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Shanghai GM How to Guarantee the Quality of Expansion
In April 2003, Shanghai GM Dongyue Automobile Co., Ltd. was officially established, marking a significant step in the company's expansion strategy. Just a few months later, in August of the same year, Shanghai General Motors restructured Jinbei General Motors and founded Shanghai General Motors Beisheng Motor Corporation. Over the course of more than a year, Shanghai GM completed the construction of two major production bases—Yantai Dongyue and Shenyang Beisheng. Combined with the existing Jinqiao base in Shanghai, this created a three-pronged production structure spanning from south to north.
This rapid growth brought numerous challenges, ranging from management coordination to quality assurance. To maintain high standards during expansion, Shanghai GM focused on three key elements: system hardware, software, and human resources. According to Chen Hong, vice president of SAIC Motor Group and general manager of Shanghai General Motors, the company’s sustainable competitiveness lies in its strong system capabilities. By replicating and extending its manufacturing and management systems, and by transplanting lean production concepts into operations, Shanghai GM ensured consistent quality and efficiency across all its facilities.
Building on GM’s global manufacturing framework, Shanghai GM developed its own lean production system, SGM-GMS (Shanghai General Motors Standard Manufacturing System), tailored to local conditions and operational needs. This system was fully replicated and extended in both Yantai Dongyue and Shenyang Beisheng, becoming a core goal for their development. The system not only guided construction but also became a solid foundation for future product quality.
To support the Shenyang Beisheng base, Shanghai GM sent over 30 specialists to handle various aspects of the project, including procurement, logistics, manufacturing, and information systems. Hardware investments amounted to 288 million yuan for equipment upgrades and process improvements, ensuring that all critical production equipment met Shanghai GM’s stringent requirements. On the software side, all process documentation and management systems were adapted to meet Beisheng’s needs.
Shenyang Beisheng also relied heavily on the original GL8 suppliers to ensure material quality. Additionally, over 40 million yuan was invested in building an advanced IT system that covered the entire business cycle—from order placement to sales. The system enabled seamless data sharing between the Shenyang site and the Jinqiao base, allowing synchronized operations and control through a centralized flexible manufacturing system.
A notable personnel training program called “planned on-duty probation†was introduced during the construction of the Yantai Dongyue base and later applied to Shenyang Beisheng. In just four months, 704 employees underwent more than 200,000 hours of technical and managerial training. Front-line workers were trained at the Jinqiao and Dongyue bases, reinforcing the importance of a well-structured and mature system.
Shanghai GM implemented four quality gates—Tryout, Pre-production, Pilot Production, and Formal Production—each led by the Jinqiao quality control headquarters. These gates ensured strict quality control throughout the new vehicle production process. Decisions on quality standards were made collectively by top management, reflecting the core principle of SGM-GMS: quality is managed through the system, not individual judgment.
Every time a quality gate was opened for a new model, it became a major event within the company. At Shenyang Beisheng, the quality system closely followed that of Shanghai General Motors. When the first quality gate for the GL8 relocation project was opened, senior executives traveled to Shenyang to make decisions on-site. Throughout the construction phase, the quality system development was aligned with the project timeline, emphasizing the dual importance of system control and personnel understanding in ensuring product quality.