A forging company that is about to go bankrupt, why could it come to this point? Please use practical production cases and data as examples to write an article and translate into English.
The forging industry is an important part of the manufacturing industry, but has encountered difficulties in modern market economy. Due to changes in domestic and international political and economic situations, forging companies have sharply declined. Fierce competition in the domestic market, coupled with other technical and management deficiencies, has led to poor production efficiency for many forging companies over the years. Here we take a certain forging company as an example to sort out the reasons for the bankruptcy of this company from actual production data.
- Decrease in orders
The forging company mainly produces various types of forgings such as ship forgings, automotive parts, and engineering machinery. However, with the intensification of market competition, the order volume has gradually decreased. From the company’s total order volume data from January to July 2018, it can be seen that the order quantity began to decline in the first quarter. In April, the order volume was reduced by nearly 30% compared to the same period last year. Orders did not recover to at least basic levels in the following months. The decrease in order volume caused serious impact on the company’s funds, brands and other aspects.
- Low production efficiency
In addition to the decrease in order volume, the production efficiency of the forging company is also very low. The company has serious problems such as outdated equipment, outdated technology, and loose management. In 2018, the depreciation of the company’s fixed assets exceeded RMB 1 billion, while the profits were only around RMB 400 million. In addition, employees’ training and development have not received the necessary attention. Such backward production methods and management modes cannot adapt to modern market competition and development.
- High costs
Finally, the expenses incurred during the operation of the forging company are also very high. According to the data, in the first half of 2018, the company’s total taxes and fees amounted to more than RMB 300 million, and the costs of employee salaries, material procurement, leasing, and property management were also high. This forced the company to borrow money to maintain production and operation, aggravating the financial pressure.
In conclusion, the above is a simple analysis of the reasons for the bankruptcy of the forging company. Developing enterprises should pay attention to the requirements of modern manufacturing, and improve their technological content. In terms of management, we should pay attention to the improvement of employees’ skills and quality, and achieve comprehensive optimization of production and service processes. Only in this way can we have better competitiveness in the market and future survival space.
