Study On Light Assets Earning Mode Of Equipment Manufacturing Enterprise Transformation

For more than half a century,the equipment manufacturing industry has become the core industry of the Chinese economy,and its output value has accounted for32.9% of the total industrial output value.However,in recent years,China’s economy has entered a period of slower economic growth,a period of industrial restructuring,and a “trio” of deep water reform.Increases in domestic production and labor costs,environmental pollution problems,and shrinking market space have caused problems such as overcapacity of homogenous products to become increasingly prominent.Traditional heavy asset companies have become very passive in the new economic situation: Product sales have been hindered and operating income has been reduced.The operating costs have risen,and companies that make ends meet have even gone bankrupt.For a long time,the extensive investment in the labor force of the plant and equipment,etc.has resulted in the difficulty of sustaining the extensive profit model with high cost and low technical content.In order to change the status quo and achieve sustained development,China’s equipment manufacturing industry is actively seeking a transformation.How to eliminate backward production capacity,enhance corporate innovation,competitiveness,and service awareness,and find profitable models that are compatible with the company are urgent problems for the manufacturing industry to solve.Shaanxi Drum Power is a leading enterprise in China’s machinery and electronic industry.It focuses on high-end manufacturing and customer service.It also adopts production and processing outsourcing,grasps core manufacturing,innovative core technologies,integrates supply chain,strengthens capital chain management,and meets customer service requirements.Constantly exploring the practice of asset-light profit model,creating a unique corporate competitive advantage and corporate value,and gradually found a way for their own light asset development,to provide sufficient momentum and stable protection for the sustainable development of Shaanxi Drum Power.This article takes Shaanxi Drum Power as the research object,researches and sums up the current transformation cause of ShaanJin Power’s current asset-light profit model,the implementation path of the transformation,and the specificstrategies implemented to ensure the success of the transformation;after that,Shaanxi Drum was selected from 2007 to 2016.The financial data during the year analyzed its financial performance and operating performance after the light asset profit model was transformed.The results show that both its corporate value and operating performance have been greatly improved.This further validates the correctness,feasibility,and superiority of Shaanxi Drum’s choice of asset-light profit model.Finally,we summarize the Shaanxi-Dongguan experience of transforming asset-light profitability models,and draw conclusions and enlightenment in hopes that we can provide new ways and directions for companies in the same industry to transform and upgrade our traditional manufacturing enterprises to obtain valuable new models for reference.