HCD Group Highlights

HCD Group's overseas subsidiary, DMW&H, made a strong appearance at MODEX 2026, a premier global event for manufacturing and supply chain industries. Held in Atlanta, MODEX 2026 attracted over 50,000 professionals and more than 1,000 exhibitors from around the world, making it the largest and most successful edition to date. DMW&H showcased two core solutions—the SURF high-speed automated tote dispensing solution and the indaGO warehouse execution system—at its booth. Live demonstrations received high praise from professional attendees. During the show, Michael Roe, Vice President of Sales at DMW&H, and DJ Klapinski, Software Project Manager, co-hosted a seminar titled "Breaking Bottlenecks with Data: How Intelligent Integration Transforms Operations." The session drew a full house and sparked lively discussions on data, integration, and the power of unified warehouse technologies.

DMW&H also participated in the MHI Spring Meeting and the WERC Annual Conference, held in Jacksonville, Florida. The DMW&H delegation included Jim McLafferty, Senior Vice President of Sales, Marketing, and Solution Development, and Dave Sweitzer, Director of Solution Development. As a member of the MHI Conveyor & Sortation Systems (CSS) Industry Group, Jim McLafferty was invited to moderate a panel session titled "Identifying the Right Timing for Automation," helping organizations across sectors clarify key metrics for automation investment. Attendees actively shared practical experiences, generating a vibrant discussion. In post-event comments, Jim McLafferty noted that many companies expressed optimism regarding their 2026 order books and future growth opportunities, painting a realistic and positive outlook for the material handling and supply chain sector. The event once again demonstrated DMW&H's deep commitment to innovation and industry leadership. Throughout the conference, the DMW&H team expanded its professional network with clients, partners, industry peers, and solution providers, engaging in deep discussions on trends, challenges, and opportunities shaping the future of supply chain operations—further enhancing the international presence of the HCD brand.

DMW&H announced it has successfully achieved SOC 2® compliance certification, confirming that DMW&H has established and effectively implemented rigorous controls in cybersecurity, data protection, and customer trust. Ray Haggar, President of DMW&H, commented: "This milestone underscores our commitment to protecting our clients, partners, and our own organization through the highest standards of cybersecurity and operational excellence. As technology and automation continue to evolve, cybersecurity remains our top priority." Attaining SOC 2® compliance was the result of a company-wide effort, with every employee participating in intensive cybersecurity awareness training to embed data security principles into daily operations. Pam Scully, Client Cybersecurity Manager, added: "Every employee has undergone rigorous training and truly grasps the importance of cybersecurity in their day-to-day work. We are proud to go beyond standards to ensure that our clients' information is always properly protected and secured." This achievement further solidifies DMW&H's market position as a trusted leader in systems integration and warehouse automation.

Achievement Reports

Hubei DMW successfully won bids for a lifting roller platform project from a renowned heavy equipment intelligent manufacturer, and a general assembly conveyance and process equipment retrofit project for the Super Factory of a well-known domestic automotive group's Zhuzhou plant. Shanghai DEMC has been actively expanding its international footprint, making progress in qualifying as a supplier for a globally recognized F-brand automaker, while also advancing overseas projects, thereby accelerating its integration into the global automotive equipment supply chain.

DMW's F-brand automotive body shop project in Ohio serves as a benchmark of the team's professional capabilities. For this project, DMW customized and integrated a multi-tier conveyance system—including overhead and floor-level solutions—for critical areas in the body-in-white process. The team coordinated with over 20 North American partner suppliers, managed hundreds of material deliveries, and flexibly responded to various logistical and scheduling challenges, ensuring high-quality project delivery. This project fully demonstrated DMW's collaborative strength and meticulous attention to detail when facing extreme complexity, earning high levels of client trust.

Technology and Innovation

HCD Group continues to deepen its commitment to technological innovation. From the accelerated implementation of an AI-powered enterprise knowledge base to functional testing of proprietary technologies and products, innovation is driving high-quality development across HCD Group.

Significant progress has been made in the AI enterprise knowledge base project. The project has entered the critical phase of hardware deployment and system development. Server installation and deployment have been completed, while hardware driver and large-model software installation are proceeding in an orderly manner. On the software development front, the university research team collaborating on the project has successfully designed and implemented a summary-based fast-search chain for the initial response efficiency of knowledge-base document queries. This has resulted in a two-stage retrieval process: a default quick-search first, followed by an in-depth search upon user request. The back-end system now supports query string reception, front-end filtering dimensions, and search depth parameters, performing retrieval processes through a unified entry point. In terms of search capability optimization, the R&D team has added query understanding and retrieval plan generation logic to the back-end, converting natural language user questions into structured search plans through query rewriting prompts. For the front-end project search function, two retrieval interaction schemes have been designed and compared, with key search dimensions mapped to practical usage scenarios—providing a unified field foundation for front-end page design and back-end intent recognition. Once fully operational, this system will significantly enhance the utilization efficiency of HCD Group's knowledge assets, delivering intelligent knowledge services to all business units.

Proprietary technology and product development are advancing steadily. Functional and performance testing of the proprietary AMR motion controller continues in accordance with the testing plan. Module development for the Digital Intelligent Training Workstation has completed target station deployment on the self-developed software platform. In terms of AI technology application, robot-adaptive technology continues to advance on-site verification of map-generation algorithms. For product development, long-term stability testing of APC series product prototypes is ongoing, and long-term stability testing of modular belt products is also progressing.

At MODEX 2026, DMW&H showcased its cutting-edge innovations in warehouse automation. The SURF solution leverages industry-leading high-speed automated dispensing technology to deliver precise, stable tote handling with breakthrough throughput efficiency, drastically reducing manual intervention and setting a new standard for automated dispensing. The indaGO warehouse execution system integrates intelligent system orchestration with real-time data-driven decision-making, optimizing warehouse workflows via advanced algorithms to enable full-process visibility and dynamic scheduling—effectively providing conventional warehousing with a "smart brain." Together, these two products—addressing execution efficiency and intelligent dispatch respectively—highlight DMW&H's technological leadership and continuous innovation in systems integration and warehouse automation.

Team and Talent Spotlight

Employees across all HCD subsidiaries have remained dedicated to their posts: from project commitments during the Labor Day holiday to high-quality deliveries on domestic and international projects, they have vividly embodied the team spirit of dedication, collaboration, and innovation through their concrete actions.

Shanghai DEMC and Hubei DMW jointly advanced 12 non-stop projects over the Labor Day holiday, with 102 employees voluntarily participating in key milestone efforts, ensuring on-schedule progress and fulfilling high-quality delivery commitments to clients.

Overseas project teams, meanwhile, handled complex challenges through professional collaboration. On the F-brand automaker's Ohio body shop project, each team member fulfilled their distinct responsibilities while maintaining close coordination—from tracking shipping schedules to adapting to construction timeline changes and assessing tariff implications. Every step reflected a high degree of professionalism and team cohesion. The successful delivery of this project not only validated DMW's collaborative strength but also showcased the resilience and intelligence of HCD's overseas employees when confronting complexity.

Operational Excellence Initiatives

The subsidiaries continue to deepen its "accounting-based management" philosophy. Hubei DMW has refined project cost management practices by enhancing the accuracy of project solutions, timely issuance of long-lead material lists, and introducing additional approval checkpoints for abnormal change orders—strictly controlling project costs from the source. Shanghai DEMC has further optimized its budget control processes, completed the updated RATE standard confirmation, and finalized rolling budget submissions, bridging project cost and financial accounting data while continuously intensifying cost-reduction outcomes.

The IT Center supports the implementation of lean management through digitalization, achieving multiple advances in management platform development: completing functional upgrades to the OA financial module, launching and continuously improving the supplier quotation system, and achieving key breakthroughs in the AI enterprise knowledge base—providing digital support for management efficiency.

The Human Resources Center is advancing incentive mechanism optimization, focusing on the "Project Profit Award." It has completed rule definition and supplementary clauses, conducted multiple rounds of validation in coordination with Finance, and designed a dedicated accounting standard to address validation issues, balancing corporate operations, project requirements, and employee incentives.

Furthermore, DMW&H's successful attainment of SOC2® compliance certification marks the establishment of a standardized enterprise-wide control framework and risk prevention mechanism in information security and data protection. This accomplishment was not achieved by a single department alone, but through systematic process review, institutional optimization, and company-wide cybersecurity training—representing a lean improvement outcome. It reflects both DMW&H's sustained pursuit of operational excellence and the highest standards of privacy protection, as well as HCD Group's capacity to extend lean management principles beyond traditional production functions. By eliminating management vulnerabilities, strengthening process controllability, and enhancing overall compliance competence, HCD Group has built a trusted operational foundation, providing solid assurance for business continuity and long-term value creation.

Team Culture in Action

HCD Group's "team culture" has been vividly practiced at all organizational levels. From collaborative problem-solving at project sites to team-building activities that strengthen cohesion, and from proactive contributions by overseas teams, all employees consistently uphold the spirit of accountability—"no evasion, no passing the buck"—and adhere to the principle of "united in thought and effort," collectively advancing HCD Group's strategic objectives.

Yasser, General Manager of DMX, wrote in his monthly message: "Every small step forward brings us closer to the results the team wants to achieve. I encourage everyone to continue to maintain a disciplined, positive attitude and a dedicated spirit. Perseverance is the key to achieving our goals." This positive team atmosphere is inspiring every HCD employee to pursue excellence in their roles. Alvaro, a DMX employee, also shared a moving perspective: "Change can sometimes bring uncertainty, but it is also a clear sign that we are growing stronger as an organization. Let us stay united and respond to this transition with patience, empathy, and open communication. Remember: change is not an obstacle, but a natural process of development—and a necessary path for a company with a bright future."

The General Manager of DMW personally champions the application of AI tools, requiring all employees to learn and use professional AI tools, delegating repetitive, low-value tasks such as document processing and chart merging to AI. Each department is actively identifying mature AI tools tailored to their respective specialties—mechanical design, electrical control, project management, etc.—and compiling task lists suitable for AI handling. The Administration and HR Department is leading the roll-out of AI tools across functions, aiming to make AI an office assistant for every employee and to significantly boost overall work efficiency. This embrace of new technologies and continuous growth mirrors a sports team constantly honing its skills, improving collective strength through daily practice.

Management at each subsidiary is deeply engaged at the front-line, taking the lead in tackling critical projects and resolving key issues. From the Human Resources Center conducting in-depth incentive data research at subsidiaries, to the Procurement Center resolving implementation issues for multiple historical contracts, and the Finance Center collaborating with business units to promote sound working capital management—every manager plays an indispensable core role in their respective "position on the field." The General Manager of Hubei DMW personally drives process compliance and AI tool adoption, requiring departments to review workflows and compile AI-suitable task lists. The management of Shanghai DEMC directly addresses collection pressures and accelerates project acceptance to drive cost control. Overseas DMW&H management led delegations to international exhibitions, showcasing technological capabilities and expanding industry partnerships. This top-down sense of responsibility exemplifies the core tenet of the team culture—"no evasion, no passing the buck"—and sets a powerful example for all employees.

Looking ahead to June, HCD Group will continue to be guided by the "team culture" spirit, focusing on critical tasks such as receivables collection, cost control, and project delivery, to fully pursue second-quarter operational targets and lay a stronger foundation for achieving HCD Group's 2026 strategic goals.