Part Ⅰ Case
The outbreak of the COVID-19 had a huge impact on the global economy.The company's employees could not return to work in time,factory production stopped and other events were emerging in endlessly,which not only made normal living goods scarce,but also made the world extremely scarce in medical supplies.Masks and protective clothing had become “luxury goods”,and their prices had even been inflated to an astonishing level.The AVIC was tasked with launching the production of mask machines and strip pressing machines to alleviate the shortage of medical supplies,and completed the production of the first mask machine in just 16 days and the development of strip pressing machines in 7 days.During the epidemic,the AVIC not only helped the country complete the task of developing mask machines and strip pressing machines,but also donated funds and medical supplies to severely affected areas as soon as possible.
The AVIC had gone through five stages since its establishment,and ultimately formed a corporate culture of “one mind,two integrations,three forces,and five modernizations”,which has been integrated into the enterprise.After years of development and organizational change,the transition from aircraft manufacturing to mask and strip forming machines reflected the strong organizational agility of the AVIC.The AVIC has always adhered to the leadership of the Party and the new development concept,actively responded to the call of the country,and guided the entire group to follow the new development concept of innovation,coordination,green,openness,and sharing in daily production and operation activities.At the 14th China International Aviation and Aerospace Exhibition,the AVIC demonstrated its strong R&D and manufacturing capabilities,reflecting Chinese strength and Chinese spirit.
1.Chinese aviators were entrusted with a mission at a critical and difficult juncture — As long as the country needs,we must go”
At the beginning of 2020,the sudden outbreak of the COVID-19 caught all sectors of the country off guard,and the production of medical manufacturing industry fell far short of the dramatic increase in market demand,leaving medical materials in desperate shortage.Masks became one of the essential demands in the fight against the COVID-19.The cry of “one mask is hard to find” became widespread in China and around the world,and the price of mask even quadrupled within a week in China.Even if five masks on e-commerce platforms such as Amazon were sold for 149 dollars （equivalent to 209 yuan per piece）,they ran out of stock very quickly.In mid of January 2020,according to Japanese media reports,the price of mask soared to CNY 577 per unit,and 1.8 billion masks were sold out in just half a month.In the Republic of Korea,the price of mask rose 6 to 8 times higher,and the government even introduced a ruling that excessive hoarding of masks would result in jail punishment.
Faced with this “extraordinary” challenge,who would be the “bellwether” to solve the mask shortage?
In February 2020,the Chinese aviators were entrusted with a mission at this critical and difficult moment in time and so they shouted out the slogan,“As long as the country needs,we must go”.AVIC urgently launched a formidable political task-developing and producing fully-automatic face mask machines and strip press machines.
2.Crossing the boundary to make face mask machines:can AVIC achieve it
With the conviction that “If we can manufacture airplanes,why not face mask machines too”,AVIC started the task believing that “the beginning is the decisive race and the initiation is the sprint”.
The AVIC administration leaders attached great importance to the task and visited the AVIC Manufacturing Technology Institute numerous times to supervise the product development and consult with researchers on the spot to ensure the implementation and advancement of the task.The headquarters of AVIC invested a special fund of 5 million yuan to fully support the development and production of face mask machine and strip press machine.When the task began,AVIC quickly set up a R&D team to make the face mask machines and strip press machines.They worked together as a team and gave full attention to collaboration benefits and the technical manufacturing strengths of AVIC,insisting that the standard,quality and efficiency must be top-notch.
AVIC Manufacturing Technology Institute was responsible for the research and production project of the face mask machine and unit and so it listed the production of face mask machines as the “No.1 project”.The director of AVIC Manufacturing Technology Institute admitted that in the past 30 years since he was engaged in aircraft R&D and manufacturing,he had never been involved in the research of face mask machines and the materials used to produce masks like melt-blown fabric and non-woven fabric.Even so,with the understanding that “since face masks are the most important material at this time,we should therefore take up the task”,AVIC Manufacturing Technology Institute took up the great responsibility of making face mask machines.
The employees of AVIC responded positively to the call and immediately formed a R&D team within half an hour to make face mask machines； they completed the task assessment,machine component design and supply chain investigation in four hours,and amazingly,finalized the 3D digital model of the whole machine and the design of the production and construction drawings in three days.They also used digital design and manufacturing technology in the face mask machine production； indeed,all these displayed AVIC's strong technical strengths.
AVIC showed a strong capability in emergency mobilization.The task of making face mask machines united 656 researchers from 8 work units,and there was great coordination among 23 external entities.Adopting a parallel design and craft and a collaborative process of manufacturing,assembly and debugging,AVIC made the first face mask machine in just 16 days with a production capacity of 100 face masks per minute and 140 000 face masks per day.
A face mask machine is known precisely to most people for its function.However,not many people may know the function of a strip press machine.Yet,strip press machines also play a vital role in the fight against the COVID-19.A strip press machine is an important equipment used to produce protective clothing.Its function lies in putting a seal on protective clothing,thus ensuring that the protective clothing is airtight and waterproof to ensure that viruses and bacteria are blocked from invading the human body.
In the research and production ofthe strip press machine,Guizhou Guihang Automotive Components Co.,Ltd.which is affiliated to AVIC,undertook the responsibility and formed a research and development team with 124 employees from 6 units of the holding group.The team,with ample experience in developing and producing airborne aviation products and auto parts undertook the process of design,drawing,product development,product identification,production and delivery.It took the team only 7 days to complete the development of the first strip press machine,15 days to produce 50 strip press machines and deliver 31 strip press machines to all over the country for protective clothing production.
Sun Nianjun,chief engineer ofthe automatic mask machine project,said:“Medical staff and people urgently need face masks for protection,and the nation's resumption of work,production and school also requires a greater production capacity of masks； thus,we uphold an attitude of using our professional ability to ensure a stable and efficient operation of face mask machines through the safe and stable operation of the aviation equipment.”
The R&D personnels involved in these face mask machines and strip press machine projects are aviators working in the aerospace industry.By heeding the call from the SASAC,they took the initiative of carrying out the project of developing and producing the medical equipment.It was their first time undertaking this cross-boundary business project.After the project was accomplished,they then returned to the aerospace manufacturing industry.
3.AVIC units “unleashed their talents” to help the public fight against the COVID-19
After face mask machines and strip press machines were successfully presented in the market,the shortage of masks and protective clothing was alleviated and the national capacity of public medical materials provision improved.
Meanwhile,AVIC donated 50 million yuan to Hubei Province and for the first time,10 affiliated medical institutions and several subordinate units within its general medical sector assisted Hubei.For example,AVIC Baosheng Group Co.,Ltd.held an emergency meeting when it received the call from Wuhan Vulcan Mountain Hospital to help in the construction of Vulcan Mountain Hospital.AVIC Tianjin Aviation Electromechanical Co.,Ltd.organized a technical team to assist in the production of thermometers within a few hours.AVIC Wuhan Aviation Instrument Co.,Ltd.responded immediately and immediately invested equipment to support the hospitals fighting the epidemic.As for AVIC Xiamen Tianma Microelectronics Co.,Ltd.,it not only engaged itself scientifically,it also donated medical supplies and took initiatives to assume social responsibility.
4.What kind of company is AVIC
The Aviation Industry Corporation of China Limited is a centrally managed,state-owned mega-enterprise as well as a state-authorized investment institution.In 2008,the China Aviation Industry Corporation I and the China Aviation Industry Corporation II combined to form The Aviation Industry Corporation of China,Ltd.
The abbreviation of The Aviation Industry Corporation of China,Ltd.is “AVIC”,which echoes their business philosophy of “Value in Creation” for customers.AVIC has developed a profound corporate culture:adheres to the goal of “serving the country in aviation,strengthening the military and enriching the people”,pursuing the philosophy of “dedication and integrity,innovation and transcendence”,following the principles of “market-oriented reform,professional integration,capitalized operation,international exploration and industrialized development”.AVIC insists on promoting the development of China's aviation industry,actively shouldering social responsibility and helping in the national defense construction and national economic development.
At present,AVIC has more than 100 member companies and 26 listed companies with more than 450 000 employees.There are 22 directly managed and directly affiliated units of AVIC,220 overseas organizations in more than 70 countries and regions around the world,marketing networks in more than 40 countries and regions,overseas assets of more than 170 billion CNY,and more than 36 000 employees overseas.AVIC is involved in the fields of military aviation and defense,civil aviation,industrial manufacturing and modern service industry,with industries such as aviation weaponry,military transport category aircraft,helicopters,airborne systems,general aviation,aviation research,flight testing,aviation supply chain and military trade,special equipment,auto parts,asset management,finance and engineering construction.According to the production and operation activities within the group,AVIC has 13 functional departments and 3 ad hoc organizations （the organizational structure of the company is shown in Appendix）.
AVIC has clear regulations on the behavior of senior management and employees and the basic requirements are marked in the Compliance Manual （the company's specification manual）.For senior management,compliance starts from senior management leadership,that is upholding the concept of comprehensive compliance,assuming leadership responsibility for organization management,ensuring that all decisions are made in accordance with the law,actively practicing and promoting the culture of compliance,and finally,promoting compliance from top to bottom and bottom up.As for employees,compliance requirements are stated as compliance for all,that is,all employees should be familiar with and comply with the compliance obligations of their positions,receive compliance training,take the initiative to identify,report and prevent compliance risks,refuse to perform irregularities,take the initiative to report irregularities and assume responsibility for their own compliance.
As a large,state-owned enterprise,the organization structure of AVIC is complex and relatively solid compared with that of small enterprises,which cannot react to the changes of the external environment quick enough.However,the cross-boundary business project of making face mask machines in such a short period of time is related to the organizational changes that AVIC had made since its establishment.
5.Past events of the restructuring of “the flower of modern industry”
AVIC is known as “the flower of modern industry”.Since the establishment of AVIC,it underwent a process from small to large and weak to strong.From “imitating others” to becoming independent innovatively,the R&D product technology has become increasingly mature and gradually gained comprehensive strength thus driving the development of the national economy.A wide range of business fields has been formed and a high-tech industrial system with advanced aerospace manufacturing technology has been established.
The following is the development history of AVIC:
AVIC had a rocky beginning in the 1950s.In 1951,promulgation of the Decision on the Construction of Aviation Industry issued marked the formal establishment of China's aviation industry.At that time,the People's Republic of China had just been established,and it adopted the diplomatic policy of “leaning to one side”.China at that time lacked capital,technology and industrial facility support,and its talent reserve and creativity were weak,so it could only imitate the Soviet model.However,even under such difficult circumstances,China's aviation industry still managed to establish an aviation industry system in a relatively short time.
In the 1960s and 1970s,AVIC entered a phase of independent development,which led to the development of the national economy.There were two internal and external reasons for undergoing this transformation:the internal reason was that in the1960s,China experienced severe natural disasters； the external reason was the breakup of Sino-Soviet relations and the enormous economic pressure on China.Therefore,China began to invest more in national defense and it carried out a large-scale “Three-Line Construction” comprising national defense,science and technology,industrial and transportation infrastructure in 13 provinces and autonomous regions in the central and western regions with preparation of war as the guiding ideology from 1964.In 1964,Sun Zhiyuan,the minister of the Third Aircraft Department of AVIC,formulated the strategy of “moving from imitation to self-development” at the meeting of leading cadres of the AVIC.
In the 1980s and 1990s,AVIC entered a stage of comprehensive reform.It carried out a strategic transformation of “military to civilian,internal to external”,which was manifested as “as a combination of military and civilian,civilian to war,military-oriented,and civilian to military”.So far,AVIC has embarked on two paths:the first was to break through the boundary between the military and civilian and have the military join with the civilian； the second was to go international and expand the foreign military sales market.
From 2000 to 2008,AVIC had experienced a stage spanning the century.In this 21st century,AVIC has made great contributions to civil aviation.In a response to the country's call,AVIC had carried out the task of “high-tech project” development and reform to overcome difficulties （the state had invested funds to start the upgrading of aviation weapons and equipment comprehensively to drive the development of the national economy）.At this stage,AVIC Group I and AVIC Group II had started a reform in shareholding,and a new round of reform was coming.
Since the restructuring of the China Aviation Industry Corporation I and the China Aviation Industry Corporation II in 2008,AVIC has entered a new stage of development,advanced the national defense modernization process and made important contributions to national economic development as well as scientific and technological progress.
In 2008,AVIC established the strategy of “two fusions,three innovations,five modernizations,one trillion yuan”.“Two fusions” refers to the integration of the world aviation industry chain and the regional development economic circle； “three innovations” calls attention to the transformation and upgrading from “assets,management and technology” to “brand value,business model and integrated network”； “five modernizations” touches on the promotion of market-oriented reform,professional integration,capitalized operation,international development and industrialized development； “one trillion yuan” refers to striving for an average annual growth of 20% in economic scale,and finally achieving the goal of challenging the economic scale of one trillion yuan.
With the development of AVIC,it changed its strategy to “one focus,two integrations,three strengths and five transformations” in 2019:“one focus” refers to strengthening the original intention of “serving the country by aviation” and adhering to the mission of “aviation power”； “two integrations” refers to the new development mode of “military civilian integration” and “industrial integration”； “three strengths” refers to becoming a world-class aviation enterprise group with “leading innovation,advanced culture and outstanding competitiveness”； “five modernizations” means adhering to the development path and principle of “intensive operation,precise management,market-oriented reform,systematic development and international win-win”.
6.From building airplanes to building face mask machines:strong organizational agility
With the onslaught of the COVID-19 in early 2020,companies were facing unprecedented challenges and development opportunities.Companies with organizational agility are usually able to respond effortlessly to changes in the internal and external environment and make timely adjustments to adapt to the changes in the environment in order to create business value.In fact,organizational agility is a core capability to respond quickly to the internal and external environment enables organizations to effectively redeploy their resources for value creation and value protection as allowed in the internal and external environment.
After receiving the order to produce face mask machines and strip press machines,AVIC was able to respond quickly.It only takes 16 days to turn from aircraft manufacturing to face mask machine manufacturing,and only 7 days to strip press machine manufacturing.The original scheduled arrangement was disrupted as the needs of the country had to be given top priority.
AVIC deployed and reorganized its human,material and financial resources in the shortest possible time.The R&D team had been involved in development tasks for the manufacture of the next generation of warplanes and had strong knowledge experience and technical operational capabilities.In a stable environment,organizational agility is not a necessary capability for a company,but once the environment changes,a company with organizational agility has a huge advantage.Therefore,in such a complex external environment,AVIC took advantage of the technology and adopted digital manufacturing technology to ensure the advantages of fast production,good quality and high stability of products,which shows that AVIC has strong organizational agility.
7.A Spectacular 14th China International Aviation and Aerospace Exhibition:moving forward from the past and opening up to the future
In November 2022,AVIC participated in the 14th China International Aviation and Aerospace Exhibition and held a press conference in Zhuhai on November 7.At the press conference,AVIC introduced the success of reform and development in the new era showcased in this exhibition.In this air show,AVIC came up with the theme “Aspiring to become a country with powerful aviation,and rising to the future”； they demonstrated their confidence in building a modern powerful aviation and helping the country achieve the second goal of thecentury.
At the air show,AVIC showcased more than 200 independently researched technology products in aviation.Compared with the previous air show,the AVIC products increased by 34%,of which 55 products were exhibited for the first time.The content in the air show reflected “China's strength”“China's value” and “China's spirit”,thus showing the strategy of “one focus,two integrations,three strengths and five transformations” that AVIC has adhered to since 2019.
8.Guided by the spirit of the 20th National Congress of the Communist Party of China,adhering to the New Concept for Development
In the Report to the 20th National Congress of the Communist Party of China,General Secretary Xi Jinping pointed out that“the New Concept for Development should be implemented fully,accurately and comprehensively.” Responding to the call of the country,AVIC guided the whole group to follow the New Concept for Development in the aspects of innovation,coordination,green growth,openness and sharing in its daily production and operation activities.
With the concept of “green development and harmonious development”,AVIC attaches great importance to the construction of ecological civilization,promotes the optimization of industrial structure,accelerates the elimination of backward production capacity,establishes a resource-saving and friendly industrial system,and develops highly efficient and environmentally friendly turboprop regional aircrafts and advanced civil aircrafts.AVIC effectively implements environmental protection requirements in all aspects of product development and manufacturing as well as actively builds a green aviation industry chain and an energy-saving and environmental protection management system.
In 2019,AVIC responded to the Belt and Road Iniative and shared its technology to countries and regions around the world.Since 2005,AVIC has undertaken nearly 40 civil aviation training programs and trained more than 1 000 civil aviation officials from developing countries and regions around the world,promoting civil aviation technology to the world and developing the “Going Global” strategy.
At the start of 2020,when the COVID-19 broke out,the R&D team of AVIC Manufacturing Technology Institute carried out technological innovation,which not only greatly improved the speed of mask production but also improved the quality of masks.In the face of such an arduous task,AVIC took the initiative to produce face mask machines and strip press machines,and then distributed face mask machines to all parts of the country,which alleviated the serious shortage of masks under the COVID-19 epidemic.
AVIC companies overseas also actively rushed to help those overseas.After the domestic epidemic situation has eased relatively,overseas employees actively supported overseas partners in their fight against the epidemic,and promptly sent masks （domestically made and donated）,gloves and other anti-epidemic materials and anti-epidemic funds to the foreigners.
According to statistics,by the beginning of 2022,China had provided the international community approximately 372 billion masks,over 4.2 billion pieces of protective clothing,8.4 billion test reagents,and over 2 billion doses of the new crown pneumonia vaccine to more than 120 countries and international organizations.In fact,China is the only country that provides the most vaccines to foreign countries.
AVIC has shown that it will continue to implement the New Concept for Development,carry forward the spirit of aviation in serving the country and provide due contributions to the comprehensive construction of a socialist modern country and the extensive promotion of the great rejuvenation of the Chinese nation.