Table 3 AVIC SOM upgrade mode codes.

Upgrading basics

Information transformation

Introduction of Industry 4.0 production lines, acquisition of information companies

It is a professional high-tech company that integrates R&D, production, sales, and service of composite materials (SEC3). The company’s development direction is “high-quality” CNC machining centers (SEC4). It uses technologies such as big data and cloud computing and algorithms such as artificial intelligence and blockchain to empower the entire production and operation process and strengthen the deep integration of business and cutting-edge technology (SEC5).

Technological innovation-PD

Diversification of product range and modules

Innovative products in high-performance resin and prepreg technology, new structures for high-performance composites, resin-based composite manufacturing technology, metal-based and ceramic-based (including C/C) composite molding technology, material characterization and testing technology, and advanced non-destructive testing technology (FIR3). It has a complete R&D and production system (SEC6).

Technological innovation-SI

Service architecture optimization, customer group optimization

The company has accumulated technology in the vital process of prepreg preparation and perfect resin system reserves. The prepreg for military and aviation needs to be involved in the research and development and the completion of technical index confirmation at the pre-research stage of military aircraft (FIR1). The industry-wide restructuring effectively contributes to enhancing technical and service capabilities and optimizes resource allocation and asset structure (FIR4).

Institutional innovation

Restructuring and improving the institutional framework

It is proposed to promote the improvement of the modern enterprise system, improve the corporate governance structure, promote the conversion of the operating mechanism of enterprises, amplify the functions of state-owned capital and achieve value-added of state-owned capital (FIR2). Under the system, research institutes and university institutions focus on the urgent need for high-end manufacturing, essential frontier innovation, and critical core technology research. Some production tasks are delegated to the industry, allowing enterprises to develop (SEC1).

Organizational innovation

Team building, management ladder development

The “three-tier structure and two levels of operation” reform and construction of the central business organization system. “three-tier structure and two levels of operation” means that the parent company and the subsidiaries are granted full operating rights. At the same time, the grandchildren, i.e., the third tier, have no or no full operating rights at all (SEC2). The management team has many years of experience in the industry, with extensive experience in research and development and production, and can make sound decisions on the development of the company’s operations and the effective implementation of the company’s strategy (SEC6).

PD

Product functions

New product breakthroughs, technological paradigm shifts

Domestic enterprises already have the technology and batch production capacity of T300-grade and T700-grade carbon fibers for aviation; T800-grade carbon fibers have completed engineering trial production. (SEC1). In the various types of aircraft types under study, most composite materials have been designed to use more than 20% of their structural weight (SEC5).

Functional modules

System framework, functional boards, and clusters

In terms of manufacturing technology, advanced technologies such as digital manufacturing, automated assembly, advanced manufacturing processes, and complex parts manufacturing are represented, showing trends in automation, information technology, and intelligence (FIR2). Future technology directions focus on critical technologies for production lines of 10,000 or even 100,000-piece composite parts and environmental friendliness and recycling of composite parts (FIR4).

Components and products

Patent applications, product output

Civil aviation aircraft braking device and friction material localization development (FIR3). The Company applied for 57 accepted patents during the reporting period, and 22 patents have been granted. The Company has a batch production capacity of resin, prepreg, and honeycomb for aviation composite materials (SEC5).

SI

Service marketing

Service model, service level

Accelerate the construction of the production park, continuously improve the production management model and continue to expand production capacity (SEC1). Strengthened synergies among stakeholders to focus on value creation, business success, and shareholder returns with a synergistic and innovative development strategy (SEC2).

Intellectual property management

Knowledge building and management

It realizes the conversion of old and new dynamics with investment in high-quality, high-tech projects to create irreplaceable core competencies (FIR1). It has a long history in the localized development of brakes and friction materials for civil aviation aircraft. It is the first recipient of the Component Manufacturer Approval Certificate (FIR4) among domestic civil aviation aircraft brake manufacturers. Its product service, engineering, and industrialization projects have been included in the national Torch Program and the New Product Promotion Program of the National Defence Science and Industry Commission and Beijing Municipality many times (SEC5).

Product and service integration

Systematic products-services

Inclusive, diverse output

Built into a comprehensive large-scale state-controlled listed enterprise for the research and development and production of new aviation materials and the research and development and manufacturing of high-end intelligent equipment (SEC1). Business covers new aviation materials, high-end intelligent equipment, rail transportation, automobiles, medical devices, equipment manufacturing, real estate, innovation, and entrepreneurial investment, etc. (SEC4)

Model upgrading

Gridded and scaled up

After years of development, AVIC’s products have a perfect market service network, covering the whole country and are sold to Japan, the European Union, and other countries and regions (SEC1). AVIC to build a high-tech enterprise group with synergistic development in the two significant military and civil affairs fields and mutual promotion of industry and finance. To give full play to the advantages of the listed company in terms of institutional mechanism, corporate governance, financing, and investment, and to promote the transformation and industrialization of high-tech achievements in strategic emerging industries such as new aviation materials and high-end intelligent equipment manufacturing (SEC6).

Corporate performance

Improvement in key economic indicators

Ensure the completion of production delivery tasks and annual operation targets, achieving annual sales revenue of RMB2.9 billion and a total profit of RMB400 million (SEC1). Improve internal management and production efficiency through management tools such as AOS, ERP, and the technical transformation of intelligent production lines to ensure the completion of research and production tasks and balanced delivery. Finally, achieve the targets to improve the total asset turnover ratio, return on net assets, funds tied up in production costs, and accounts receivable funds (SEC3).