At about 8:30 yesterday morning I took a bus to go to the Meijiang Convention Center in Tianjin, a large, modern complex of exhibition halls and meeting rooms, for the opening of the 14th annual China Manufacturing International Forum (MIF2017), whose theme is Constructing the New Ecosystem of Made in China 2025.
At the entrance to the convention center, I walked through a parallel formation of red-shirted conference workers who greeted attendees as they made their way into the building. Navigating through the already crowded lobby, I made my way to the second floor to attend a session called “Champions”, a kind of think tank meeting for a select group of conference attendees.
On the ride up the elevator, I was wondering why the MIF2017 organizers had scheduled the Champions session for three hours. In the U.S., the usual practice is to run these kinds of breakout sessions for 60 or 90 minutes. What would they do for three hours?
I got my answer a few minutes into the session. The challenge that was put before this group was coming up with ways that Chinese manufacturing companies can become global players. In a series of presentations, Chinese industry executives made clear that they want to reposition Chinese manufacturing in the eyes of the world from being a mass producer of products to a nation of truly global companies recognized for high-quality products and brands. This is one of the objectives of China’s state-sponsored Made in China 2025 program.
Improving quality and embracing digitization were themes that ran through the entire day, from the Champions session to a nearly five-hour general session. But the challenge of going global, attendees were told, are numerous, ranging from the need for Chinese manufacturing companies to devise appropriate strategies and operating structures to undertake globalization, to understanding cultural differences in other countries they want to do business in. A number of speakers also emphasized the importance of lean manufacturing in laying the foundation for digitization and concepts like smart manufacturing.
“Lean is the foundation for digital and digital is the foundation for globalization,” said one presenter.
Addressing the cultural aspects of going global, Chen Dayong, International Business System General Manager of CRRC Corporation Limited, a manufacturer of trains, told the story of how his company “localized” its presence in Springfield, MA, in part, by spending $8 million to renovate an historic manufacturing building in that town. “Be harmonious with customers,” he advised. “Enjoy happiness with the public.”
The transition to digitization, too, has many hurdles here in China, attendees were told, including a shortage of knowledge and expertise on the subject as well as a lack of hardware and software technology. “We may miss the opportunity to have the equipment for smart manufacturing,” one executive said during the conference’s general session.
But others were clear that digitization is not an option. Wang Hai Bin, Executive Vice President and General Manager of Siemens Ltd.’s Digital Factory Division, based in Beijing, warned Chinese executives of the consequences of not aggressively embracing digitization, noting that in the last decade a number of companies have dropped off lists like the Fortune 500. He urged executives to “build an integrated relationship with data.”
“This is not a vision anymore,” he said. “It is a reality.”
Manufacturing 4.0, the Manufacturing Leadership Council’s term for the new industrial era, was the subject of my talk in the afternoon. I urged attendees – there were about 1,400 people in the room – to think about the technological, organizational, and leadership dimensions of the journey to M4.0, each of which have their own opportunities and challenges.
The ML Council defines Manufacturing 4.0 as: “… the next stage of industrial progress, enabling mass customization on a global scale by factories and plants that are extensively networked, software-driven, intelligent, autonomous, and information-intensive.
“M4.0 will disrupt existing business models and enable the creation of new ones, requiring manufacturing companies to rethink the fundamentals of their business, and adopt new IT and automation technologies, organizational models, and leadership approaches in an orchestrated manner.”
Some of the ML Council research I presented, particularly the finding from the Council’s April study on Next-Generation Leadership that many manufacturing company leadership teams are not well prepared for the M4.0 journey, provoked questions from the audience on how to deal with this leadership issue.
I advised a company-wide program of education about M4.0, the need for leadership to embrace M4.0 and make it part of their corporate DNA, the necessity of bringing in younger, digitally-savvy people, and having the willingness to experiment and take risks. Most importantly, I told attendees not to be bound by conventions and concepts of the past and, instead, think big about the possibilities with M4.0.
I was also interviewed by 10 Chinese media organizations on the M4.0 subject.
Many executives here at MIF2017 acknowledged that Chinese manufacturing companies are just getting started with concepts such as digitization, smart manufacturing, and the broad idea of Manufacturing 4.0. They seem to realize the challenges for them and are prepared for a step-by-step journey to the new way of doing things.
As Li Maojin, Chairman of Tianjin YOUFA Steel Pipe Group, put it: “We want to be in the proximity of Manufacturing 4.0 by 2025.”
Today’s conference ended with a chorus group singing an inspirational song about manufacturing, against a background video that depicted China’s growing industrial strength, including the building of an aircraft carrier.
Tomorrow, ML Council members from Nexteer and IBM as well as Pixelligent, the ML Manufacturer of the Year (Small Enterprise) award winner this year, will be speaking about their M4.0 projects.