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Ten directions of China 's manufacturing transformation

China's manufacturing industry to move to the industry 4.0, must first fill the industry 3.0 classes - lean production; even the industry 2.0 class - IE (industrial engineering).


TPS, 6Sigma, TOC (Theory of constraints, bottleneck theory, often with lean production, Six Sigma), 5S (from Japan's modern factory management theory) are built on the basis of IE!

Internet penetration and transformation of the business sector is reverse, from the consumer's recent advertising and marketing side, into the retail, infiltration into the distribution process, and ultimately forced to the manufacturing sector, in the process of production methods, management philosophy, production Equipment, and even raw materials will be a major change.

What happens to the Internet + manufacturing industry? How does traditional manufacturing companies embrace changes in the Internet? Ali Institute of manufacturing based on the classic theory of manufacturing and industrial edge of the evolution of the clues, summed up the analysis, and the industry to discuss.

1, the Internet + manufacturing industry is forced out of the transformation of its power from the downstream link

Internet manufacturing

Figure 1: "production and marketing" collaborative upgrade

Manufacturing Internet is the "production - sales - consumption" collaborative upgrade in the ring, the transformation of power from the downstream circulation and consumption side. The higher the degree of upstream Internet (online, data) the higher the degree of upstream manufacturing links forcing the more significant role. At present, the retail industry, the retail industry, the highest degree of the conservative estimate of more than 50%.

So, we see the book manufacturing links - "printing and publishing" link has a high degree of Internet, digital publishing, digital distribution is very popular. Textile and clothing is another retail industry, a high degree of Internet industry, the industry is estimated at more than 30%, which means that every 100 per 100 pieces of clothing is sold on the Internet.

It is conceivable that its production of upstream production has produced much of the force. So, we see in the garment factory inside, flexible production accelerated, shorten the production cycle, production methods and equipment have changed. For a large number of industrial manufacturing enterprises, the downstream is the B class of customers, such enterprises need more Internet demand from the collaboration between enterprises, but the power is still from the downstream customers.

For example, the current intelligent equipment and intelligent products, the sensor embedded in the product, sold to customers can continue to collect data uploaded to the cloud. But you can see that only when the customer has such a demand and willing to share the data, the manufacturing side have such a driving force.

2, "smile curve" misleading the Chinese manufacturing industry

In 1992, Taiwanese entrepreneur Shi Zhenrong put forward the "Smile Curve" theory. Smile curve that the curve on both sides of the additional value of high, large profit margins; and in the middle of the curve at the bottom of the arc processing, assembly, manufacturing, technical content is not high, low added value, low profits. Chinese industry on the "smile curve" as a classic and therefore into a loss. Under the guidance of this idea, the direction of China's manufacturing transformation and upgrading must be extended to the so-called high-end value chain, in particular, take the road of branding. And for the retail market and brand road is "defeated Jiucheng" strategy, the risk is great, not applicable to all manufacturing enterprises.

Internet manufacturing

Internet manufacturing

Figure 2: Smile curve VS Musashi curve


In fact, the manufacturing industry is not so pessimistic, theory and practice there is the opposite of the smile curve. In 2004, the director of the Nakamura Research Institute in Japan, in the middle of the village, put forward the "Musashi Curve", which is the opposite of the smiling curve - the real most profitable source of profits is "manufacturing".

In June 2005, Japan's "2004 manufacturing white paper" through the survey of nearly 400 manufacturing enterprises also verified that the "manufacturing & assembly" the highest profit margins of the enterprise is very much. The reason why China's manufacturing industry was confused by the smile curve, the root cause of the poor management of China's manufacturing industry.

Nearly 20 years, China's manufacturing industry in the WTO foreign trade dividends and government-led investment-driven growth model, profit easily, while doing real estate, financial too easy to make money, business owners generally do not want to invest in the manufacturing sector.

China's manufacturing industry for 30 years not only did not give any ideas to the world, but even IE (Industrial Engineering), TPS (Toyota Production System), 6 Sigma and other mature manufacturing management theory is also rarely used. All this leads to "manufacturing" should be far from the profits reflected.

3, the direction of manufacturing transformation is simply "manufacturing" to "supply chain collaboration"

Manufacturing industry in the transformation of the Internet, C2M model needs to have retail genes and branding the slow effort, not all enterprises have this ability. We believe that the manufacturing industry is more practical transformation of the road is to do the supply chain services. But what is the supply chain? Many people are talking, but it seems to have their own. Give a simple example to illustrate the difference between "simple manufacturing" and "supply chain synergy".

A clothing factory in June 1 received a brand orders, the production of AB two styles of the 1000 clothes, requiring July 1 delivery before. The factory buried hard, the quality and quantity to produce clothes, in July 1 before the goods issued, called manufacturing.

The "supply chain coordination" approach is that the factory in the production process to understand the brand where: A style selling, in mid-June has been lower than the minimum safety stock, and soon out of stock; and B-style slow-moving, there are Large inventory. Then the factory should speed up the production and delivery of A style, and delay the production of B style or even reduce the amount of orders, which is "supply chain collaboration" approach.

Internet manufacturing


Whether it is consumer goods or industrial products manufacturing, as long as the 2B business, you can use this model. The long-term value of manufacturing is to help your downstream customers make money. In the absence of the Internet, some excellent companies have been in this area for an excellent exploration, such as Cisco, Wal-Mart, Toyota, Dell, Huawei and so on. The Internet as a wide range of connectivity tools, can be more low-cost supply chain upstream and downstream links, through data collaboration to achieve a wider range of supply chain collaboration.

4, the basis of supply chain collaboration is: to get through the big business data, ERP, MES system, to achieve vertical integration

To achieve supply chain collaboration, the need to achieve all aspects of the value chain data sharing and strategy. In the manufacturing side, the first need to open up the gap between ERP and MES, to achieve internal coordination. ERP is the enterprise level resource planning management; MES is located in the upper plan management system and the bottom of the industrial control between the workshop for the management information system.

ERP plans to generate executable production work orders, while MES tracks the execution of work orders and prevents errors. Its management range from production to shipping. Unfortunately, most of the manufacturing plant ERP and MES are two systems, fragmented. Production capacity, order progress and production inventory for ERP is only black box operations.

Internet manufacturing

Figure 4: Three-tier enterprise integration model

If the enterprise can achieve ERP, MES, and even integrated CRM collaboration, and further need to dock the big business data, including real-time order data, demand forecast data, this part of the data may belong to different partners. At this time the partners of the synergy, information level, data interface standards, and even the incentive mechanism is essential.

When all the systems in the industry chain are fully integrated, a real-time collaborative supply chain is formed by connecting the end-users of the market, the internal departments of the manufacturing industry and the upstream and downstream parties. The Collaborative Planning Forecasting and Replenishment - Collaborative Planning, Forecasting, and Replenishment System (CPFA).

In the past, only large enterprises can achieve this, because of the huge IT and talent involved, but now the Internet appears, it is possible to change this pattern, small businesses can do, and can play more extreme.

Because the internal system integration through the Ethernet (LAN) to complete, and cross-enterprise collaboration between the Internet is playing an important role. In particular, after the emergence of electricity providers, based on the wealth of data transactions, real-time and predictive accuracy, far from a single dimension of POS information can be compared to the daily. We also look forward to 2B in the electricity business platform, as soon as possible to see the platform-level supply chain collaboration system.

5, flexible production will become the core competitiveness of manufacturing

Professor Tang Min, director of the State Council, said: China's future, to mass production, low-cost win over labor-intensive industries moved to Southeast Asia unstoppable, the only thing left in China is the small batch, custom flexible manufacturing capacity. Another way to understand this sentence, if China can be a large-scale transformation of the manufacturing system, so that they have a flexible production capacity, then you can put more manufacturing industry to retain China.

The so-called flexible production refers to the quality, delivery, cost consistent with the conditions, the production line in mass production and small batch production between the arbitrary switch. Industry talk more about "mass customization" is only a form of flexible production, not a generic model.

At the same time, the so-called "small fast" (small batch, multi-category, rapid production) is not really flexible, because large quantities of orders can not do is not really flexible production. At present, the emerging "smart manufacturing", we believe that the application of IOT technology to achieve flexible production or custom production, on the whole also belong to this category.

Flexible production has become the core competitiveness of manufacturing enterprises, combined with the previous third "supply chain coordination" is not difficult to understand. "Supply chain coordination" requires the production capacity of manufacturing enterprises in accordance with the actual needs of the market changes in elastic release: sell well, demand more to produce more; sell well, less demand less production. Manufacturing flexibility is not enough, means that your customers will be bad luck, or need to purchase large quantities of funds, or to endure the risk of out of stock cut.

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