The Steel Wire sits down with three POSCO China employees to get a closer look at what POSCO is doing to stay competitive in China despite challenging market conditions. We spoke with Kim Huyn Ah, a manager at POSCO-CSPC in Suzhou that manufactures advanced auto steel; Yuan Feng, a manager in the Maintenance Department at Zhangjiagang Pohang Stainless Steel who has been with the company for 15 years; and Wang De Hui, a quality control specialist at Qingdao Pohang Stainless Steel.
High-Quality Steel Products Keep POSCO Competitive in China
In China, several factors have led to more difficult market conditions. Can you tell us about what it is that POSCO is doing to stay competitive in China? How do POSCO’s steel products compare to those from other companies?
Kim Huyn Ah: POSCO has done several things to remain competitive. First, we have focused our attention on creating high-quality World Premium Products. As you know, there is a lot of low-priced, low-quality steel, but our World Premium Products stand out because we are able to make them consistently and without defects. Secondly, POSCO has positioned itself near other key industries. For example, our machining centers in China are located near other large international car manufacturers like GM and Volkswagen. So, even when market conditions go south, there is always stable demand simply due to the geographic proximity.
Yuan Feng: In mid-2015, our production output of World Premium Products was around 30%. By 2016 that had increased to 49%, and as of January 2017, our total output consists of 55% World Premium Products. As Huyn Ah said, other companies can make similar products, but no one can do it at our speed and consistency. Our customers rely on that.
Wang De Hui: Because of the overcapacity of steel, things were difficult for a while, but they are getting better. We get our raw materials from HQ, and because our raw materials are better we can provide better products. And actually, the abundance of low price, low quality steel ended up creating more demand for our advanced, high-quality steel products.
We are committed to maintaining higher quality products. Each year we analyze the steel to make sure the raw materials and production processes are better, more advanced, and with fewer impurities. I know the difference between our materials and our competitors. What we get from Korea is just better.
Better Customer Service with Solution Marketing 2.0
In addition to producing high-quality steel, how does POSCO stand compared to other steel companies? What is it doing to keep customers satisfied?
Kim Huyn Ah explains the importance of POSCO’s high-quality products in China’s market
Kim Huyn Ah: At POSCO, when questions come up, or if a problem occurs, we do our best to find a solution as soon as possible. Through POSCO’s Solution Marketing 2.0, we provide our customers the tools they need to maximize convenience and efficiency in utilizing high-quality steel. Solution Marketing 2.0 is practiced under three strategies: digital solution marketing based on advanced IT technology; innovative solution marketing that focuses on speed, value and quality; and tailored solutions that provide comprehensive support for each customer. This process helps our customers understand the balance between a product’s features, price, and long-term benefits.
Also, we work hard to provide products to clients on time and on schedule. It is one of the most basic parts of our job, but oftentimes one of the most difficult to control due to floods, typhoons, or other things that are out of our control. Customers demand more, so at POSCO CSPC we have made production systems management a priority so that we can deliver our steel products on time. Because of these improvements, we have been able to meet delivery times more effectively than other steel companies in the area.
Yuan Feng: Huyn Ah really touched on a lot of the important points for us, but I would like to add that POSCO now has an entire department dedicated to service. Now we are able to listen to customers more effectively and respond to their questions and feedback more quickly. We do our best to solve problems as quickly as possible.
Wang De Hui: The Chinese steel market has grown very quickly. Because POSCO is almost 50 years old, we have a better understanding of service and quality. That being said, our competitors in China are learning fast. We must continue to adapt and be competitive. Last year, POSCO set up a Solutions Marketing program to promote high-quality products and customized solutions. Our customers really appreciated that we had higher quality products and were willing to work with them for individualized solutions.
POSCO Fosters Employee Development
All of you are in Korea participating in POSCO’s Global Mobility Program (GMP) where you are able to collaborate with other POSCO employees from around the world while developing new skills at HQ. As part of the management team in China, how has POSCO helped you grow in your career?
Kim Huyn Ah: It is helpful for me to take part in the Global Mobility Program. Seeing HQ and how they work helps us understand the full system process better. Also, as a Korean, I am often in the middle between HQ and our local Chinese office. It can be difficult to understand communicate to both sides effectively. But POSCO has supported me in my career and this experience will help me have a better understanding of the work process in Korea.
Yuan Feng explains the significance of being able to get training at POSCO HQ. His work in maintenance is critical to maintaining smoothly running factories that deliver POSCO’s steel products on time and without defect.
Yuan Feng: I joined the Global Mobility Program because I wanted to learn more. My department is new; it was just formed last year so I want to see more about POSCO and how it works. I think the GMP gives me the opportunity to develop more as an employee, but also in other ways as well. For example, I can have the chance to work with people from other countries and learn about their cultures as well. When I first started, I had to work with some people from Indonesia. We both had a bit of trouble understanding each other, which is natural. However, after we learned about each other’s cultural backgrounds we could understand each other much better.
I will be in Korea for 6 months. During that time I want to create a new system for our Maintenance Department so that it can be more stable and strong. In addition, because it is a new department there needs to be a systematized program for development. We have done well since last year, but we have bigger goals and we want to do more.
Wang De Hui: This is an exciting opportunity for me. I want to improve my skills and do more with POSCO. Being a quality control specialist, I’m responsible for collecting data and measuring performance and customer choice. It is important for me to know how these things are done at HQ so we can improve our efforts in China.
POSCO is Tops in CSR in China
POSCO has won many awards around the world for its CSR work. In particular, it recently won one of the top awards for Corporate CSR work in China. Have you participated in any of POSCO’s CSR events? What effect do those activities have on the community?
Kim Huyn Ah: At POSCO CSPC we have a CSR department that organizes several activities. We have events to plant trees, visit nursing homes, and help out at homes for disabled children. My most memorable experience was when I visited a home for disabled children. When we visit, they greet us so warmly and show so much gratitude.
Wang De Hui has seen the impact of POSCO China’s CSR work
Yuan Feng: At our office, we participate in several CSR activities. We help out with environmental initiatives and with the local communities around the factory as well. We support 3-4 families regularly with supplies and help them with simple things like painting their houses. We sometimes go on trips with them. In the beginning, we would simply donate money, but after seeing the benefit to the communities, and for the staff as well, we are becoming more and more active with CSR activities.
Wang De Hui: At POSCO Qingdao, we organize an event every month. It is well attended by our staff as even our general manager and department managers go. I’m glad we do things like this and I enjoy participating. We mainly go to help out at public nursing homes and schools for the deaf. We also raise money to buy basic needs, such as food, clothes and home appliances. Activities like this have given POSCO a good reputation in the local communities, which is important.
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