Manufacturing embraces digital transformation
April 6, 2021 Category Macro-economy, Weekly
China will promote the deep integration of digital technology and the real economy, and empower the transformation and upgrading of traditional industries, so as to spur economic growth. Hailed as the “world’s factory,” south China’s Guangdong province is home to nearly 3 million industrial companies. Now the manufacturing hub is accelerating its digital transformation, exploring paths for the upgrading of its manufacturing industry. On a giant digital screen that simulates the factory’s digital operation in a microwave oven factory of Midea Group in Foshan city, red alarms flash to alert engineers to any problems with production equipment.The factory is one of the largest microwave oven production bases in the world, with an annual production capacity of over 44 million units. About 47% of the world’s magnetrons are produced here, making it a major component supplier for global microwave oven manufacturers. In March, the World Economic Forum listed the factory among the latest members of its Global Lighthouse Network, which selects plants leading the way in the adoption and integration of frontier technologies of the Fourth Industrial Revolution.
Zhou Xiaoling, Director of Information Technology at Midea Group, said thanks to digitalization, the factory has increased its overall internal efficiency by 28%, improved product quality indicators by 15%, and shortened order delivery time by 53%. “Midea started its digital transformation in 2012. Corporate revenue increased by CNY150 billion while the number of staff fell by 40,000 from 2012 to 2019,” Zhou said, adding that “digital transformation has injected strong development momentum into the traditional manufacturing sector.”
In Guangdong, a total of 15,000 firms have achieved digital transformation and 500,000 companies have gained access to cloud services, thanks to industrial internet platforms, according to the province’s Department of Industry and Information Technology. In recent years, companies such as Huawei, Midea, Tencent and Rootcloud have grown rapidly and helped promote the transformation of a large number of small and medium-sized enterprises (SMEs). According to Xu Zhijun, rotating Chairman of Huawei, by the end of 2020, the company had built more than 40 industrial internet innovation centers in China, providing digital transformation services for more than 20,000 enterprises in over 30 industrial clusters.
He Dongdong, CEO of Rootcloud, an industrial internet service provider headquartered in Guangzhou, said by working with other leading companies in the industry, Rootcloud has created more than 20 industry cloud platforms concerning construction machinery, environmental protection, textiles and home furnishings. It is now providing digital transformation services for companies in 81 industrial sub-sectors. “Digitalization marks a big leap for the traditional manufacturing industry. Since 2016, our business volume has been growing by 100% each year, which shows a strong demand for digital transfor?mation in the manufacturing industry,” He said.
But Ge Changwei, Director of the Guangdong Provincial Development and Reform Commission, said that more progress is required as only one-sixth of the nearly 3 million industrial enterprises in Guangdong have access to cloud services. Tu Gaokun, Director of the Guangdong Department of Industry and Information Technology, said that in the next step, Guangdong will launch technological research projects and demonstration applications in the fields of industrial software, artificial intelligence and intelligent manufacturing, and strive to provide more support for the digital transformation of the manufacturing industry, the Shanghai Daily reports.
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