Friday, February 12, 2010

How Manufacturing's Mockingbird Sings

From batteries to cars, BYD engineers have found that successful product manufacturing begins by copying others

Auto technician Li Xuelin never dreamed of dismantling his boss' Mercedes Benz S300. But one day, that's exactly what the boss ordered Li and a half-dozen colleagues to do.

It wasn't easy. At first, the technicians just stood beside the shiny black car, daring not to touch it. But eventually their boss and BYD CEO Wang Chuanfu broke the stalemate.

Wang stepped up to the car and, with sweat on his brow, gouged the paint job with a car key. "Now you can start," he said.

Li's team disassembled the car, piece by piece, to reverse engineer the luxury car's electronic control system. It was a painstaking but money-saving project that's now become a trademark for Wang and BYD, a highly successful Chinese manufacturer that's proud to be a master copyist.

Since its launch in 1995, BYD has expanded from OEM battery manufacturing into various unrelated fields including IT products, autos and new energy. Li's experience with reverse engineering Wang's Benz has been repeated at many levels by BYD's army of about 30,000 engineers and technicians.

By reverse engineering products made by others, BYD pushed its way into manufacturing production, eventually expanding upstream and downstream in chosen fields to build a profitable, vertically integrated enterprise. BYD won big wherever its elbows went.

BYD's success as a revolutionary copyist has drawn mixed reactions, but of course business champions seldom pay heed to grumblings from those they defeat. When carmaking, for example, BYD found that reverse engineering can cut the cost of a new vehicle by more than one-third.

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