Progress, problems and Countermeasures of Digital Transformation of Manufacturing Industry [Electric opportunities]

At the 2021 China International Motor Industry chain Annual meeting hosted by Shanghai Nonferrous Network (SMM), Lu tie, PhD in Economics, Institute of Industrial Economics of the Chinese Academy of Social Sciences and professor of the University of the Chinese Academy of Social Sciences, introduced the progress, problems and countermeasures of the digital transformation of the manufacturing industry. He said that after decades of rapid development, China's economy has entered a new stage of development. In the new stage, with the new situations such as the upgrading of consumption, the aging of the population and the slowdown of economic growth, the development of the manufacturing industry is faced with outstanding problems such as the imbalance between supply and demand in the commodity market and the labor market, technological innovation being controlled by people, and so on. The digital transformation of the manufacturing industry can provide effective solutions to these problems, and then promote the high-quality development of the manufacturing industry and enhance the control of the global value chain of China's manufacturing industry.

The significance of Digital Transformation of Manufacturing Industry

After decades of rapid development, China's economy has entered a new stage of development. In the new stage, with the new situations such as the upgrading of consumption, the aging of the population and the slowdown of economic growth, the development of the manufacturing industry is faced with outstanding problems such as the imbalance between supply and demand in the commodity market and the labor market, technological innovation being controlled by people, and so on. The digital transformation of the manufacturing industry can provide effective solutions to these problems, and then promote the high-quality development of the manufacturing industry and enhance the control of the global value chain of China's manufacturing industry.

Assist the adjustment of supply and demand in the commodity market

China's existing manufacturing production system is facing the challenge of continuous upgrading of consumption, its product market has a structural imbalance, and most traditional industries are facing the market environment of overcapacity and excessive competition, resulting in a serious waste of resources. On the demand side, consumer demand is diversified and personalized, which is no longer satisfied with the homogenized products obtained by traditional mass production. On the supply side, enterprises can not timely capture the personalized needs of consumers, and achieve rapid response; traditional production processes and processes can not effectively trace the source of product quality problems, can not make timely adjustments to the problem links.

The digital transformation of manufacturing industry can help to capture personalized demand, realize rapid response mechanism and analyze product identification. In the face of the increasing differentiation and personalization of the needs of consumers and downstream customer enterprises, the manufacturing industry can, through digital transformation, focus on the analysis and processing of demand-side data, and enhance the ability to capture personalized demand and other information in a timely manner. adjust or upgrade the existing products to better meet the market demand, reduce production costs, improve production efficiency, and improve the loose connection of the middle and lower reaches of the industrial chain.

Assist the adjustment of supply and demand in the labor market

At present, China's labor market is showing a structural imbalance. On the demand side, due to the increasing trend of population aging and rising labor costs, many small and medium-sized enterprises are facing the dilemma of hiring workers. In addition, due to the changing needs of consumers, it is difficult to fully meet the existing skills of the labor force alone. On the supply side, the absolute number of the working-age population continues to decline, while it is difficult to meet the requirements of new jobs with the preliminary digital skills mastered by the labor force itself. As a result, there is a structural imbalance of "both unemployment and job vacancies" in the labor market, which affects the overall production efficiency of the manufacturing industry.

The digital transformation of the manufacturing industry can help to improve the quality and efficiency of the labor force. For simple labor tasks, due to low skill requirements, automation can be realized according to the pre-set mode, and the production cost can be reduced by introducing digital technologies such as artificial intelligence to replace labor. For complex labor tasks, due to the high demand for skills, we can stimulate the initiative of the labor force and encourage the labor force to take the initiative to participate in targeted on-the-job training and "learning by doing", so as to grow into compound talents proficient in emerging digital technology. complete the employment transformation.

Promote the agility of technological innovation

Corresponding to the speed, breadth and depth of technological innovation, China's manufacturing industry has the problems of slow change of innovation output, narrow sources of research and development, and it is difficult to expand new areas to support sustainable innovation. Specifically, the traditional pilot projects pursue perfection and do not meet the current market demand of frequent updates; although the personnel of non-innovation departments have rich production experience and other comparative advantages, most manufacturing enterprises have not yet established the consciousness of full participation in innovation. Technological innovation activities link multiple value creation links, and a large amount of information needed by technological innovation is loosely distributed, so it is usually difficult to ensure the efficiency and integrity of information collection.

The digital transformation of manufacturing industry can effectively improve the capacity of innovation output, research and development and sustainable innovation. In terms of the speed of technological innovation, the R & D department can obtain the massive data transformed from all kinds of information directly from the enterprise database, according to which the R & D process can be simulated continuously, and then the R & D rate can be accelerated. In terms of the breadth of technological innovation, it not only expands the participation of closed innovation, but also breaks through the internal innovation boundaries of enterprises, providing the possibility for open innovation. In terms of the depth of technological innovation, with the digitization of information in all aspects of production and operation, the original hidden loopholes can be manifested, and the obstacles of technological innovation, which are originally dominant but difficult to collect reliable data, may also be eliminated.

The Progress of Digital Transformation of Manufacturing Industry

On the whole, the digital transformation of China's manufacturing industry has made remarkable progress.

In 2019, the scale of China's industrial digital added value reached 28.8 trillion yuan, an increase of 16.8 percent over the previous year; the digitization rate of production equipment of industrial enterprises above scale was about 47.1 percent, the numerical control rate of key processes was about 49.5 percent, and the networking rate of digital equipment was about 41.0 percent. In 2020, the scale of China's industrial digital added value further expanded, reaching 31.7 trillion yuan, an increase of 10.1% over the previous year, and the digitization rate of production equipment of industrial enterprises above scale reached 49.4%.

Specifically, the rapid development of digital transformation of China's manufacturing industry is reflected in the development of enterprise cloud, industrial Internet construction and service-oriented manufacturing.

First, the enterprise goes to the cloud. According to the data released by the State Internet Information Office, more than 470000 new enterprises have been added to the cloud in China in 2020, and the number of enterprises on the cloud has increased rapidly.

The second is the construction of industrial Internet. The scale of economic added value of China's industrial Internet industry is about 3.1 trillion yuan in 2020. As of June 2020, there are more than 80 industrial Internet platforms with industry and regional influence, and more than 60 million industrial equipment connections.

The third is service-oriented manufacturing. According to the statistics of China Service-oriented Manufacturing Alliance, China's service-oriented manufacturing industry has a good momentum of development. Among the service-oriented manufacturing demonstration enterprises, the service business income accounts for about 1/3 of the total income.

From the point of view of shunt industry and discrete industry, the progress of digital transformation of the former is generally better than that of the latter.

Process industries are often faced with challenges such as higher raw material reserve costs, higher equipment maintenance costs and higher environmental protection pressure. At present, the digital transformation is gradually breaking through the original limitations of production scheduling, process innovation, equipment operation and maintenance, changing local coordination into global coordination, and realizing green manufacturing while optimizing the allocation of resources.

Discrete industries have the possibility of changing product categories in a short period of time, but they are also faced with challenges such as inefficient supply chain management and new service demand. The current digital transformation is committed to realizing the transformation of information management, manufacturing methods and business models, as well as solving the isolated island of information, adapting to the individual needs of consumers and realizing the strategic transformation of enterprises.

The problems faced by the Digital Transformation of Manufacturing Industry

First, small and medium-sized enterprises are hampered by the untimely upgrading of equipment, which hinders the smooth progress of the transformation. The premise of promoting the digital transformation of the manufacturing industry is to basically realize automation, install sensors and other equipment on the basis of automation, and realize the digitization of information, so as to make use of the non-consumption and non-exclusiveness of data to enable information to be transmitted more quickly and widely, and to improve the efficiency of production management. However, at present, many small and medium-sized enterprises have not achieved basic automation and still rely on the labor-based mode of production.

Second, there is a lack of digital talents, and the existing human resources have not been fully utilized. First of all, digital native talents are in hot demand, and demand exceeds supply, so they need to spend a lot of money to recruit relevant talents. But companies with limited financial strength cannot bring in talent in this way, and they do not have the relevant channels to provide professional training to the existing workforce to enhance their digital skills. Secondly, in the process of transformation, the introduction of data elements will force the transformation of labor skills, but the supporting training system is not perfect, making the labor force in a dilemma.

Third, enterprises are not fully aware of the importance of data as a factor of production, and the transformation is superficial. It is true that the virtual factory constructed by digital twins provides real-time global data, but some enterprises only regard it as a surface project and do not make full use of it after completion, and even if they use it consciously, it also fails to classify and store the data because the amount of data is too large, resulting in the loss of effective data. Although digital management systems such as ERP, MES and CRM are introduced, the data are not fully mined, which does not fundamentally reduce the burden and increase efficiency for management.

Fourth, the transformation of the development strategy of leading enterprises still needs to be accelerated, and the implementation of corporate social responsibility is missing. As the core enterprise or head enterprise of the industrial chain, it generally undertakes the responsibility of building a platform and providing digital transformation services to small and medium-sized enterprises. But at present, even if the platform is completed, small and medium-sized enterprises will "take care of themselves" because of the lack of awareness of transformation, the obstacles of capital investment and the crisis of trust in the core enterprises that compete with each other. As a result, the actual use efficiency of many manufacturing platforms is not high. Did not play the due role of the platform.

Fifth, there is no unified standard for product data coding, and there is no official index to measure the degree of digital transformation. In the process of transformation, the product coding standards of the same industry chain are not unified, and when the finished products of the upstream enterprises are put into the downstream enterprises as intermediate products, they are often re-coded, so that the identification analysis can not run through the whole industry chain. the role of data elements in enabling capital elements is greatly reduced. There are no official indicators for the measurement of the digital transformation of the manufacturing industry, and it is not clear which dimensions of data we should pay attention to. There are still some difficulties in the measurement or collection of some indicators, so it is difficult to ensure the effectiveness and accuracy.

Countermeasures to promote the Digital Transformation of Manufacturing Industry

We will vigorously promote the leak detection and filling of automation equipment in small and medium-sized enterprises and the introduction of digital technology. In order to promote small and medium-sized enterprises to basically make up for automation equipment, according to their own situation, the introduction of digital technologies such as big data and artificial intelligence can provide special funds or low-interest special loans to alleviate the financing difficulties they face. In addition, in order to enhance the awareness of digital transformation of small and medium-sized enterprises, the Economic and Information Bureau and other competent departments can regularly organize entrepreneurs to hold digital transformation exchange meetings and invite successful cases to share their experiences for other enterprises to learn from.

Fully tap the potential of existing human resources. In the short term, the government should support enterprises to provide daily training and training of professional knowledge of digital skills for on-duty employees, organize a number of technical and business integration teams, establish a "transmission, help and guide" mechanism, and rapidly popularize the basic knowledge needed for digital transformation. In the long run, we should promote the in-depth cooperation of industry, university and research, combine the theoretical knowledge of the school with the practical knowledge of enterprises, consolidate the professional foundation, master the practical ability, and prepare talents for the continuous promotion of digital transformation.

Promote increased data awareness. Enterprises should be encouraged to update corporate culture and system, implement innovative incentive system, enhance employees' awareness of using data, mining data and creating data, enhance vitality for continuous innovation and iteration, emphasize the value of data elements, guide the problem of inability to collect, process and store big data, and provide a list of relevant service enterprises for reference for enterprises with difficulties. We should urge the reform of enterprise management, re-examine the current enterprise management structure, look at the "data", reduce unnecessary posts, levels and departments, and achieve the optimal allocation of resources.

Continue to promote data rights and ensure data security. The government should cooperate with the head enterprises to endorse the construction of the platform to ensure data security and prevent unfair competition. Speed up the improvement of the legal system of data security, further clarify the data ownership of enterprises, individuals and other subjects and the data boundaries allowed to be collected and used, clarify the responsibilities and rights of relevant parties involved in the circulation or use of data, strengthen the protection of personal information and corporate data, ensure their security, and try their best to eliminate the data security concerns of enterprises arising from "going to the cloud".

Unify product coding standard and data interface. For each data source platform, unified data format standards and coding rules should be issued to eliminate the phenomenon of "data isolated island" on the basis of clarifying the right of data. Speed up the formulation of standards for equipment connection and manufacturing data sharing, so as to realize the compatible connection between physical devices and virtual data. Especially in the same industry, we should ensure that the data interface is consistent, so that the efficiency of logo parsing can be brought into full play. In addition, the mutual recognition of the standard system and the connection between a series of inspection and testing systems should be strengthened.

Build and improve the ecological network of the whole industry chain. At the micro level, it is necessary to promote cooperation among cross-industry enterprises and reduce the operational risks of individual enterprises; at the meso level, it is necessary to absorb data and technology from other regions or industries to empower the construction of local ecological networks. At the macro level, based on the background of the new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other, we should also promote the opening of the ecological network to the outside world, so as to gather foreign innovation elements and promote the high-quality development of the manufacturing ecological network.