“New Manufacturing” Promotes Business Upgrading of Traditional Companies
During Spring Festival, the Zhangqiu hand-made iron pan was first highlighted in the third season of the documentary “A Bit of China”. Within four days, its flagship online store had witnessed a 6,000 times increase in sales. The overwhelming popularity of the iron pan led to shortage of supply and the business suppliers had to made a declaration that consumers shall be reasonable in consumption whiling respecting the traditional art.
The example highlights a new popular phrase — “new manufacturing”.
Gain advantage via big data
The emergence of new concepts like big data, cloud computing, the Internet of things and mobile internet is alleviating the predicament of traditional manufacturing companies. The innovation is bold and the products have more recognizable features.
Insiders of the industry pointed out that the big data of the service industry will provide more tailored design, manufacturing and production services for traditional manufactur- ers, making the industry smarter and smarter. Meanwhile, the intermingling between big data and traditional manufacturing industry will produce new productive service industry and promote the industry upgrading.
According to 2017 China Electronics and Electrical Appliance Industry Report released by GFK, in 2017 Chinese electrical appliance brands are making progress through “made in internet”. The new types of products, like dish-washing machine, sweeping machine, bladeless fan, mimi washing machine, embedded micro steam roasting machine and high electric cooker have become driving forces of the growth of Chinese electrical appliance. It is estimated that in 2017 the top 5 electrical appliance products sold on Tmall platform include air-conditioner, mobile phone, LED television, kitchen appliance and refrigerator. These five products take an overarching position with the share of sales surpassing 50%.
The person responsible for Haier’s e-commerce business said that by way of Tmall’s big data technology, Haier has found that consumers have pain point when washing curtains and bedding products and large-capacity washing machine has large market potential. Haier decided to grasp this opportunity by promoting 10-kg frequency-conversion and rolling washing machine, which became a hit of the market. Similar stories happened to the dish washing machine of Midea. By the end of December 2017, Midea, Haier and Xiaomi have witnessed their sales surpassing RMB 1 billion on Tmall platform.
“The new retail of China’s electrical appliance is not about selling well, but manufacturing good products.” Yin Jing, president of Home Appliance Department of Tmall, said that Tmall’s big data has become new production materials of the home appliance manufacturing industry. It is up to consumers to decide what to produce by enterprises, which will translate into an efficient and intensively-operating C2B model.
Yin Jing mentioned that in 2018 Tmall will work with famous brands to establish a new brand innovation center and IOT group to breed new product varieties, to make Chinese products smarter, more personalized and tai-
lored. Also, Tmall will promote “China Craftsman” plan online and combine with offline platforms like Suning and Rt-mart, to promote the growth of Chinese produce.
Traditional companies need smart rennovations
Zhang Xinghai, chairman of Chongqing Sokon Industry Group, said that the smart era of big data has arrived and smart renovations of traditional industries and enterprises are quite urgent. But some companies still face difficulties in industry transition and upgrading, especially in terms of capital.
Sokon Industry Group is a private company focusing on the manufacturing and sales of whole vehicle, vehicle engine and components, with a total revenue of more than RMB 10 billion. Zhang Xinghai deeply felt the urgent needs for the upgrading of the manufacturing industry. He said that Chongqing is a big city of traditional manufacturing industry. Since 1980s, Chongqing has witnessed the emergence of a batch of state-owned and private manufacturing companies involved in the production of motors and military supplies. Chongqing ranks top in terms of manufacturing of whole vehicle and components, with Jialing Motor and Changan Vehicle as the best example. “However, as the era of big data arrives, the traditional industries will fall behind if there are no industry transition in place.”
In fact, the big data technology is expanding the sales channels of traditional manufacturing industries. Shenzhen Keteng Co. Ltd. is a smart vehicular experience company that operates Tencent’s robot smart products. Its Chengge brand has been seen on the Didi car-hailing platform of Hangzhou.
The founder of Keteng Zheng Chongjian said that the Chengge brand will utilize big data technology to promote and optimize the sharing economy, to connect car passengers with their tailored needs. The GPS positioning and other personalized vehicular data will be used to combine consumers with their real live experiences, to make their vehicular experiences more colorful.
Zheng Chongjian said that as a vehicular service company, its services like music systems and online sales platforms would be impossible without the support of a large number of manufacturing companies. He said that big data is the basis of smart manufacturing and its manufacturing process includes data collection and management, order management, smart manufacturing and customized platform. The core of the process is customized platform.
Guizhou Orient Steel Market, which has been crowded with buyers and sellers, now sees few visitors because of the big data technology. But its business is expanding. The company’s vice president Han Xun said that as Guizhou’s largest steel transaction market, the company has controlled a complete set of transaction data. It uses “bulk commodity transaction platform”, which includes e- commerce, storage and logistics platforms, to clearly display information about transaction, payment, bill, transaction price and volume. He said that in the era of big data, all these data is a gold mine for the steel market.
Tailored manufacturing as a new trend
Nowadays both small commodities like cups and T-shirts and sophisticated products like cellphone and electrical appliance need design. In that sense everyone is a designer.
Consumers are free to choose their preferred products. You may lie on bed and use a tablet computer to click on products you like, and the manufacturers will produce the products tailored to your needs. This is a typical hallmark of new manufacturing.
Consumers want to spend less and achieve more personalized and high-quality products. This has posted a lot of new challenges for the industry. “Companies shall use the big data technology to upgrade their business, improve the data transparency of the production process to better satisfy consumers’ demands.” Sun Ronglei, professor of Huazhong University of Science and Technology, said that the tailored and personalized production will become the trend of the manufacturing industry.
According to experts, during the era of new manufacturing, the products are facing shorter life cycle and increasing diversity. This requires companies to be more adaptable to the changing consumption needs. “To promote tailored manufacturing will deeply affect the whole industry. Those who follow the trend will survive and those who don’t will be wiped out.” Sun Ronglei warns that the companies, the whole manufacturing industry shall deeply understand the new trend and features of the manufacturing industry. They shall put more investment into research and development, analyze consumers’ needs and pain points, to seek the best solutions to such pain points. Meanwhile, manufacturing companies shall be more open in sharing experiences, especially promoting integration between companies and universities or research institutions. The purpose is to achieve complementary advantages and produce more products.
The 2018 Report on the Work of Government mentioned that it shall use new technology, new types of business and new business model to transform and upgrade traditional industries. In the new round of competitions, those pioneers of innovation will accumulate advantages. The development of informational and smart technology will create more opportunities for the industry upgrading and transition.
The emergence of new concepts like big data, cloud computing, Internet of things and mobile internet is alleviating the predicament of traditional manufacturing companies.