Digital transformation ushers in new future for China’s manufacturing

By Shi Ling, People’s Daily

An employee of an e-commerce enterprise in Handan, north China’s Hebei province sells products on a livestream show, Nov. 4. Photo by Hao Qunying, People’s Daily Online

As Chinese people’s living quality continues to rise over recent years, commodities of higher quality are becoming increasingly favored, and tourism and entertainment are also taking a higher proportion in consumers’ expenditure.

Such consumption upgrade is a result of the mutual promotion between the demand and supply sides. Apart from robust domestic demand, the upgrading of manufacturing also contributed an important part to it. More and more enterprises are coming to realize that as digital technologies are bringing huge changes to consumption, they must digitalize themselves as soon as possible to better meet the new demands of consumers.

Machines in factories across China are now incredibly occupied as the country enters the “Double 11” shopping festival, the country’s biggest e-commerce gala. The positive impacts of e-commerce on production are perfectly shown as more and more enterprises are resorting to customized production.

By applying a smart dispatching and scheduling system, a garment manufacturer in the country is now able to plan its production based on its sales. Its minimum order quantity has been reduced from 1,000 to 100, while the lead time is shortened by over half from 15 to 7 days. Some home appliance manufacturers also completed such transition, customizing products such as dish washers and vacuum robots based on the demands of consumers.

Behind China’s huge consumption are highly complicated and coordinated operating systems, as well as the support mechanism formed by the integrated development of payment and logistics industries. Thanks to the wide application of new-generation digital technologies such as big data, cloud computing and artificial intelligence, digital economy is gradually consolidating its foundation, constantly gathering the momentum for the transformation of the manufacturing sector.

Digital technologies are becoming an important force driving the transition of traditional manufacturing, from the “digital brains” that intelligently dig into the data of production, supply, sales, human resource, finance and materials, to the tracing systems established on the Internet of Things (IoT) that monitor processing, storage and logistics in real time.

At a critical stage when the consumption internet integrates into the industrial internet, digital technologies are bound to create advantages for the manufacturing sector as long as enterprises can do better in market analysis, optimize production decisions and reorganize production procedures.

By optimizing industrial chain and expanding the scope of manufacturing, digital technologies are an important approach for China’s manufacturing upgrading. Just as the “Double 11” is testing the response and matching accuracy of China’s industrial chain, the country’s manufacturing upgrading is also examining digital technologies’ capacity of continuous innovation. Only by constantly enhancing research and application and improving computing power and algorithm can digital technologies better facilitate “made in China” and “intelligent manufacturing in China”.

China’s government work report this year proposed to enhance the building of new infrastructure, and the purpose is to promote the transformation and upgrading of manufacturing technologies, so as to consolidate the foundation for China’s high-quality economic development.

During the 13th Five Year Plan (2016-2020) period, digital economy contributed over 60 percent to China’s GDP growth, and the integration of industrialization and informatization was also accelerating. Facing the next five years, China will continue to improve the integration of digital high tech and the manufacturing sector, lead the digitalization of industries by expanding new consumption, and step up efforts to intelligentize traditional manufacturing.