Enterprise Quality Credit Report

Part One   Preface

1. Report Preparation Standards

The "Quality Credit Report of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd." discloses the concepts, systems, measures, and achievements of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. (hereinafter referred to as "Huacheng Zhongde") in implementing quality integrity management, establishing the concept of quality integrity, implementing product quality management, brand management, quality integrity management, and fulfilling quality commitments. The report content is explained as follows:

(1) Report Scope

Organizational scope of the report: Shandong Huacheng Zhongde Transmission Equipment Co., Ltd.

Time scope of the report: January 1, 2024 to December 31, 2024

Report release cycle: The quality credit report is an annual report

(2) Statement on Objectivity of Report Content

This report is entirely based on the actual production and operation situation of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd., with objective and fair content, no false data or information. Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. is willing to be responsible for the authenticity of the report content.

(3) Explanation of Report Data

All content involved in this report comes from the actual business situation and data of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd., possessing authenticity, timeliness, and completeness.

(4) Report Release Format

This report is released in both printed and electronic versions. To obtain the electronic version, please visit the website of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. at www.hczd.cn.

2. Chairman's Address

First, on behalf of the management team of Shandong Huacheng Zhongde Transmission Equipment Co., Ltd., I sincerely thank all levels of government, leaders, and people from all walks of life who have always cared for, supported, and helped the development of Huacheng Zhongde, as well as every employee who has contributed to the company's development over the past decade!

Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. was established in 2010 and is affiliated with Shandong Huacheng Group, with a registered capital of 100 million yuan. The company is positioned in the high-end equipment manufacturing industry, dedicated to the research and production of precision reducers and gear components. The "Huacheng" trademark used by the company has been recognized as a famous trademark in China by the State Administration for Industry and Commerce. The characters "Huacheng" mean "Chinese success," and "Cheng" is homophonous with "Sincerity," also implying "integrity." Integrity management is the soul of the company's development. Since its establishment, the company has adhered to the business philosophy of "integrity management and innovative development," promising customers: "Strive for excellence, meet higher customer demands with better quality."

The company has long focused on the research and production of precision reducers and gear components, successively developing nine major series including M, HB, KPL, MS, and thousands of specifications of gear transmission equipment. All products have been appraised by industry experts, reaching international advanced levels, fully replacing imports. They are widely used in ports, metallurgy, alumina, electric power, building materials, coal, mining, hoisting, environmental protection, chemical, papermaking, light industry, and other industries. They have also been successfully applied in key projects such as the Chinese Academy of Sciences aerospace UAV research, wind tunnel testing, tank armor, and large shield machines.

The company will take the revitalization of the national equipment manufacturing industry as its mission, continuously promote refined and specialized internal management and international market development, and rely on advanced technology, reliable quality, and perfect service to become one of the most competitive suppliers in the global transmission field.

3. Company Profile

Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. is affiliated with Shandong Huacheng Group, established in March 2010, located at No. 126 Zhangbo Road, Boshan District, Zibo City. It is a national key high-tech enterprise, a national specialized and new "Little Giant" enterprise, a national service-oriented manufacturing demonstration enterprise, a Shandong Province manufacturing single champion demonstration enterprise, and a Shandong Province gazelle enterprise. It has a Mechanical Industry Engineering Research Center, Shandong Enterprise Technology Center, and Shandong Industrial Design Center. It is the chairman unit of the Gear Reducer Branch of the China General Machinery Industry Association. As a leading domestic gear transmission equipment R&D and manufacturing enterprise, the company is positioned in the high-end equipment manufacturing industry, dedicated to the R&D and production of high-precision gear transmission equipment. The company's main products focus on modular precision reducers, high-power heavy-duty gearboxes, geared motors, wind power gearboxes, and high-end gearbox replacement and remanufacturing.

  Constant Temperature Processing Workshop                   Reducer Testing Center

Company Showroom                    Heat Treatment Production Line

The company owns more than 470 large and medium-sized processing equipment such as imported gear grinders, machining centers, and CNC lathes. The company has introduced internationally advanced processing and heat treatment equipment including German Hofler CNC gear grinders, American Gleason bevel gear grinders, Austrian Achillini heat treatment production lines, Japanese Mitsubishi, Mori Seiki, and Italian Parma machining centers. It has also purchased high-precision testing equipment such as the German Klingelnberg gear tester and German Wenzel CMM, and built a 3600kW loading test bench to ensure the accuracy and quality of transmission equipment. CNC equipment accounts for more than 90% of all equipment.

The company has a product R&D center in Munich, Germany, introducing advanced German design technology and process standards. It has successively developed nine major series including M, HB, KPL, and thousands of specifications of gear transmission equipment. All products have been appraised by industry experts, reaching international advanced levels, fully replacing imports. They are widely used in ports, metallurgy, alumina, electric power, building materials, coal, mining, hoisting, environmental protection, chemical, papermaking, light industry, and other industries. They have also been successfully applied in key projects such as UAVs, wind tunnel testing, tank armor, and large shield machines.

Part Two   Main Report

1. Corporate Quality Philosophy

Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. has long adhered to the quality policy of "striving for excellence, meeting higher user demands with better quality," regarding product quality as the life of the enterprise, always serving market customers with excellent quality products and sincere attitude. The company implements an innovation-driven strategy, continuously improving product quality through technological innovation and leading industry technological progress. The company places product quality improvement as the top priority in brand cultivation and construction, strengthens trademark protection, and strives to improve product and service quality to maintain its brand reputation.

Over more than ten years since its establishment, the company has always firmly controlled quality, strengthened quality management, and continuously strived to achieve the replacement of imported transmission equipment with Chinese-made products and mass exports.

2. Internal Quality Management of the Enterprise

(1) Quality Management Organization

Shandong Huacheng Sino-German Transmission Equipment Co., Ltd. is led by the chairman as the primary responsible person, organizing and determining the company's quality policy and guiding the formulation of the enterprise's quality development strategy; the chief quality officer, as the management representative, is fully responsible for the company's product quality work, organizing the formulation of the company's quality objectives, annual quality work plans, quality assurance measures, and quality system improvement plans. According to GB/T19001-2016/ISO9001:2015 quality management system, also referring to GB/T 24001-2016/ISO14001:2015 environmental management system, GB/T45001-2020/

ISO45001:2018 occupational health and safety management system, a complete quality management system has been established, defining the quality responsibilities of personnel at all levels. The company fully utilizes quality management tools to analyze and implement quality improvement, minor changes, quality breakthroughs, and other quality management activities involving all employees, strictly manages quality costs, conducts quality education and training through multiple channels and forms, and continuously deepens the construction of corporate quality culture.

The Quality Inspection Department is the company's specialized organization for quality management and product inspection, fully implementing the quality minister responsibility system. The members are professional, highly qualified, and responsible, responsible for quality control throughout the entire process and lifecycle, including raw materials, incoming inspection of purchased parts, product manufacturing process monitoring, full performance testing of products, and factory inspection. Each link strictly follows job operation specifications and conducts work quality assessments. The product quality implements a "zero defect" system to ensure that products delivered from the factory are 100% qualified.

(2) Quality Management System

Shandong Huacheng Sino-German Transmission Equipment Co., Ltd. has strictly established a quality management system in accordance with ISO9001 standards since 2010 and has continued to this day without interruption. The conformity, suitability, and effectiveness of the system have been strengthened.

The company's quality management fully embraces the concepts of "prevention first" and "right the first time." Products have passed quality management system certification, environmental management system certification, occupational health and safety management system certification, coal safety certification, etc. The company fully absorbs and applies the above system standards, streamlining processes in product design and development, material procurement, production processes, batch management, delivery, nonconforming product control, and failure mode and effect analysis, building a flood barrier for product quality.

The construction of the quality management system cannot be separated from customer attention and guidance. The company communicates with suppliers, customers, and other stakeholders through information disclosure, various industry newspapers, negotiation meetings, symposiums, bidding meetings, ordering meetings, brochures (CDs), emails, phone calls, visits, questionnaires, etc., conveying the company's values and business philosophy, soliciting opinions from suppliers and customers, and promoting information about the company's products, technology, services, brand, and management. At the same time, the company has technical support experts with rich professional technology and practical experience who can provide technical support and training to users at different levels, offering complete solutions.

(3) Quality and Safety Risk Management

1. Quality Risk Detection

The company establishes risk management procedures according to the ISO9001 quality management system, covering all stages of the product lifecycle and product quality formation, including design, production, delivery and use management, verification and confirmation, technical status control, supplier evaluation, concession use, etc. Under the quality risk system, risk identification, evaluation, control, communication, and audit are conducted. Through systematic management of product lifecycle risks, product quality risks are minimized.

The company regularly monitors and audits product quality risks, consistently performing process discipline inspections, quality inspections, and measuring instrument inspections monthly to confirm design robustness, process stability and feasibility, and applicability of current quality standards. It promptly detects adverse trends, determines directions for product and process improvements, eliminates quality hazards, and ensures product quality remains stable and controlled.

2. Emergency Management

To improve the company's emergency response capability for sudden accidents and dangerous situations, ensure smooth command during major accidents, timely arrival of personnel, equipment, and materials, and safeguard employees' life, property, and environmental safety, minimizing accident losses and impacts, the company has formulated an accident emergency plan based on the "Production Safety Law of the People's Republic of China," "Production Safety Accident Emergency Plan Management Measures," and other relevant laws and regulations, combined with the company's actual situation. The company regularly organizes emergency drills for employees to ensure accurate and timely emergency response. Problems identified during drills are managed in a closed loop, and drill results are evaluated and continuously improved to ensure that emergency plans can be promptly activated during emergencies to avoid risks and reduce harm.

(4) Quality Complaint Handling

The company has established the "Product Contract Control Procedure" and "Customer Satisfaction and Feedback Control Procedure," clarifying communication with users before and after contract execution, including the process for handling customer complaints. The after-sales service department is responsible for communicating with customers and, based on user complaints and suggestions, investigates and resolves issues together with the company's production functional departments. The results are ultimately confirmed by the user. All complaints must be handled in a closed loop and relevant records maintained.

(5) Compliance with Laws and Regulations

The company strictly complies with national laws and regulations such as the Contract Law, Product Quality Law, Metrology Law, Safety Law, and Environmental Protection Law. It emphasizes employee education on legal awareness, quality awareness, and safety awareness. The company has formulated corresponding management systems and, through internal management supervision mechanisms, strictly implements legal requirements to operate legally, honor contracts, and provide honest services.

3. Quality Integrity Management

(1) Quality Commitment

Adhering to a customer-centered approach, treating customers as gods, and making customer satisfaction the highest pursuit of the enterprise, the company values talent team building and guides the enterprise's value orientation accordingly, forming the corporate values of "building an elite team, providing good service to customers with modern management, continuously meeting consumers' changing needs, establishing integrity, and innovating for the future." This has fostered a high-quality workforce that is hardworking, diligent, dedicated, and innovative.

Adhering to the principle of survival through quality and development through technological progress, the company leads employees in technological innovation, management innovation, and system innovation. Driven by innovation and standardized by systems, the company publicly commits to the following aspects:

1. We guarantee that the goods provided are brand new, unused, manufactured with high-quality materials and advanced processes, and meet the quality, specifications, and performance requirements stipulated in the contract in all respects.

2. We guarantee that the goods provided will have satisfactory performance during their service life when installed, operated, and maintained correctly and reasonably.

3. We guarantee that within the quality assurance period stipulated in the contract, we are responsible for any system damage caused by defects in design, process, manufacturing, installation, commissioning, or materials attributable to the seller. In such cases, we guarantee to repair or replace defective parts or the entire machine free of charge within 24 hours after receiving the buyer's notice. The buyer reserves the right to claim compensation for any resulting losses.

4. We guarantee that the technical specifications of the goods provided are consistent with or superior to the standards specified in the bidding documents.

5. We guarantee that the buyer will not be subject to any third-party accusations regarding infringement of design, process, plans, technical data, software, trademarks, patents, outsourced products, or any other aspects when using our equipment.

(2) Operation Management

Guided by integrity and scientific development with a people-oriented approach, Shandong Huacheng Sino-German Transmission Equipment Co., Ltd. integrates all management links and elements into the planning and implementation of the quality management system. In design and development, all participants conduct thorough reviews and actively provide suggestions, comparing past successful and failed experiences, openly acknowledging and not shirking design responsibilities, effectively ensuring the correctness of product quality standards and reducing quality risks. The procurement process not only ensures product quality compliance but also focuses on establishing win-win partnerships. The company encourages integrity and severely punishes dishonesty in procurement shares and settlement stages, leading both parties to jointly build integrity through its own actions. For products and user services, the company clearly supports early problem detection, reporting, and strictly prohibits delivering nonconforming products. The company uses special meetings, regular meetings, and bulletin boards to publish typical cases, creating a strong atmosphere of quality integrity.

(3) Marketing Management

A market economy is market-oriented, and all business activities of an enterprise are for the market. The rapid development of Shandong Huacheng Sino-German Transmission Equipment Co., Ltd. is primarily due to active market development. It is precisely the market's drive that enables the enterprise to develop. The leading role of sales under market economy conditions is fully reflected in the company. First, to meet the needs of the market economy and stand firm in fierce market competition, the company broke the traditional leadership system, appointed multiple deputy general managers to focus on sales, fully leveraging the leading role of market development, greatly strengthening market development leadership, enhancing market control and response capabilities, and improving the ability to navigate and adapt to the market. Second, the company implements direct sales from the manufacturer, reducing intermediaries and shortening the distance to the market. To this end, the company has established a strong sales team composed of technically knowledgeable development talents forming market development groups across various industries nationwide, establishing a complete sales network. Third, the company formulates scientific sales policies to fully mobilize the enthusiasm and initiative of sales personnel. The enterprise bears all sales expenses and does not implement a sales quota system, fully supporting sales personnel with both early-stage technical support for market development and comprehensive after-sales service, enabling them to actively explore the market unburdened. Fourth, an effective market intelligence system is established. The company holds a monthly direct dialogue meeting between the chairman and sales staff to purposefully and systematically collect market intelligence data, providing decision-making support for product development, market development, and payment collection.

The company's strong market marketing awareness, quality management awareness, and measures taken have broadened the market. Products have been sold to all provinces in China and exported to countries such as Australia and India.

4. Quality Management Foundation

(1) Standard Management

The company attaches great importance to standardization construction and has established a Standardization Management Office to organize and guide the company's overall standardization management work. It regularly reviews the latest standards for main products and promptly organizes internal personnel to study and implement new standards, ensuring products fully comply with international, national, and industry standards, reducing product development risks. As a member unit of the National Pump Standardization Technical Committee, the enterprise values product standardization construction and actively participates in the formulation and revision of national, industry, and group standards. It has issued and revised 4 national standards, 1 industry standard, and 3 group standards.

(2) Intellectual Property Management

Intellectual property management has become a core element of market competitiveness. The company attaches increasing importance to and protection of intellectual property. It has established a dedicated Intellectual Property Management Department and formulated specialized patent management systems to fully ensure the exclusivity of intellectual property, encourage more employees to participate in technological innovation, and improve the company's independent innovation capability. The company actively carries out intellectual property work, using patents, trademarks, copyrights, and other intellectual property rights to safeguard its products, improve intellectual property management and utilization levels, and prevent risks. In 2022, the company passed intellectual property management system certification and was recognized in 2023 as an intellectual property advantage enterprise cultivated stepwise in Shandong Province.

(3) Certification Management

The company strengthens quality management, environmental protection management, safety production management, and occupational health management through system certification work. It has passed GB/T19001-2016/ISO9001:2015 Quality Management System Certification, GB/T24001-2016/ISO14001:2015 Environmental Management System Certification, GB/T45001-2020/ISO45001:2018 Occupational Health and Safety Management System Certification, as well as coal safety certification, German MAN certification, coal mine equipment maintenance service certification, and others.

(4) Testing, Inspection, and Metrology Management

The company continuously improves testing, inspection, and metrology equipment levels to ensure product quality. It has introduced German Wenzel coordinate measuring machines, German Klingelnberg gear measuring machines, American Gleason gear measuring machines, spectrometers, magnetic particle flaw detectors, universal tool microscopes, and other testing equipment; it has built a 3600kW loading test bench, reaching a leading domestic level overall.

(5) Special Equipment Management

The company strengthens the safety management of special equipment in accordance with national laws and regulations such as the "Production Safety Law" and the "Special Equipment Safety Supervision Law." By establishing a special equipment management system, regularly participating in government-organized special operation personnel training and obtaining qualifications, the company enhances the safety awareness and operational skills of operators; it conducts professional inspections of special equipment regularly and supervises usage through monthly inspections, ensuring the prevention of hidden dangers and eliminating major safety accidents. No safety failures or production accidents caused by special equipment occurred throughout the year, and the company became a safety standardization demonstration unit in Zibo City.

5. Product Quality Responsibility

(1) Product Quality Level

The company strictly complies with and implements relevant laws and regulations such as the "Product Quality Law" and the "Consumer Rights Protection Law," ensuring honest operation and fulfilling quality commitments to customers and related parties. Products are regularly tested in nationally accredited or industry-authoritative laboratories and are subject to random inspections by provincial and municipal quality and technical supervision departments. Indicators measuring the company's product quality level, such as first-time acceptance pass rate and market feedback quantity, reflect continuous improvement and maintain a leading position in the industry.

(2) Product After-Sales Responsibility

In terms of after-sales service, the company guarantees the fulfillment of the "Three Guarantees" policy. In case of issues, a response is guaranteed within thirty minutes, and personnel will be dispatched to the site within 24 hours; free training is provided to users on operation, maintenance, and care. After the warranty period, the company maintains long-term user records. Service personnel visit users regularly (every 6 months) to supervise usage, maintenance, and care, and provide a list and prices of spare parts needed within two years.

(3) Corporate Social Responsibility

1. Corporate Safety Management

The company attaches great importance to safety management, establishing a safety management team led by the main person in charge (general manager). A comprehensive three-level safety management system is established, clarifying responsibilities, tasks, and performance assessments at each level. The company adheres to the principle of prevention, formulating emergency plans for electrical, fire, flood, and sudden accident prevention, ensuring systems, personnel, and organization are all in place. Regularly participates in safety education training organized by municipal administrative departments and obtains certificates, actively promotes safety production, and holds emergency drills irregularly. Safety is prioritized in monthly and weekly leadership meetings with assigned tasks. In recent years, no serious injuries or above accidents have occurred.

2. Environmental Protection

The company actively implements the development concept that "lucid waters and lush mountains are invaluable assets," placing environmental protection in a prominent position. According to environmental management system requirements, it identifies environmental factors, determines key environmental factors, sets target indicators and management plans for environmental improvement, and ensures compliance through evaluations to meet environmental discharge standards. Environmental impact assessments are conducted for new projects and technological renovations; attention is paid to plant environment construction by planting trees and flowers, greening the environment, and creating a garden-style factory. Waste materials are centrally handled by qualified units according to environmental protection procedures, comprehensively reducing adverse impacts on the surrounding environment.

3. Resource Conservation

In cooperation with the Zibo Municipal Government's Green Power Enhancement Project and the construction of a resource-saving society, the company has formulated the "Energy Saving Management System," determining reasonable energy use and improving resource management levels. Energy-saving work is integrated throughout the production process, with advanced and reasonable energy consumption quotas and assessment methods established. The company has been recognized by the Zibo Municipal Bureau of Industry and Information Technology as one of the first batch of "Green Factories" in Zibo City.

4. Public Welfare Support

The company does not forget its social responsibilities during development. It actively participates annually in the "One Day Charity Donation" event, responds to government calls for rural revitalization, and actively donates to support new rural construction and poverty alleviation. It has successively supported poverty alleviation projects in Qiaodong Village, Shima Town, and Shanwangzhuang Village, Yucheng Town. In special situations such as natural disasters, aid for the vulnerable, poverty relief, and disability assistance, the company provides appropriate donations based on specific circumstances. The company’s party committee and labor union regularly organize visits to employees and party members in difficulty each year. The company actively overcomes the impact of the COVID-19 pandemic, ensuring work and production stability and employment. In 2023, the company donated 50,000 yuan to the Boshan District Charity Federation for charitable development.

Part Three Report Conclusion

1. Report Conclusion

Since its establishment, Shandong Huacheng Zhongde Transmission Equipment Co., Ltd. has been committed to the development of high-end equipment manufacturing, focusing on the research and production of gear transmission equipment. The company insists on survival through quality and development through technological progress, continuously improving product quality and brand reputation, actively responding to changes in the industry environment, enabling the enterprise to maintain healthy and sustainable development. Quality and integrity construction is endless; we will continuously adapt to the needs of society and market customers, focus on new technologies, new industries, new business formats, and new models, accelerate industrial intelligence, intelligent industrialization, cross-border integration, and high-end branding. Driven by the "Four New and Four Transformations," we will continuously improve development quality, accelerate the transformation of old and new kinetic energy, provide better products and services to society and customers, and promote quality and integrity construction to a new level!

2. Feedback

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