FAWQingdaoServiceStationINTERVIEWDATE:March7th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMr.JiaYuhuaPositionDirectorCompanyandAddressQingdaoServiceStation,No220WeiHaiRd.,Qingdao266021Telephone/Fax(0532)3834735BackgroundKeyProcessesKeyIssuesConclusionsBackgroundTherearetotallythreeservicestationsinQingdao,twoofthemareinsuburbareas.FAWQingdaoServiceStationistheonlyoneserviceproviderinQingdaoCity.QingdaoServiceStationissetupin1995;totalinvestment(includingbuildingandequipment)isabout4MillionRMB.Thereare56employeesinthisservicestation,15ofthemworkforservice/maintenanceoftrucks.QingdaoServiceStationisoriginatedfromQingdaoBusRepairingFactory,anoldSOE.Annualincomefromserviceisaround1.2MillionRMBwhileannualincomefromsparepartssellingisaround2MillionRMB.50%oftheserviceincomeisfromoutofwarrantymaintenance.Thoughtheservicestationhaspermissionfortrucksales,duetothelackofcapital,QingdaoServicestationonlysells10-20lighttrucksperyear.CurrentlyQingdaoServiceStation'spartsinventoryvalueisaround1MillionRMBwith2000SKU.Withinthem,onethirdisconsideredaspotentialobsolescence.KeyprocessesCurrentlyQingdaoServiceispreparingareportofrestructuring.TheownershipwillbechangedfromSOEtoCorporativeaftertherestructure.AsrequiredbyFAW,50%ofthefundsareraisedthroughManagerswhileanother50%areraisedthroughemployees.QingdaoServiceisunderAssetEvaluationphase,andMr.Jiahopestogetridofhis300,000RMBobsolescencethroughtheassetevaluation.QingdaoServiceStationhadplannedtobuilditsowncustomerprofileyearsbefore,andpaidgreatefforttoinputinformationinPC.1However,sincetheyarenotfamiliarwiththeusage/analyticaltoolstoutilisethisinformation,dataarekeptinthecomputerwithnousageatall.CurrentlytheyonlykeeppaperinformationofServiceCard.QingdaoServiceStationalsoestablishedsecondreviewtoeachcustomertoensureworkqualityandcollectcustomerfeedback.QingdaoServiceStationattendsannualtraininginChangchunasrequiredbyFAW.Duetotheresourcelimitation,onlyfewpeoplecanattendthetraininginChangchun.RegularsalesreportsaresubmittedtoFAWTruckServiceDepartmentmonthly.Thereisayear-endreviewineveryDecember.WhenencounteredserviceproblemsQingdaoServiceStationcannotsolvebythemselves,twosourceofassistanceisavailable:CallTruckServiceDepartmentinFAWChangchun.CallOn-siteRepresentativeinFAWJinanBranch.QingdaoServiceStationpricesitspartsat15%higherthanthesuppliercentrepriceyearsbefore,butnowthemargindecreasesto10%asmarketcompetitioniskeener.KeyIssuesMr.Jiaclaimedthat100%ofitssparepartsaresourcedfromformalchannel:FAWsparepartscentreinTianjinandZiboDirectlysourcefromFAWsparepartssupplier,e.g.DalianEngineQingdaoOffice.Mr.JiathinksthatthepartssupplyinFAWsparepartscentersisnotsufficientatall.Moreover,sparepartspricefromthemistoohighandnotcompetitiveinthemarket.CurrentlyFAWowesQingdaoServiceStationaround200,000RMB.Comparedtosomeoldservicestations,thisnumberisnotveryhigh.Mr.Jiaiswillingtogetpartsinsteadofcash,butpartscentredoesnotusuallygivehimenoughpartsheneed.Togetpartsfrompartscentreinreturnofserviceincome,QingdaoServiceStationneedstosubmitanorderingplanone-monthahead.However,it'sveryhardforQingdaoServiceStationtopredictthepartsdemand.Moreover,partscentrerequiresservicestationstobuypartstheydon'tneedtogetherwithbestsellingparts.Accordingtotheinformationgotintelephonereviews,thebiggestcomplaintsfromcustomersareabouttheservicestationFeestandard.Mr.JiathinksthatthosecomplaintsareduetothevaguenessinFAW'sproductdescription:e.g.,itstatesthatwarrantyperiodforEngineistenyears.However,actuallysomepartsinenginehaveshorterwarrantyperiod.Whencustomergoestoservicestationforrepairingofthoseparts,theyareconfusedbythepriceandthinkservicestationischeating.ThoughQingdaoattendsregulartraining,Mr.Jiathinksthathistechniciansstillneedmorechancetolearnnewproductinformation.Hesuggesta2smaller-scaleoftrainingorganisedbyregionorprovinces,forthattrainingwillbelowerincost,moreflexibleandfocused.Currentlythestationisunderrestructuring.Accordingtotherulesofrestructuring,employeesneedstocontribute10,000RMBperperson.Someofemployeescangotraisesomuchmoneyandareworryingthatthey'llgetfired.Mr.JiathinksthatFAWshouldbemoreflexibleinthereorganisationformandgivemoretolerancetoordinaryemployees.ConclusionQingdaoServiceStationisrelativelynewandthushaslessfinancialdifficultythanotherstations.Toavoidpotentialproblems,thestationneedstobemoreflexibleandusescientificmethodstopredictmarketdemands.3