There is a lot of confusion surrounding any manufacturing industry in China, and where there is confusion, there is misunderstanding. In order to clarify some of these issues, we would like to know more about the history of Chervon. Based in China, Chervon has a global layout and manufactures international electric tools. They have manufacturing plants in Nanjing, China and Stuttgart, Germany. They also have sales and marketing offices in the US, Europe, Australia, Germany and China.
A few years ago, we had the opportunity to fly to Nanjing, China for a visit.
We had the opportunity to spend a few days touring their manufacturing facility in Nanjing, China. There, we gained a better understanding not only of their capabilities, but also of Chervon's unique style of conducting international business. After the visit, we got not only the history of Chervon manufacturing, but also the overall situation of overseas OEM and ODM manufacturing.
We also took a more personal look at a company trying to get it right — both in terms of process and environment. It's a big swallow, so we have more than one article about the company and its processes. This article describes the China-based international power tool manufacturer and what we know about them.
What's in the name?
Shakespeare's famous line "What's in a name?" when he wrote Romeo and Juliet . In fact, the story revolves around the clashing tale of two cultures destined to collide. The name "Quanfeng" means spring and mountain. The building itself exhibits a sense of Feng Shui, with Chicago architect Ralph Johnson designing the current R&D building. He came up with the design after listening to company president Peter Pan discuss his meaning and passion for starting the company.
Chervon R&D Building
The Chervon R&D building has many beautiful areas that all employees can enjoy (not just senior staff and management). This includes a fully green roof, a central pyramid spire that culminates in a waterfall and terminates in an indoor fountain, and a running track and basketball court near the top level.
History of CHERVON Manufacturing in China
Shanghai has built most of its skyscrapers in the past 20 years. Considering how many of them there are and the almost limitless skylines in the cities, we found this to be pretty awesome. Chervon itself, built over the past 23 years, has experienced an almost similar explosion of growth. In a sense, it mimics the sudden and explosive growth experienced by entire countries. China's real economy is now more capitalist than communist. This allows it to have enormous manufacturing capabilities. In 1978, the Chinese leadership opened up this new way of life to the government and people and has not looked back.
Chinese people can now go to university and progress from one place to another. Peter's first job was with a state-owned trading company. After about 5 years, he realized that the system was not optimized to produce the best results and products at the level he expected. In this case, Peter, Stephanie and Joy (who are no longer with Chervon) left the state-owned company and started their own company. Chervon itself started out with a dream, some borrowed money, and two hotel rooms. It all developed rapidly from there.
Why can't we do this?
Asking the question "Why can't we do this?" describes a lot of Chervon's history. By doing this repeatedly, companies are able to focus on doing their power tool manufacturing jobs better and more efficiently. As China began to build itself from almost nothing, Chervon paralleled that in its own development. They grew up as a trading business (buying and selling components and products).
Introduce quality control
After 3-4 years, they realize they need to remove some bottlenecks by doing more of the process themselves. Chervon became one of the first companies to start a quality control process. Before that, quality control (QC) consisted of asking, "Is the machine running? OK."
Chervon decided to run his own tests. They invest in the tools they need to test their products. This leads to them being able to learn how to locate the problem, but they still have to rely on the factory to solve the problem. Shortly thereafter, they began hiring teams to focus on developing and designing specific machines.
Start of Chervon Manufacturing
This evolution from machine and component sourcing to problem solving led Chervon to start manufacturing in 1997. Other companies believe that it is impossible for component sourcing companies to delve into the depths of actually manufacturing their own products. Even so, Chervon has managed to maintain many of its existing business relationships while making its own high-end products.
This is all happening at a time when Chinese products are increasingly considered "cheap". They certainly lack a reputation for quality. Chervon once again improved their abilities step by step.
By 2000, the company was making many of its own products and doing them better than many other manufacturers. Chervon is now one of the top ten power tool manufacturers in the world. Their products are sold in more than 30,000 stores in 65 countries. Chervon manufactures products for several well-known manufacturing brands as well as its own labels: EGO and Devon. Not bad for a company that was only founded in 1993.
Chervon OEM and ODM Manufacturing
Throughout Chervon's history, the company has produced a large number of OEM products. They also do a lot of ODM manufacturing. This includes manufacturing products for popular brands sold by Lowe's, The Home Depot, and Menards. At the same time, Chervon is keen to build its own brand. They are particularly interested and excited about selling their products to the Chinese in their own country. This actually brings up the Devon family of tools.
OEM vs. ODM Manufacturing – What's the Difference?
To understand the difference between OEM and ODM manufacturing, you need to understand who calls the shots on design. OEMs bring in finished designs and collaborate on engineering. They decide on all designs and product specifications. The brand is then purchased from OEM manufacturers and sold to the market itself. An ODM manufacturer actually manufactures a product for another company or brand and uses their design specifications to manufacture the product. Another way to look at it is that OEM manufacturers buy products that are already very good. An ODM manufacturer more or less acts as the workhorse in bringing a product idea to life for another company. Being an OEM and ODM manufacturing partner requires great attention to detail. It also requires a very specific set of skills that will make or break a company.
Enter the OPE market with the EGO brand
The level of manufacturing that Chervon is engaged in is comparable to that of Bosch, Makita, and Milwaukee. In fact, they've made tools for some of these companies as an OEM manufacturer. Toolmaking in China is a $1.2 billion market. The field of OPE (outdoor power equipment) is currently dominated by the European and American markets.
This is where Chervon has really stepped up its competition over the past few years. The company quickly gained recognition in the business-to-business market. Now, it has turned its attention to the popularity of the consumer market. Three years ago, Chervon acquired the German power tool company Flex. In 2014, they launched the EGO 56V line of cordless OPE tools and made a strong move into outdoor power equipment.
From ODM to OPE
The EGO name and brand represent a shift to OPEs powered by motors and connected to applications for lawn mowers and handheld OPE power tools. When Chervon looked for growth areas, they realized that OPE had different manufacturers. They are not taking advantage of some of the strengths and advantages of the cordless power tools industry. When Chervon, the largest ODM manufacturer in the power tool industry, spotted the OPE market, they saw a huge opportunity. More than just financial and manufacturing opportunities, Chervon also saw an opportunity to bring some of the environmental benefits of cordless OPE technology to the entire world.
The EGO brand is actually a big step forward for Chervon's own brand of power tool kits. Other companies have expressed interest in replacing corded tools. Chervon President Peter Pan is convinced that lithium-ion could one day almost completely replace gasoline engines . Tools once thought to require refueling appear to be becoming a mainstream battery-powered solution, based on the performance of the EGO Powerload 15-inch Mower and the EGO Select Cut Mower.
Spring and the environment
The R&D building where we started work at Chervon is a complete green roof building. When Peter saw China go from poverty to wealth, he also saw the country start to produce a lot of pollution. This imbalance bothered him. This drives him down harder paths that may require more money and effort. The Chervon Research and Development Building is an environmental marvel.
Much of what is being done is more about long-term benefits and benefits for the environment than short-term cost savings—or even the visible effects it produces. For example, a green roof cannot really be seen from the ground unless captured at the correct angle. According to Chervon, the oxygen production and long-term energy savings are still well worth the effort. Many of the plants throughout the plant come from Germany, so they are expensive – but only from a one-time investment perspective. Heat reflections can be saved in the long run. This saves energy in summer and also heats the building in winter.