How Digital Technology is Driving the Evolution of Manufacturing in China Through Specialization and Enterprise Transformation
Add an evolution mechanism to entity crafting
The Kennedy School of Government at Harvard University in the United States released a report entitled “The Great Technological Competition: The Contest between China and the United States in the 21st Century” in December 2021. It analyzed the technological competition between the two countries in the past 20 years and made predictions for the future. predict.
Because the topic is important, and the first author of the report, Harvard University professor Graham Allison is the famous author of “Destined for War: Can China and the United States Avoid Thucydides’ Trap?” “The author of the book, so the report has had a wide impact in both China and the United States and even the global economic circles.
In the past 20 years, China’s economy has been getting closer and closer to the United States, regardless of the volume or quality, and it is getting closer and closer. This was completely beyond the expectations of the United States.
Twenty years ago, TIME magazine asserted in its special issue “Beyond 2000” that “China cannot grow into an industrial giant in the 21st century. Its population is too large and its GDP is too small.” At that time, China’s per capita income was about the same as Guyana’s Roughly the same as the Philippines. William Kirby, director of the Fairbank Center for China Studies at Harvard University, wrote in the Harvard Business Review that many people in the dominant school of thought at the time believed that “China is largely a rigid, rote country.” , can only imitate, not innovate.
However, “by 2010, this situation began to change, and China had grown into a low-cost manufacturing base for multinational companies and was becoming a manufacturing factory for global mass-market goods.” The report reads, “Today, China is rapidly rising, challenging The dominant position of the United States in the commanding heights of technology has attracted the attention of the United States. Technological competition is the “main venue for competition and confrontation with China” emphasized by William Burns, Director of the CIA. China has replaced the United States to become the world’s largest High-tech manufacturers, producing 250 million computers, 25 million cars and 1.5 billion smartphones in 2020.” The
report concluded and predicted: “In addition to becoming a manufacturing powerhouse, China has become a player in the basic technology field of the 21st century. Important competitors: artificial intelligence, 5G, quantum information science, semiconductors, biotechnology and green energy. In competition in some fields, China has become the number one. In competition in other fields, according to the current development trajectory, China will surpass the United States in the next 10 years.”
In the past 20 years, why has China’s manufacturing industry undergone such profound changes, greatly enhancing its global competitiveness?
There are many answers. When I was reading “The Great Technological Competition: The Contest between China and the United States in the 21st Century”, I thought of an answer from a technological perspective: In the past 20 years, the inclusive development of digital technology has brought an evolutionary mechanism to China’s physical manufacturing. To enable it to respond quickly and sensitively to the needs of the world’s most complex and dynamically changing consumers. Driven by consumers and under the pressure of competition, although Made in China was not strong at the beginning, it has made rapid progress and iterative evolution, becoming stronger and stronger.
There is another side to the answer: China’s physical manufacturing scale, complete categories, complete supporting facilities, fierce competition, and dividends for workers and engineers provide the richest scenarios for the application of digital technology. Digital technology can be used in C2M (customer-direct manufacturing) responsive R&D, intelligent manufacturing, flexible supply chain, digitization of people and organizations and business processes, real-time management of machines, equipment and operations, smart logistics and inventory optimization, precision marketing and services play a role in all aspects.
When I communicated with Ye Jun, CEO of DingTalk, he said: “DingTalk did not focus on the manufacturing industry at the beginning. It mainly focused on government affairs and education. It was the manufacturing industry’s demand for digital technology that drove our development. It is the manufacturing industry that drives our development. Enterprises have taught DingTalk how to do manufacturing.”
In Ye Jun’s view, digital technology and manufacturing are a two-way process of achievement. “In the past few years, I have received opinions and suggestions from various manufacturing customers every day. For example, I hope that any equipment failure can be automatically notified to people, so that the system can do the errands for people; for example, I hope that production, inventory, sales, financial and other operating data can be presented in real time. , data at the same frequency; for example, we hope that piecework work will be ‘cleared and settled monthly’ to replace traditional document entry. It is during this process that DingTalk continues to evolve and create a flexible and scalable industry base exclusive to the manufacturing industry, providing a platform for the advancement of the industry. It provides basic capabilities in , sales, storage, and production links, as well as product capabilities such as equipment mounting and industry connectors, and cooperates with ecological partners to build rich industry applications for the manufacturing industry.” Ye Jun said: “Digital technology must serve
entities Economy, the digital economy is the real economy.”
This sentence made me start thinking, what is the real economy today? In the past, everyone thought that the production of a specific product was called the real economy, but with the development of the global economy in the past few decades, do the most valuable companies in the world, such as Microsoft, Google, and Amazon, have any weight? And no weight. How much does DingTalk weigh? I don’t know, but it has served 500 million users and nearly 20 million business organizations. Is its value virtual? Actually not.
In the words of Li Peigen, an academician of the Chinese Academy of Engineering: “The most important part of the digital economy is the real industry, so in this sense, the digital economy is actually not empty at all.” As early as September 2021 at the Wuzhen Summit of the World Internet Conference,
Ali Zhang Jianfeng, President of Cloud Intelligence, once said that digital technology should be used to serve the real economy in a down-to-earth manner. Since 2020, DingTalk and Alibaba Cloud have completed the integration of “cloud and nail integration”. Alibaba Cloud’s customers are mainly large enterprises, with comprehensive customer service; responsiveness. After the “integration of cloud and nails”, a more complete and comprehensive digital service capability has been formed.
In China, it is precisely because of the co-evolutionary mechanism of digital technology and physical manufacturing that it has promoted a great digital productivity revolution—it has not only promoted the upgrading of Chinese manufacturing, from manufacturing to quality manufacturing to intelligent manufacturing; it has also promoted digital manufacturing. The application and development of technology itself, from informatization to digitization to intelligence. The two are interdependent, promote each other, drive each other, keep evolving, and have a variety of phenomena.
Today, human society is entering a new stage of rapid rise of digital productivity, and China has made data a key factor of production. Digital technology is not virtual or illusory, but a real driving force to promote the development of productivity. It is embedded in every link of physical manufacturing and is itself a key element of physical manufacturing competitiveness.
Added a new smart engine for specialization
Where will Made in China go next? An important direction is specialization, specialization, that is, small and medium-sized enterprises with specialization, refinement, specialization and innovative characteristics.
In December 2021, the Ministry of Industry and Information Technology and other departments released the “14th Five-Year Plan to Promote the Development of Small and Medium-sized Enterprises”, proposing to promote the formation of 1 million innovative small and medium-sized enterprises, 100,000 specialized and special new small and medium-sized enterprises, and 10,000 specialized and special new small and medium-sized enterprises. “Little Giant” enterprise.
In my opinion, specialization, specialization and innovation are not only a requirement for small and medium-sized enterprises, but also a requirement for the entire Chinese manufacturing industry, that is, from a quantitative, extensive, and extended expansion of “big” to a quality-oriented, intensive, and innovation-driven one. On the basis of “good”, we should pursue “big”.
More than half of the “little giant” companies that specialize in new technologies use DingTalk, which shows that the more companies follow the path of specializing in new technologies, the better they are at using digital productivity tools, in-depth digital innovation in business scenarios, building intelligent engines, and using digital , Digital intelligence empowers itself.
Wuxi Putian Iron Core Company, established in 2004, focuses on manufacturing, R&D and sales of power transformer cores and grain-oriented electrical steel. It is a Jiangsu provincial-level specialized and new “little giant” enterprise. The core of the high-speed rail transformers used in the cross-border railways in China and Laos that can reach speeds of 200 kilometers per hour comes from this company.
The order-based production in the manufacturing industry emphasizes that no problems can occur in every process, otherwise it will cause material waste. In the past, the production process was all based on experience, and the biggest technical difficulty of Putian core products is to reduce energy consumption. The lower the energy consumption, the higher the product price, and the measurement of different energy consumption needs to be accurate to one ten-thousandth. In 2019, Putian Tiexin began to introduce DingTalk, using DingTalk as the entrance, to realize business and equipment nailing, and developed an “intelligent collaboration” application to bring the three important production links online, so that employees can You can see the production status of each process on the mobile phone. If there is any abnormality, you can directly operate it through your mobile phone to terminate the next process. The online monitoring of this production line process increased the yield rate by 8%.
Putian Tiexin has also developed an equipment management function. All equipment repairs, maintenance, and replacement of spare parts can be performed on DingTalk. If there is a fault with the equipment, the relevant person in charge will be notified through the DingTalk robot to ensure that the faulty machine is repaired in a timely manner. Moreover, every maintenance and replacement of spare parts will be collected into equipment data, and the failure cost of each machine will be automatically calculated, which will become the basis for future purchases. Equipment monitoring, early warning and one-click repair based on DingTalk have reduced equipment maintenance costs by 80%.
Wu Weiwei, deputy general manager of Putian Tiexin, said that workers in future factories will be “new workers in the digital age” who can use automated equipment.
Hangzhou Hongtu Metal Manufacturing Co., Ltd. mainly produces general-purpose reducers, such as vehicle reducers and marine reducers. Four or five years ago, such products were mainly imported brands, such as Siemens, and now they are gradually localized. The key technical indicator of the general reducer is mechanical efficiency, which is related to the accuracy of the parts. The higher the accuracy, the smaller the loss. In order to achieve lean manufacturing, Hongtu Company has used “manufacturing on code” on DingTalk to help enterprises solve the problem of progress through the two-dimensional codes of four production links, including production codes, warehouse location codes, work report codes, and material codes. (purchasing), sales (sales), storage (warehousing), and production link data at the same frequency. After transforming the traditional production process with QR codes, Hongtu’s delivery cycle was shortened from 35 days to 7 days.
Ye Zhangchao, general manager of Hongtu Company, said: “We have tasted the sweetness of using digitalization to drive lean production management. In the past, customers gave us a purchase order for the next month at the end of each month; now, we use DingTalk to integrate our system The collected data is directly provided to the customer, so that the customer knows how much production and inventory he has with us. Even when we produce his order, he knows exactly which process a certain product is in the production process. In this way, it is very accurate from order to production, and there will be no waste.”
On the road of Chinese enterprises to specialization and innovation, whether it is equipment sharing, capacity docking, production collaboration, man-machine interconnection, or order-driven production process Flexibility, as well as the construction of intelligent production lines, intelligent workshops and intelligent factories, to achieve lean production, agile manufacturing, fine management and intelligent decision-making, and even to form networked collaboration, personalized customization, and service-oriented extension in the entire upstream and downstream ecology. Digital technology not only Indispensable and will play a major role in value innovation.
Find a new way for the digital transformation of small and medium-sized enterprises
I have been paying attention to the digitalization and digital intelligence process of Chinese enterprises. During my research, I found that many emerging digital native enterprises in China (such as smart electric vehicles and new consumer leaders) have established their own IT and data teams to integrate all aspects of the enterprise. It was built on a cloud-native architecture from the beginning, and adopted an attitude of “deep involvement and customized redevelopment” for general software. In the process of digital transformation, traditional large enterprises generally adopt the “outsourcing + cooperation” collaboration method, and have made great strides in intelligent quality inspection, intelligent supply chain, intelligent logistics, and intelligent scheduling of corporate resources.
The problem is that the majority of small and medium-sized enterprises, especially small and micro enterprises, still have many concerns about digital transformation. They are very cost-sensitive and care about the input-output ratio. They are worried that “spending money will have no effect” and “may kill themselves if they are too forward-thinking.” Therefore, digital applications are still relatively limited, including online sales, webcasting, and Office automation, online conferencing, and more.
For the digital transformation of small and medium-sized enterprises, is there a new way that is visible, tangible, low-threshold, and effective?
Ye Jun’s answer is very simple: “You can say yes, you can also say no. No, because digital technology requires investment. It can be regarded as a kind of soft equipment. Hard equipment requires investment, and soft equipment also requires investment. Don’t want to It is unrealistic to invest money and hope that it will turn stone into gold. There is a story in “Historical Records”. There is a big bird in the country. It has stopped in the king’s court. It has not been flying or singing for three years. The king said: This bird will not fly. It soars into the sky; it is nothing but a blockbuster. Digital transformation is also like this. The initial investment will not be so immediate, but if you persist, the rewards will be great.” The core of digital transformation is the re-engineering of productivity
and the reconstruction of production relations . . Not only hardware, software, IT platforms, etc., but also the improvement of its own organizational structure, business process reorganization, and personnel digital capabilities. Therefore, digital transformation cannot be completed overnight. It must require the vision and courage of the company’s top leaders to succeed. At the same time, you must start with small pain points and incisions, gain confidence from changes, and then proceed step by step. It is most taboo to start with a big stall.
Can digitization be bought? An Xiaopeng, deputy director of Alibaba Research Institute, who has long studied intelligent manufacturing, often raises this question.
His point of view is: There are two different paths to digitalization, one is “bought digitalization”. We can buy robots, CNC machine tools, customer relationship management systems, manufacturing execution systems, and all kinds of software. The other is “digitalization that cannot be bought”. Informatization led by innovation cannot be bought. You can buy equipment but not technology; you can buy software but not data; you can buy consulting but not core competitiveness. In other words, whatever you can buy, your competitors can buy.
China has its own national conditions and characteristics. The digitalization of Chinese enterprises does not need to copy the “software-defined everything” experience of European and American countries. China does not have such mature capabilities, resources and talents, and the information foundation of enterprises is relatively weak. However, China has a strong Internet infrastructure and has established mature capabilities in many areas (such as instant messaging, audio and video, project management, and collaborative work), so it can use a lower-cost and more efficient method to help A large number of enterprises are taking a new path of digital transformation – first use the Internet platform to quickly acquire digital capabilities, and at the same time, based on the needs of the organization and business, practice digital internal skills hard to form a platform (Platform), professional service providers (SaaS) and corporate co-creation A new win-win situation.
Ye Jun said: “DingTalk is a basic platform, and it is also an open platform. DingTalk has vigorously promoted the development of low-code development tools in the past two years, which is to fully consider the actual situation of the enterprise, so that business personnel who do not understand code can also use it based on business needs. , develop independently in a drag-and-drop manner, and digitize the work around you.”
Today’s digital transformation of enterprises, either completely outsourced or completely self-developed, may be extreme in the eyes of the practical school. Some companies are strong and their core capabilities are data-driven, so they must have self-built digital capabilities. But for the vast majority of enterprises, especially small and medium-sized enterprises, they can upgrade through the ecology and existing digital software products in the society, so there is no need to build them themselves. The parts that need to be customized can be built by people who understand the business through low-code methods.
Small and medium-sized enterprises are the foundation of China’s economy, and specializing in new data/intelligence is the direction of small and medium-sized enterprises. As the largest digital intelligence platform serving enterprises, DingTalk has built a complete set of solutions of “low code + tool platform”, based on more than 2000 API interfaces, more than 30 scene capability packages, and more than 190 data Item open nailing eco-base. Based on this ecological foundation, there are currently more than 900,000 industry developers and ecological developers on DingTalk, and nearly 1.5 million SaaS applications have been developed. Feedback from the needs of tens of millions of enterprise users has nourished the foundation of DingTalk.
This cycle that DingTalk strives to build is also a new cycle for the continuous development of China’s digital productivity.
Add an evolutionary mechanism for physical manufacturing, add an intelligent engine for specialization, and find a new way for the digital transformation of small and medium-sized enterprises. This is what I see as DingTalk.
Ye Jun said: “We still have a long way to go, but the direction is clear, which is to provide low-code development tools for enterprises to quickly build their own personalized applications, so that enterprises can quickly obtain A more suitable productivity tool.”
Through the words of this man of science and technology, and through Dingding’s digital productivity practice, I see that digital transformation is not “arming technology to the teeth”, the more money spent, the better, but It is to integrate technology into the genes of the enterprise, thus starting a never-ending journey of capability evolution.
DingTalk’s “platform + low-code development” has explored a new way for the real economy to develop upward, forward, mid-to-high end, and deep for the digital transformation of today’s small and medium-sized enterprises and even large enterprises.
This road can also be called the Chinese road of digital renaissance. Along with this road, an era of technology-based practicality has arrived.
