On August 17, Jack Ma said at the World Zhejiang Business Summit that the manufacturing industry will suffer a huge impact, no less than the Internet impact faced by the traditional retail industry.
The new manufacturing prescriptions he prescribes are “C2B”, “personalized customization”, and “flexible customization”.
The future is really so clear?
Look at the custom umbrellas industry. In February of this year, Jinjiang, the “Umbrella Capital of China”, successfully developed automated equipment for assembling umbrella poles (medium rods) and entered the trial phase, which was praised as the “Umbrella Revolution”.
This simple business, which has existed for 3,500 years, has barely achieved automated assembly until now, but it is not complete yet.
As for smart manufacturing, industry 4.0, and flexibility, these sexy terms are nothing short of words for the manufacturing industry.
1. Umbrella industry revolution: Umbrella pole assembly can be automated
“Our small project was actually included in the government work report by the Jinjiang Municipal Party Committee.” Zhang Xusheng is an associate professor in the School of Computer Science at Zhejiang University. His R&D team has just launched an automated equipment for assembling umbrella poles in Dongshi Town, Jinjiang, Fujian.
Jinjiang is known as the Umbrella Capital. According to the locals, one out of 30 people in the world is playing Dongshi umbrella.
It is tied with “Umbrella Township” Hangzhou Xiaoshan and “Umbrella City” Zhejiang Shangyu. The three places account for the majority of the domestic umbrella output of 2 billion.
For Dongshi Town, Jinjiang, making umbrellas made them love and hate.
Ma Yun said new manufacturing is coming, but China hasn’t even made umbrellas yet.
As a typical labor-intensive industry, umbrella manufacturing has hundreds of processes, and the industry has created a large number of jobs for more than 30 years. There are more than 200 umbrella companies in a small town of 650,000 square meters. The town area is full of advertisements for umbrella products. There are ordinary umbrellas and customized personalised umbrellas. There is even a local road called “Umbrella Avenue”.
Umbrellas are still labor-intensive, especially in the process of assembly of umbrella handles, middle rods, umbrella ribs, and umbrella covers.
But since 2008, workers’ wages have continued to increase by 20%. The cost is high and the industry faces pressure to survive.
The small project Zhang Xusheng mentioned can replace 10 skilled workers in the umbrella pole production link, which accounts for the highest labor cost, and save 80% of the labor.
Guo Zhaohui, the chief researcher of Baosteel Research Institute, believes that this equipment can be regarded as the industry 3.0 level.
“There are many types of umbrellas. The assembly equipment we have developed is only for one kind of umbrella pole assembly. In Dongshi Town, Jinjiang, the demand for such equipment is expected to exceed 80 units.” Zhang Xusheng said that the equipment was selected for local intelligent manufacturing Demonstration projects.
Industry insider Yang Feng said that this is at best a step forward for machine substitution, which is far from automation. Even if production automation is realized, it is only a link in the intelligent manufacturing complex system that cannot be more basic.
In fact, not only did everyone fail to figure it out, but they couldn’t even explain what smart manufacturing is.
Yang Feng said that the current academic circles and the government are not consistent.
Guo Zhaohui also stated that there is no precise definition. The general description is “the deep integration of automation, digitization, networking, and intelligence in the manufacturing industry.”
Zhang Xusheng also knows that the automated assembly equipment they developed is far from true intelligent manufacturing. He was surprised by the local government’s “over enthusiasm”.
This kind of “enthusiasm” is actually the epitome of the urgent need for automation in the industry and government.
2. Behind the change is driven by high costs
The umbrella industry in Dongshi Town, Jinjiang is the result of the transfer of industries from Germany, Japan and Taiwan.
It was originally an “adopted” low-profit industry. After 30 years, the average profit rate has never exceeded 10 points. Although we have tried OEM production, independent brand production, and transfer to Southeast Asia, the cost is getting higher and higher.
“Most companies do not have the concept of standardization, and the production of parts of the same model is very different. The parts produced in the upstream do not meet the standards, and the downstream assembly is manually screwed or knocked twice. It is a qualified product. It is very rough.” Zhang Xusheng said that the problem of parts and components is the epitome of non-standards in the entire industry.
“Even if part of the umbrella industry is transferred to Southeast Asia, reducing the cost of employment, but the supporting industry chain is still in Jinjiang, and the overall cost is still difficult to reduce if you include logistics costs.” When this is reached, umbrella manufacturers have to “leather themselves” “Fate”, automation transformation has become an inevitable choice.
With little demographic dividend left, and soaring production costs, China’s manufacturing industry has long lost its advantage in cheap prices.
Part of the business can be transferred, but it is impossible to transfer it completely. No new country can take it, and China can’t stand the hollowing out of its industry.
Yang Feng believes that if the current manufacturing industry wants to reduce labor costs, automation must be upgraded and upgraded.
In the Jinjiang factory, a very young and beautiful girl was there, repeating an action for more than ten hours a day, “very inhumane”.
Zhang Xusheng strengthened his judgment after watching this scene: “One of the goals of automation transformation is to free people from heavy labor. It is very necessary to make automation equipment.”
However, Liu Wen (a pseudonym), a veteran in the manufacturing industry, reminded that on the surface, the automation of machine substitution can reduce labor costs and avoid humanitarian problems. But from a financial point of view, if some companies ignore the cost of machine input, rising costs of energy, logistics, land, etc., and the degree of matching with market demand, then production efficiency will not increase.
3. Automation transformation has high commercial risks, and failure is commonplace
Liu Wen’s reminder comes from personal experience.
He has a partner who mainly works for brand apparel companies. It spent a lot of money to acquire a set of automated production equipment and an automated model factory, but it did not meet market demand. Not to mention improving production efficiency, not even efficiency. The factory and equipment are still there, and now they are mainly for investors and the government to visit.
High-input automation equipment has become the props for the show, the typical “monks read the scriptures crookedly”.
In fact, this kind of phenomenon is forced by companies to catch up with the fashion for financing.
Kan Lei, who has been observing the transformation and upgrading of the manufacturing industry for a long time, said that pure automation and intelligent manufacturing are different. The higher the automation, the lower the response speed may be.
Guo Zhaohui said that if it is transformed into a “black lamp factory” (referring to a workshop where no one produces), and the result is not profitable, it will be blind. Whether to automate or not, the core still has to be able to help make money and not follow the fashion.
Following the fashion is like walking a tightrope at high altitude, with huge risks.
KUKA’s robotic arms are well-known in the world. As long as they modify the parameter program, they can be used in various industries, such as handling, snatching, etc. This is a typical general-purpose equipment that has already run through the profit model.
But what Zhang Xusheng did was non-standard equipment: “It must be redesigned according to this enterprise and this application scenario.”
The automated assembly equipment for umbrella manufacturing cannot be applied to the shoe industry, and even umbrella manufacturers with different umbrella specifications cannot use it. Each set of equipment is basically developed from scratch.
Therefore, the failure to lose money is commonplace.
The Jinjiang Municipal Government has found several universities and used financial allocations to develop automation equipment. For example, a certain northern university of science and technology, which is famous for its robotics, has been unsuccessful in research and development for nearly a year, and the money invested has been lost.
“This kind of equipment research and development is not high-precision technology. It is mainly technical integration. It requires engineers with strong practical ability and rich experience to do it.” Zhang Xusheng said with emotion, so besides him, the core members of the team are all senior engineers. .
“The research and development cost of non-standard automation equipment is high, the payback cycle is long, and the risk is high. Both R&D companies and production companies need to endure hardships. It will never be like the Internet industry, where the return on investment has increased geometrically.” Zhang Xusheng said, even for them. All of the technical teams had to consider “from selling equipment to selling products”, and was broken for money.
However, high risk leads to high returns, and the eternal business rules.
In order to upgrade, Qingdao Red Collar Group, a domestic tailor-made suit, took more than 10 years and spent 250 million yuan to build a customized “smart factory” for non-standard suits in 2012. More than 2,000 workers on the production line can produce 3,000 customized garments of different styles every day. The factory customization is complicated but not out of order.
In the following 5 years, the annual sales and profits of the red collar have doubled.
However, the industry does not recognize the benchmark red-collar “smart factory” model.
Liu Wen felt that the red-collar suit customization was only done well in standardization and standardization, and did not significantly improve production efficiency. “Suit customization itself requires personalized production. It would be weird if the same is produced in large quantities.”
After all, making money is the king, regardless of whether it is smart manufacturing or even Industry 4.0.
4. 40% of enterprises are not ready to move towards Industry 4.0
A 2016 report by McKinsey & Company found that nearly 80% of Chinese companies want to embrace Industry 4.0, but more than 40% of companies believe that they are not ready to embark on the journey of Industry 4.0. Many Chinese companies are still at Industry 2.0 or even lower levels.
The opinion of Gao Guanmin, general manager of Hangzhou Lifuhao Electromechanical Co., Ltd., supports the above report. He believes that many companies, “the basic management process information is not in place, they want to jump directly to Industry 4.0, maybe they can only make a look.”
Guo Zhaohui believes that Industry 4.0 cannot be superstitious.
Whether the industry is developed or not, whether it is high-end or not is not simply measured by “whether it is Industry 4.0”. Enterprises should choose according to their own needs.
Some special products are not suitable for assembly line production, they will stay at 1.0 or even manual labor; some industries where the market and products change too fast may stay at 2.0 for a long time; and Industry 3.0 has the characteristics of high efficiency, high quality, and low cost. It is suitable for large-scale process industries such as petrochemical industry, and does not necessarily need to evolve to Industry 4.0.
Ma Yun’s prediction is very optimistic.
But for manufacturing, everything is possible.