for single variety mass production, and due to the previously insufficient volume, clients often requested different requirements, making it challenging to establish standardized components. After surpassing one million units, weighted averages allow for certain models to reach a stable and observable volume, sufficient to support an automation-ready production line. Automating processes to replace manual labor and traditional operational models is an inevitable trend in manufacturing. Reaching one million units has created this positive possibility for us.
Currently, we have six flexible production lines. By June of this year, the inspection process will switch from manual to automated inspection. After thoroughly inventorying all products, we can add two automated assembly lines with automated inspection processes in the third quarter of this year. We are making long-term preparations now, aiming to break through to a production capacity of 2 million. We would rather have our capacity wait for orders than risk missing out on hard-won orders due to inadequate capacity, thus losing overall revenue.
Q5
Chen Jun: From the perspective of smart lock OEM and ODM, ensuring the quality of smart locks for clients is a top priority. How has Manshen established its guarantee system?
Zhang Baoqiang: The standards we follow in our industry are primarily national standards. Most companies鈥 electronic anti-theft locks adhere to the 374 standard, but in terms of standardized management, national standards are generally foundational requirements. From Manshen鈥檚 inception, we focused on setting up and investing in a testing center to comply with all comprehensive tests based on national and industry standards, striving for CNAS certification this year. Throughout the system-building process, we have also established our own enterprise standards, with crucial indicators like safety, reliability, and durability well above national standards. Our enterprise standards have also been recorded by market regulatory authorities. In the entire manufacturing process, our R&D, production transition, manufacturing, and internal controls are all conducted according to our enterprise standards.
Another point of distinction is in the creation of testing cases. In product quality management, the research phase begins with the formation of a product project initiation document that simultaneously creates a product requirement document. Manshen has a practice of compiling testing cases and test outlines alongside the requirement document. Once the product is developed, testing cases verify the final outcomes. These cases include the test items, testing methods, standards, and tools to confirm that all R&D processes are outputtable and controllable. I believe this is the core of our quality assurance. Many national standard testing devices are generic; however, certain products may contain unique structures or innovations that lack specific testing equipment. Thus, we must create dedicated equipment. I hold the view that at Manshen, we will build a culture: quality inspection is backed solely by data, irrespective of who says otherwise.
Q6
Chen Jun: You鈥檝e just mentioned that our testing center aims to achieve CNAS certification. What enhancements will this bring?
Zhang Baoqiang: CNAS certification will impose stricter requirements on the overall management system of inspections, including the standardization of inspection items and hardware configurations of the laboratory. It will require third-party verification of our testing capabilities, standards execution, and reliability of testing methods. If the China Securities Regulatory Commission recognizes and approves our system and execution during on-site audits, it will provide objective external certification. This will also be an opportunity for us to continue to improve internally.
Q7
Chen Jun: The smart lock supply chain may seem mature, yet a quality-assured supply chain remains scarce. How does Manshen build a quality-assured supply chain system?
Zhang Baoqiang: The speed of industry maturity determines the speed of supply chain maturity. For example, the massive applications of mobile phones have propelled rapid establishment and maturity of the supply chain. The smart lock industry is still emerging, meaning the supply chain system still has sufficient capacity to support the industry鈥檚 rapid growth, which is both objective and realistically understandable.
In specific measures, first, it is crucial to choose partners who can match, adapt, innovate, and share similar values.
Next, performance evaluation is important. While business in China is often influenced by personal relationships, I always adhere to a principle: use simple forces effectively! By 鈥渟imple,鈥 I mean adhering to clear rules, which involve business contracts, quality standards, and delivery requirements. By putting these on paper and following the rules strictly, we can naturally reduce conflicts between individuals and companies; at the same time, applying this standard for evaluation will cultivate a harmonious and tacit relationship.
Lastly, support is vital. As a burgeoning industry, many supply chains separate into mechanical and electrical segments, with most being seasoned in larger, more mature industries. This has generally ensured adherence to basic quality standards and the spirit of contracts, so there鈥檚 little need for concern. Conversely, the key point lies with the 鈥渕echanical鈥 elements, covering areas like die casting, polishing, plating, sheet metal, silicone, etc. While automotive, mobile phones, and other hardware manufacturing enterprises can deliver qualified products at scale, the current scale and cost requirements for smart locks make them less viable partners. Instead, we need to uplift and collaborate with traditional hardware manufacturers, facing the future together. With this mindset, there鈥檚 a good chance many partners will be willing to walk this path with us; currently, we still need to remain accommodating regarding the 鈥渕echanical鈥 components.
Q8
Chen Jun: The repeated outbreaks of COVID-19 have posed operational challenges for companies. What measures has Manshen taken to respond?
Zhang Baoqiang: Each individual feels the weight of a grain of sand falling in this era. The pandemic鈥檚 impact on the entire social and economic system far exceeds all previously pessimistic predictions. We kept hoping the next year would be better, only to find ourselves in another winter. In this cold winter, collective support becomes more crucial, especially for strategic clients.
In the smart lock industry, there are generally a few channels; however, the pandemic has led to stagnation in many cities, disrupting logistics systems, closing offline stores, affecting online sales, leading to installation challenges for online orders, and so on. The myriad problems experienced during March to April starkly demonstrated their impact on enterprises. At that time, our capacity to assist was limited. Yet if clients need us, we will definitely do our utmost.
For instance, during the lockdown in Shenzhen in March, our client there faced their warehouse closure, employees staying at home, and logistics unable to operate. What could be done? To help resolve the client鈥檚 dilemma, we quickly reached an agreement for virtual warehousing. Goods produced at the production line could be transferred directly to Manshen鈥檚 finished goods warehouse, treated as their own warehouse. Within one hour, we opened a sub-account with SF Express for the client, allowing Manshen to handle all shipping responsibilities. We merely hoped to provide a bit of warmth and assistance in these difficult circumstances.
