Lingong Leads the Way in Changing Perceptions of Chinese Equipment

May 13, 2014

Shandong Lingong Machinery Co., Ltd. is a Chinese manufacturer with a difference. The company’s customer-oriented production philosophy delivers the highest quality construction equipment at a lower cost in a shorter time. The company does this by using advanced technology and lean manufacturing processes. Newer, better, smarter ““ in short, that’s what makes Lingong different.

For years, construction equipment from Chinese manufacturers was perceived as cheaper in cost but inferior in quality and technology when compared to foreign brands. But now that perception has changed. A study of Chinese construction equipment manufacturers, conducted by broker CLSA, turned this theory on its head by putting Chinese-made diggers through grueling tests to measure their productivity, durability and fuel efficiency. Test results showed that technology gaps between the best Chinese manufacturers and their foreign rivals are now “almost non-existent”. So significant is this narrowing of the gap between Chinese and established Western brands that the results of the CLSA study formed the basis for an article that appeared in a December 2013 edition of The Economist.

The lower cost and higher quality of Chinese construction equipment is helping manufacturers develop their international operations and one company enjoying increasing success in markets outside China is Shandong Lingong Machinery Co., Ltd. (known as Lingong). The company’s equipment is branded SDLG and Lingong is focused on providing durable and reliable equipment at a lower cost. A major factor in helping the company achieve this is its manufacturing and design process, the Lingong Production System (LPS). This process eliminates waste, improves efficiency and, most importantly, maximizes quality. Five years after the philosophy was first implemented into production facilities worldwide, Lingong can demonstrate tangible results in the form of shorter lead times, lower prices and upgraded quality. LPS philosophies have been applied to the production of its full range of SDLG-branded wheel loaders, excavators, road machinery and other construction equipment.

But it’s not only a change in process that’s allowing Lingong to further improve its products. There have also been significant investments. For example, in August 2013 it opened a US$10 million assembly hall in Pederneiras, Brazil. At present there are four SDLG crawler excavator models produced in Brazil, ranging from 13.8 t to 24.3 t. Other investments include a new cabin production facility, paint shop and frame fabrication factory in the company’s manufacturing headquarters in Linyi, Shandong Province, China.

A continuous journey to success

The Lingong Production System incorporates many of today’s most advanced manufacturing processes with Kaizen as its central point of focus. The Kaizen philosophy clearly defines both human and mechanical processes to deliver the highest quality end product in the most efficient and cost-effective manner. Lingong’s factories in Linyi and Pederneiras have been rigorously benchmarked against the best factories in the world.

Wen Degang, head of operations at Lingong’s flagship factory in Linyi, China, explains that manufacturing process improvement is an ongoing journey that requires commitment from every employee ““ from the factory floor to senior management.

“There’s been a huge change in the way our employees think since the implementation of LPS ““ they are much more focused on working efficiently and they understand the value of what they’re doing. This has motivated everyone to do even better for our customers,” he says.

Agile and responsive

LPS also incorporates Just In Time manufacturing concepts that allow production facilities to quickly and cost-effectively respond to natural peaks and troughs in demand by keeping stock inventory to a minimum.

“As the export sales of SDLG products continues to grow, managing volumes, optimizing lead times and ensuring quality becomes ever more important,” Degang explains. “With Just In Time processes, components are not only delivered when we need them, but where we need them. Direct to the point of use on the factory floor. This simplifies workers’ tasks at each stage of production and reduces the capacity for error.”

In preparation for achieving its goal of becoming the largest Chinese construction equipment manufacturer globally, Lingong has invested a great deal of time and money into its production facilities and people. The company’s senior management team is made up of highly qualified professionals ““ all educated to the highest levels and with experience from some of the world’s top companies, including Price Waterhouse Cooper and global electronics suppliers.

“Our young and ambitious team understands the importance of being different in this market. Our new factories, advanced production system and knowledgeable people are what makes SDLG different,” says Degang.