China's manufacturing heartland accelerates digital transformation

-- Dubbed the "world's factory," south China's Guangdong Province is home  to nearly 3 million industrial companies. It is now accelerating the  digital transformation, exploring paths for the upgrading of its  manufacturing industry.

-- Currently, a total of 15,000 companies in Guangdong have achieved  digital transformation and 500,000 companies have gained access to cloud services, thanks to industrial internet platforms.

by Xinhua writers Lu Hao, Xu Ruiqing, Wu Tao, Ma Xiaocheng

GUANGZHOU, April 5 (Xinhua) -- As outlined in a blueprint for its development in  the next five to 15 years, China will promote the deep integration of  digital technology and the real economy, and empower the transformation  and upgrading of traditional industries, so as to spur economic growth.

Hailed as the "world's factory," the southern Guangdong Province is home to  nearly 3 million industrial companies. Now the manufacturing hub is  accelerating its digital transformation, exploring paths for the  upgrading of its manufacturing industry.

"LIGHTHOUSE FACTORY"

On a giant digital screen that simulates the factory's digital operation  in a microwave oven factory of Midea Group, a Chinese home appliance  giant, in Foshan City of Guangdong, red alarms flash to alert engineers  to any problems with production equipment.

The factory is one of the largest microwave oven production bases in the  world, with an annual production capacity of over 44 million units.  About 47 percent of the world's magnetrons, used to emit microwaves, are produced here each year, making it a major component supplier for  global microwave oven manufacturers.

A staff member works at a workshop of microwave oven factory of Midea  Group, a Chinese home appliance giant, in Foshan City, south China's  Guangdong Province, April 1, 2021. (Xinhua/Li Jiale)

In March, the World Economic Forum listed the factory among the latest  members of its global lighthouse network, which is intended to select  factories leading the way in the adoption and integration of frontier  technologies of the Fourth Industrial Revolution.

To date, a total of 69 factories across the globe have been listed as  lighthouse factories, including two under Midea Group, whose household  air-conditioning plant in Guangzhou, capital of Guangdong, joined the  list last year.

Zhou Xiaoling, director of information technology (IT) with Midea Group,  said thanks to digitalization, the factory has increased its overall  internal efficiency by 28 percent, improved product quality indicators  by 15 percent, and shortened order delivery time by 53 percent.

"Midea started its digital transformation in 2012. The corporate revenue  increased by 150 billion yuan (around 22.85 billion U.S. dollars) while  the number of employees fell by 40,000 from 2012 to 2019," Zhou said,  adding that "digital transformation has injected strong development  momentum into the traditional manufacturing sector."

INDUSTRIAL INTERNET PLATFORMS

In Guangdong, a total of 15,000 companies have achieved digital  transformation and 500,000 companies have gained access to cloud  services, thanks to industrial internet platforms, according to the  province's department of industry and information technology.

Photo taken on April 1, 2021 shows a workshop of a microwave oven factory of  Midea Group, a Chinese home appliance giant, in Foshan City, south  China's Guangdong Province. (Xinhua/Li Jiale)

In recent years, bellwethers in the industrial internet field such as  Huawei, Midea, Tencent and ROOTCLOUD have grown rapidly. They have not  only become pathfinders for the digital transformation themselves but  also promoted the transformation of a large number of small and  medium-sized enterprises.

According to Xu Zhijun, rotating chairman of Huawei, by the end of 2020, the  company had built more than 40 industrial internet innovation centers in China, providing digital transformation services for more than 20,000  industrial enterprises in over 30 industrial clusters.

He Dongdong, chief executive officer of ROOTCLOUD, an industrial internet  service provider headquartered in Guangzhou, said by working with other  leading companies in the industry, ROOTCLOUD has created more than 20  industry cloud platforms concerning construction machinery,  environmental protection, textiles and home furnishings. It is now  providing digital transformation services for companies in 81 industrial sub-sectors.

In 2019, ROOTCLOUD launched an industry chain platform for customized home furnishings. More than 20 companies in Guangzhou, Foshan and other  cities have connected with the platform, where they can complete the  front-end design, manufacturing, logistics and transportation of home  furnishings with the help of the internet, increasing their operating  efficiency dramatically.

"Digitalization marks a big leap for the traditional manufacturing industry. Since 2016, our business volume has been growing by 100 percent each year,  which shows a strong demand for digital transformation in the  manufacturing industry," He said.

CHALLENGES AHEAD

Despite the progress and achievements to date, the digital transformation of  Guangdong's manufacturing industry still faces arduous tasks.

Undated file photo shows Midea Group, a Chinese home appliance giant, in  Beijiao Town of Foshan City, south China's Guangdong Province. (Photo by Zhou Zhuojie/Xinhua)

According to Ge Changwei, director of the Guangdong Provincial Development and  Reform Commission, only one-sixth of the nearly 3 million industrial  enterprises in Guangdong have access to cloud services.

Most of the province's industrial enterprises are small, medium and  micro-sized firms. "They dare not, and are unwilling and unable to  change," said Tu Gaokun, director of the provincial department of  industry and information technology.

Some companies are concerned about the large investment and long return  periods in the industry, and rely heavily on the traditional development path, while some lack technologies and talent necessary for digital  transformation, Tu noted.

To speed up digital transformation, companies believe that more efforts  are needed in industrial software research and other key fields.  Meanwhile, entrepreneurs need to raise their awareness of digitalization and there should be more visible and usable digital services for small  and micro-sized enterprises.

In the next step, Tu said Guangdong will launch technological research  projects and demonstration applications in the fields of industrial  software, artificial intelligence and intelligent manufacturing, and  strive to provide more technological support for the digital  transformation of the manufacturing industry, especially for small and  micro-sized businesses.

(Video reporters: Li Jiale, Lu Hao; Video editor: Hong Yan)