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Facing industry 4.0, Chinese manufacturing enterprises need to customize the development roadmap

Time:2016-09-04
After the State Council issued the "made in China 2025" action plan and put forward a series of goals in 2015, the transformation of China's manufacturing industry is attracting worldwide attention. According to statistics, more than 1000 domestic private equity funds and venture capitalists have set foot in the field of industry 4.0. Chinese manufacturing giants are trying to provide sponsorship and investment for local technology suppliers or value chain participants to obtain more integration opportunities. The central and local governments are also investing heavily in industry 4.0 projects.

In a report entitled "the era of industry 4.0: how digital transformation can achieve the upgrading of China's manufacturing industry", McKinsey, a global management consulting firm, surveyed 130 enterprise representatives from various industries and found that nearly 80% of the interviewed Chinese manufacturing enterprises expected industry 4.0 to improve their competitiveness. In contrast, only 57%, 50% and 54% of the manufacturing enterprises in the United States, Germany and Japan had similar expectations.

Although Chinese manufacturing enterprises have great enthusiasm and expectations for Industry 4.0, only 57% of Chinese enterprises believe that they are ready for Industry 4.0, lower than American enterprises (71%) and German enterprises (68%).

Digitalization is not just about installing and using automated equipment. Enterprise management structure, concept and ability, digital operation, and cooperation with government, consulting, investors and research institutions are also the focus of digital transformation.

At present, the lack of a clear division of responsibilities and a systematic implementation path for the digital transformation scheme is the biggest obstacle for manufacturing enterprises in the digital transformation. "Only 9% of Chinese enterprises think they have a clear distribution of responsibilities, and 6% have a clear road map. The United States, Japan and Germany have done better than Chinese enterprises in these two points." Wang Ping, global managing partner of McKinsey and head of China's advanced industry consulting business, introduced at the report press conference.

According to the McKinsey report, at present, less than 5% of Chinese enterprises can independently develop and implement digital technology solutions. Such enterprises represented by Huawei and Haier have also become the leaders of industry 4.0 in their respective industries. While more than half of the manufacturers have achieved semi automation by configuring automation equipment, they still lack the ability of digital management. The remaining 34% of enterprises are still in the initial stage of relying heavily on human labor.

Taking the development of the machine tool industry as an example, as the world's largest machine tool producer and consumer, although Chinese machine tool enterprises, with the support of the state, have accelerated the research and development of key functional components for medium and high-end machine tools and achieved certain results. For example, the first domestic full servo high-speed automatic stamping line independently developed by Jinan No. 2 machine tool has reached the world leading level in stamping technology. However, Chinese machine tool enterprises are more concentrated in the middle and low-end market, while the high-end machine tool market is still dominated by traditional machine tool enterprises in Germany, Japan and the United States.

"The demand upgrading direction of the machine tool industry is completely opposite to the long-term inherent advantages of China's machine tool manufacturing industry." Chenhuiren, executive vice president and Secretary General of China Machine Tool Industry Association, previously said, "what China's machine tool industry lacks is not face, but depth."

What Chinese enterprises need is not a "panacea" industrial 4.0 solution, but a tailored roadmap, including digital lean transformation to optimize energy consumption and automation, efficient and high-quality digital business models, innovative product and business model development, and consumer demand-oriented business strategies. The report predicts that these opportunities may increase China's manufacturing capacity growth to 6.5% in the next 15 years.

In addition, the report also mentioned that manufacturing enterprises should pay attention to the excessive enthusiasm of industry 4.0, which may lead to irrational investment in equipment and tools and waste of resources.