To achieve profitability, it is necessary to focus on both ’’firsts’’

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Recently, the main page of Phoenix News has continuously published articles on state-owned enterprise reform. The priority of safety has taken root in people’s minds, while the priority of quality has been forgotten. The ultimate goal of putting safety first is to reduce casualties and property losses. The ultimate goal of putting quality first is to improve efficiency and eliminate safety hazards; both goals lead to the same outcome and are equally important. Why do companies these days only emphasize safety first and not quality first? There is a shortage of talent, and even fewer scarce talents. Safety can be easily ensured, but it’s harder to ensure quality. Take our oil refining industry as an example: the semi-finished products produced by the atmospheric and vacuum distillation units must undergo further processing in downstream units before they can become ready-to-market finished products. Those who have studied economics know that the lower the quality rate of semi-finished products, the higher the costs associated with further processing at later stages; and vice versa. What is the pass rate for the semi-finished products of our equipment? Less than 50%. Since the light hydrocarbons plant came online, the pass rate for the stable vapor initial boiling point has been less than 10%, yet the recorded pass rate is quite high. Why is that? It’s fraud – if a quality indicator is not met, a fine of 400 yuan is imposed if it exceeds the limit, and 100 yuan if it falls below the limit. In this way, the operators won’t need to receive bonuses. Finally, the method of fraud used is different from that of those at higher levels; it involves one level deceiving another until it reaches ****. The low pass rate of the semi-finished products of the leading device leads to increased production costs for all devices downstream, resulting in poor profitability for the company. Who can solve this puzzle? . Let’s analyze why we have the situation we see today. The wage reform in 2002 failed, driving away or forcing out a group of experienced workers and managers, which created a skills gap. Fourteen years have passed since then, yet the enterprises have not recovered. And this generation, which serves as a link between the past and the future, is about to retire. The wage reform in 2002 called for a more knowledge-based and younger workforce. These people in upper management attended primary school during the Cultural Revolution; their foundational education was poor, and they had limited literacy. There is an even greater lack of the ability to use abstract thinking to solve production problems. The pass rate of semi-finished products is low; we should look for reasons in terms of technology, manufacturing processes, and operations, rather than relying solely on rewards and punishments. Otherwise, what is the need for a technology and quality department? **The Prime Minister recently said that the core issue in the reform of state-owned enterprises is streamlining operations. For my company, there are too many managers; people are overstaffed, incompetents are getting paid, and they come up with poor ideas. This puts heavy pressure on frontline staff, leaving them at a loss and causing widespread complaints. Now, only through reform, by getting incompetent officials out of management positions and streamlining institutions, can this be achieved. Only then can a company slim down and get fit, moving forward with a fresh look and reduced burden.