In the face of growing competition from multinational corporations entering the Chinese market, local hardware companies are encountering significant challenges. To maintain their competitive edge, these enterprises must seize strategic development opportunities and set clear, long-term goals. The question arises: is the company focused on profit maximization, customer value creation, or employee welfare? While all these are important, the ultimate goal should be to create lasting value for stakeholders.
The precision of hardware molds has been steadily increasing over the years. Ten years ago, the standard was 5 micrometers, but now it has advanced to 2–3 micrometers. Soon, 1-micrometer precision molds will hit the market, requiring advanced superfinishing techniques. As demand for high-efficiency production rises, the metal processing mold industry is expected to grow significantly. This growth is driven by the need for multi-cavity molds that can produce more parts in a single cycle, as well as the development of multifunctional composite molds capable of performing tasks like punching, forming, laminating, tapping, and riveting. Consequently, the demand for high-performance steel materials is also rising.
To thrive amidst these changes, China’s metal processing and mold companies must focus on modernizing their operations. According to Luo Baihui, understanding the circulation system is key to grasping the socialist market economy. Modern circulation plays a crucial role in improving economic efficiency, quality, and speed. Therefore, to sustain the growth of the hardware manufacturing sector, companies must enhance several key areas.
First, they should develop a robust service industry within the metal processing mold sector, expand large-scale businesses, and establish an open and efficient distribution network. This would help replace the current fragmented and weak hardware distribution system. Second, they should strengthen every stage of the industry’s development, building large clusters of hardware manufacturers that interlock and complement each other, thereby boosting overall competitiveness. Third, technological innovation and brand development must accelerate, integrating domestic and foreign trade, and promoting structural economic adjustments and growth model transformations. Expanding markets and consumer demand through e-commerce platforms, modern logistics systems, and credit mechanisms will further drive industry modernization.
Additionally, fostering industry collaboration and resource sharing is essential. Hardware companies must recognize the importance of collective effort, pool resources, and promote communication both internally and externally to drive industry-wide prosperity. They must also proactively address international trade barriers and prepare for global market challenges.
Company leaders should prioritize key tasks after identifying the company's direction, avoiding distractions from less impactful activities. Any initiative that fails to motivate employees or contribute to long-term profitability should be reconsidered.
In the U.S. market, medium-sized twist drills cost around $10 each, while low-end Chinese-made drills are sold for just $1, often used as hand tools. Despite having the world's largest automotive industry, China still imports 80–90% of its high-efficiency cutting tools, even from foreign-funded companies operating in China.
Most high-efficiency cutting tools used in China's machining industry are imported, with many produced by foreign-owned enterprises. Although China exports a lot of knives, they are mostly low-cost, standardized tools. In 2004, China produced about 2.5 billion tools, with 2 billion being exported as low-priced, basic products. Over the years, exports have remained largely in the mid-to-low range. Today, most tool factories still focus on traditional, standard tools.
Looking ahead, as the proportion of high-efficiency CNC machines increases in Chinese factories, the demand for advanced cutting tools will surge, while the need for traditional tools will decline. Currently, China relies heavily on imported high-end tools, while exporting low-quality ones in large quantities. This imbalance must be addressed urgently.
China's machinery industry uses a lot of standard tools, whereas developed countries use high-efficiency cutting tools, resulting in significantly lower processing efficiency compared to foreign counterparts. Changing this situation is critical for the future competitiveness of China's manufacturing sector.
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Dongguan Jiufukai Hardware Products Co., Ltd , https://www.jfkspring.com