Chapter 78: The Need to Master the Core Technology

After Wong Quan Long’s explanation, Chen Jin realized the cause of having this huge supply chain crisis for Ling Feng Jing Mi Company. First, the whistle-blowers of the local competitors gave the two Japanese suppliers the opportunity to take advantage of them. Second, the negotiation representatives sent by Ling Feng Jing Mi Company only agreed on the contract, they did not sign it, so there was no breach of contract with this change. Lastly, Ling Feng Jing Mi Company was only an insignificant OEM enterprise with limited capability. The two Japanese suppliers wouldn’t even worry about offending such a client; moreover, they could use this as a means to suppress the development of the electronics OEM industry in China.

Therefore, in the face of this supply chain crisis, Xing Hai Technologies and Ling Feng Jing Mi Company were left with only two choices: A full refund and a sincere apology to the consumers, or agreeing to the terms made by the Japanese suppliers to purchase one million pieces of the parts. Adding that to the remaining five hundred thousand pieces in stock, they could at least account for most consumers. But for the users who could not receive the products, the company could only offer a refund and apologize sincerely.

But the price was to reduce the profit of every Wa-wah robot to two hundred, or less. Regardless of the consequence, it was unacceptable and unbearable for Xing Hai Technologies and Ling Feng Jing Mi Company. This was a severe crisis that could shut the two companies down!

But it was a pity for both the evil counterparts in the country and the two Japanese suppliers, as they were all mistaken. For Chen Jin, the problem of the supply chain was only an insignificant trouble. He had a solution!

…

On Planet Haierfa, in the Base of Operations, in a steel plate room with an area of ​​more than 80 square meters, Chen Jin held a spare part in each hand and said to the AI projection before him, “Alice, I have the brushless motor part in my left hand and a moving part of a hydraulic arm in the right. With the technology reserve on the Base, can we reproduce them?”

A flash of green light was projected from the sensor. It scanned the two parts individually. “No problem, my master. These were the outdated products from two hundred years ago. As long as the raw materials are sufficient, the capsule factory in the Base can mass produce these products.”

Alice said that she had recently finished a hardware upgrade and transferred herself to a more advanced supercomputer. The maximum computing capability was ten times more than before, reaching a hundred quintillion per second. Not only that, but the power consumption was only 300KW, which was three times better than before. Apart from that, the storage of Alice’s database increased from 20PB to 70BP, and it contained a huge amount of technical information. In short, the AI Alice was more powerful than before.

Chen Jin nodded, still feeling a bit worried, and said, “Alice, can the parts produced in the capsule factory keep up to the standard? For instance, the brushless motor in my hand can be used continually for twenty thousand hours on average without any malfunction. There are hardly any similar products that can compare with its excellent stability.”

“Master, are you questioning the technology of two hundred years later, saying that it is not as good as two years ago?” Alice rolled her eyes, saying confidently, “Master, Alice can promise that with the same material structures, our capsule factory can produce a brushless motor with thirty thousand hours of life expectancy without any malfunction, with a 20% increase in the maximum spinning speed. The stability and controllability will be better, reaching the maximum limit that the materials permit. If we use nanomaterials with better physical properties, the brushless motor produced by the capsule factory can last for more than two hundred thousand hours, doubling the maximum spinning speed, and we can even take the stability and controllability to the next level… If you don’t believe me, master, I can start the capsule factory and produce a batch of brushless motors for testing.

“Very well then, seeing is believing!”

Very soon, with the capsule factory, Alice produced a hundred brushless motors using ordinary materials, and another hundred using the nanomaterials. Then, she tested them against the brushless motor brought by Chen Jin. The results smacked Chen Jin right on his face, removing all of his doubts. His eyes glistened. Powerful, this was way too powerful. Especially the brushless motor made with nanomaterials, the sound was different, it was clear and pleasant, beating the Japanese brushless motors in every way possible. The one using ordinary materials performed well too, the maximum spinning speed had an obvious boost while the stability and controllability were about the same. It could substitute the Japanese brushless motors perfectly.

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Regarding the moving parts of the mechanic arms — a cylindrical hydraulic device, the capsule factory also produced an improved version of the substitute.

Chen Jin was finally relieved. The supply chain crisis of Ling Feng Jing Mi Company was finally over. The respective 1.5 million brushless motors and the moving parts of mechanic arms could be supplied by the Base of Operations provisionally so that it would not affect the supply of the Wa-wah robots. And a brushless motor was only as big as a ping-pong, and a moving part of the mechanic arms was even tinier. A large sack could contain at least four to five thousand pieces!

Chen Jin only needed to drive two times a day, or he could ask Ling Feng Jing Mi Company to send someone to pick up the stock. Fifty thousand spare parts per day was not a problem at all.

Suddenly, Chen Jin’s eyes sparkled. “I remember Su You Jie once told me before, that imported brushless motors were expensive and cost $315 for one; Imported Japanese moving parts of mechanic arms were even more expensive, and cost $364 for a pair. Wong Quan Long also said that core components like brushless motors and moving parts of mechanic arms did not really have substitutes, therefore we didn’t have a big discount even if we place an order of ten million pieces. Three hundred multiplied by two equals six hundred, accounting for 30% of the hardware cost. I can earn fifty dollars more, compared to the five hundred and fifty dollars earned by selling every Wa-wah robot. Regarding the production cost of the two components, can fifty dollars get the job done? Take fifty dollars as the cost, the profit I can earn in the two imported components is even higher than that of producing the entire Wa-wah robot.”

Chen Jin smiled bitterly and said, “The profit of manufacturing core components is even higher than making a robot!” This explained the decline in the Japanese home electrical appliance industry and the monopoly of the Japanese companies that manufacture core components. Producing machines was not profitable while manufacturing core components could reap a huge profit. Between doing business with a dollar profit that required strenuous effort and doing business with a ten-dollar revenue that required no effort at all, anyone in their right mind could make the choice. But of course, the threshold of the latter was very high.

Then, Chen Jin found the way to raise the net profit to eight hundred dollars for every Wa-wah robot sold! “From now on, I am going to supply the brushless motors through my own channel; I also need to figure out the way to manufacture the moving parts on my own. I’ve got to be self-sufficient! Assuming that the cost of the two components was fifty dollars, that means that I’ll have five hundred and fifty dollars as increased profit!” That was twice the profit of a Wa-wah robot.

Chen Jin could then become a billionaire if he were able to sell ten thousand Wa-wah robots. He couldn’t help but exclaim, “If I want to make a profit, I have to master the core technology!”

…

Back in the bedroom on Earth, Chen Jin picked up the phone and called Wong Quan Long. “Chief Wong, don’t worry, I have contacted two new suppliers, and they can provide us with qualified brushless motors and parts of the mechanic arms. The price is even lower. I have tackled the problem of the supply chain for you.”

“What?” Wong Quan Long’ eyes bulged in disbelief, and he said, “How is this possible? Are you kidding me, Chief Chen? I am breaking out in a cold sweat, and now you say the problem is solved after just a few hours? Chief Chen, the one you found isn’t one of those local suppliers that produce trashy parts, right?”

“Stop it, you come to Shanghai tomorrow, and I’ll show you the parts I bought. Also, I have two projects on hand that I would like to work with you on. I don’t know if you are interested.”

“Yes! Tomorrow I will… no, I will make a trip down to Shanghai now! See you later Chief Chen!”

“Great, see you later!”