Singapore
On September 25, 2025, the Fortune Global 500 Summit was held in Guangzhou. Midea Group’s Vice President and Chief Financial Officer, Zheng Zhong, joined over 350 distinguished leaders from diverse sectors to explore the theme “Small Trends for Big Companies.” During the summit, he delivered an in-depth presentation highlighting Midea’s practices in lean management and strategic business focus.
MBS Lean Model Extends from Internal Application to Industry-Wide Empowerment
Zheng Zhong noted that Midea began by studying the Toyota Production System in its early years and, since 2015, has drawn inspiration from the Danaher Business System (DBS) to develop its own Midea Business System (MBS). This proprietary lean management framework is built on the foundation of lean principles, supported by talent development, and driven by digitalization, while integrating Midea’s industrial internet expertise to deliver end-to-end lean empowerment across the entire value chain. The system has helped advance Midea’s transformation from automation to autonomy.
Today, MBS has been fully implemented across all of Midea’s domestic factories and, since 2023, has been rapidly expanding overseas. At Midea’s home air conditioner plant in Thailand, for example, the introduction of Danaher’s “one-piece flow” value stream layout, combined with KUKA robots and AI-enabled systems, boosted annual output from 2 million units in 2022 to 6 million units, while raising productivity by more than 30%. On September 16, the facility was recognized by the World Economic Forum (WEF) as a Global Lighthouse Factory for Supply Chain Resilience—the first overseas Lighthouse Factory in the home appliance sector. Notably, more than 80% of the plant’s management team is locally hired, with six Black Belts and over 400 Green Belts trained.
More importantly, MBS is not limited to serving Midea alone. It also supports upstream and downstream partners in their transformation journeys, fostering shared benefits across the entire industry value chain.
Two Rounds of Business "Subtraction" Strengthen Core Competitiveness
“Large enterprises often risk becoming bloated; like pruning a tree, they must sharpen their focus on the core,” remarked Zheng Zhong. He explained that Midea has twice applied strategic “subtraction” to strengthen its core business. In 2012, to address the challenge of “growing revenue without growing profit,” the company cut more than half of its product categories and SKUs, redirecting resources into R&D. Since 2022, Midea has further transformed from a pure ToC (to-consumer) model to a ToC + ToB dual approach, divesting non-core categories in its home appliance portfolio as well as unrelated businesses from previous acquisitions.
The impact of this business focus has been particularly evident in China’s channel transformation. To address the traditional home appliance pain points of “long channels and high inventories,” Midea developed the Meiyun Sales System, which enables channel flattening. Small B2B customers can place orders directly via mobile, supported by credit lines (no upfront capital required) and cloud-based inventory (no need to build warehouses). Through an “integrated inventory + single-item direct delivery” model, goods reach end consumers more efficiently. This approach not only enhances the efficiency of small B2B partners and passes on savings to consumers, but also helps Midea stabilize and even expand its market share amid fierce competition.