A growing number of innovative companies in China are leading the way globally in automation. Firms at the forefront in China are capable of bold experiments in futuristic ways. At a recent IMA China CEO Forum meeting, a participant gave an example of that innovation.
‘A Chinese electronics manufacturer automated its factory so that it no longer uses lights; it operates in complete darkness. In the factory, only tiny blue and red dots are visible to show each robot’s location. The robots call the shots. Human engineers wear RFID chips so they can be identified by the robots when doing maintenance.’
Chinese research groups, in partnership with foreign firms, are also bringing next-gen manufacturing concepts to the factory floor.
‘We created, with the Shenyang Institute of Automation, a shop floor that automatically adapts to product redesigns. When the robots receive a new order, they reposition themselves on the shop floor to optimise the production process of the new product.’
Each year, the World Economic Forum (WEF) awards the title ‘Lighthouse’ to outstanding factories that are then included in its Global Lighthouse Network. These firms are selected to show what is possible as the Fourth Industrial Revolution gains speed. For the last two years, no country has had more lighthouses awarded than China.
Adapting automation to China
MNCs have found that a ‘copy and paste’ approach to automation does not work in China’s unique market.
‘Many MNCs that imported automation equipment from Europe without a business case suffered huge losses. Now, they are looking for local solutions and a local business case when they build a plant. ‘
Slow enterprise software is one of the biggest drags on efficiency of global integration. Even if they perform well, global applications are rarely designed with the Chinese customer in mind.
‘Our Chinese competitors use locally developed SAP WeChat applications. Headquarters often resists a local solution, but to compete here, we must be fast. It may take a bit of creativity, but in the end, global businesses will be stronger.’
Back to the drawing board
New digital tools and automation often make human constraints obsolete. Removing people from the factory floor means removing old limitations.
‘In the early days of automation, engineers who had been designing assembly lines were locked into thinking about human constraints. As a result, they were automating what humans were capable of doing, rather than forgetting everything and starting from scratch.’
In China, this kind of blue-sky thinking can be hard to come by. Too often engineers rely on what they know has worked well in the past.
‘It is not that there is anything wrong with the engineers. Their experience is not yet relevant to the latest technologies, and nobody has trained them on the methodology of a clean sheet. They proceed incrementally, because it feels safer.’
It’s not the tech; it’s the people
While it is easy to point to technical difficulties in automating manufacturing, the real issue isn’t the software or the hardware. It’s finding the right talent to drive a digital transformation of the business, the organisation and the technology.
‘A lack of change management and talent are the thorniest problems to solve. For example, when costs skyrocket, it is often because people lack the knowledge and skills to select a suitable use case and business outcome for the technology.’
The reskilling challenge is as tough to tackle in China as it is in other markets.
‘The new roles needed for transformation are the same in China as in the West – data specialist, architecture expert, and agile coach. Digital transformations are about humans and cross-functional collaboration. This challenge is universal.’
Directional compliance with ambiguous regulations
Managing the uncertainty of an evolving regulatory environment is an ongoing conundrum for automation digital transformation. Companies can gain some comfort knowing that the authorities have set the overall regulatory direction, even if they have yet to hammer out the details.
‘Chinese data security regulations are aspirational. The government has told us where they want to go; they will get there step-by-step. In this context, it is important to follow what I call “directional compliance.”’
Waiting for all the details to arrive is not an option in China. The authorities expect firms to move towards compliance in good faith.
‘For many of us, our greatest concern is the Personal Information Protection Law (PIPL) and the Data Security Law. Investigators are asking, “What data do you have? How did you get it? What do you do with it? Where do you store it?” Next year, they may have different questions. We don’t know what compliance completely means, but we know the direction in which compliance is taking us.’
IMA Asia members can login to download and read the full paper on ‘China’s Automation Accelerates.’ To learn more about IMA Asia’s memberships or subscribe to our ‘Asia Forum Notes’ or ‘China Forum Notes’, contact us at service@imaasia.com.