'New Era of Human-Machine Collaboration' Strategy to Address Consumption Upgrades
SHANGHAI, March 8, 2018 /PRNewswire/ -- Recently, the State Council of the People's Republic of China published the State Council Guiding Opinion on Developing the Industrial Internet Platform by Furthering Development of the 'Internet Plus Advanced Manufacturing Industry'. In the next 2-3 years, the 'industrial internet platform' will move from concept to reality, and the market will attract trillions of RMB. From an industry point of view, the industrial internet platform is still in its preliminary stages, but is developing quickly, with all kinds of advantages.
Given this opportunity, Midea Group announced at this year's Appliance & Electronics World Expo (AWE) that it will build its own digitalization, and artificial intelligence (AI)-driven industrial internet platform. Although the industrial internet platform concept is popular, the experience of large companies in Europe and the United States proves that the transition from manufacturer to solution provider requires long-term planning, and extensive preparation. It took a decade for Germany's Siemens to finish its transition. Though the transition would take a long time to achieve, the results have proven to be worth the time invested. Siemens' after-tax net profit has risen 40% over the past five years. How does Midea plan to stand out among so many strong competitors through its own industrial internet platform?
Digital closed loop
In 2014, Midea, understanding the urgent need to remain competitive, began to implement the 'One Midea, One System and One Standard' strategy to move to standardized, and platform-based, manufacturing. It has standardized and systematized its seven links, which are R & D capability, response to orders, planning capability, flexible manufacturing, purchasing capability, quality tracking, logistics capability and customer service & installation, laying the foundation for an industrial internet platform which will make it easier for Midea to digitalize, and build its industrial internet platform.
Midea has not only integrated its manufacturing system, but has also connected its systems to providers. Midea implements the business transformation of determining production according to sales, based on the 'T + 3' model, using digital operations, both internally and in the supply chain. Beginning in 2017, Midea has operated through global cooperation with transparency and high efficiency, further transforming its business and upgrading its intelligent supply chain through intelligent manufacturing and intelligent logistics. In software development, Midea already has the ability to provide the most comprehensive intelligent manufacturing suites. Midea's original integrated planning and purchasing platform, combined with Midea's business management system MBS, improves scheduling efficiency by 83%, which, in turn, leads to accurate operations, and efficient quality management. The collaboration cloud, operated in partnership with providers, is able to fine-tune manufacturing plans, enables full tracking of logistics and ensures prior booking of everything before entry. With complete tracking enabled by blockchain technology, logistics can be efficient and safe.
Hardware and software collaboration
At present, the development of industrial internet platforms is primarily on the surface, relying only on the internet or on purchasing equipment. There are still many collaboration and connection problems to be solved in manufacturing platforms. This is where Midea's industrial internet platform shows its advantages. Midea, on one hand, has some of the best business practices in manufacturing industry, and many years of experience in complex manufacturing, such as plastic injection, electronics, assembling, and 3C manufacturing, because China is a large, powerful manufacturing nation, and Midea is one of the top manufacturers in China. On the other hand, Midea enables seamless integration of big manufacturing data into motion control, effectively enhancing visualization, cooperation between human and machine, and full quality control in the manufacturing process, because Midea has introduced global-leading robotics, automation and business solutions by cooperating with KUKA (Germany) and Servotronix (Israel).
In terms of logistics, which connects both the user and the manufacturer, Midea also ensures cooperation between human and machine to improve productivity in various parts of the industry chain. The distribution capacity of logistics warehouses is increased using large warehousing, efficient sorting, automatic loading, and mobile AGV, because of the use of robotics and automation technology. Delivery and storage can be made more efficient and safer, and all business aspects of products, such as sales, warehousing, delivery, and after-sales, are connected by data, transparently and seamlessly. Orders are also intelligently controlled, and business decisions are analyzed by massive, real-time analysis of IoT data, using AI, big data analysis, and blockchain technology.
The ultimate goal of Midea's industrial internet platform is to realize truly personalized C2M by implementing intelligent manufacturing and online collaboration, making the entire industry's closed loop operate efficiently around the core of customer demand. If Midea depends totally on the purchase and assembling of semi-finished goods, mass customization merely means customers can choose colors and patterns. But products which are truly designed for customers must respond to their potential needs or questions, in addition to meeting their existing needs.
Optimizing scheduling by AI and big data creates challenges for supply chain stocking and manufacturing scheduling, while also solving the problem of fragmented and unplanned customer orders. For Midea, which has already increased scheduling efficiency by 83%, this not only means reduction in costs, but also means Midea's industrial internet platform will be capable of manufacturing small orders, and even single item orders, in the future. To understand the needs of customers, Midea does not stop at merely letting customers participate in product design. It also introduces a new smart new retail model that can discover the real needs of customers, based on massive data accumulation and analysis. In sales, the most suitable product solutions will be recommended intelligently to customers through facial recognition, natural language understanding, big data analysis, and other technologies. In turn, Midea obtains customer profiles based on big data, which helps to develop products using consumer sales data, and interactions with the customers who make Midea's over 300 million units annual global sales of products possible.
It has been reported that, at present, the initial stages of Midea's industrial internet platform solutions have taken shape. Different from most providers, who only offer customers products and solutions in electronics or a single industry, Midea has products and solutions which it can transplant from the equipment manufacturing industry to electronics, assembly lines, and discrete manufacturing.
Midea's 'new era of human-machine collaboration' blueprint successfully unites the upstream and downstream of the industrial chain, and achieves fully intelligent cooperation between humans and machines throughout the whole process, and in the whole industry chain. However, Midea's goal is not only to achieve outstanding whole value chain operation. In the upcoming period of explosive growth for industrial internet platforms, Midea has undoubtedly shown that it can play a vital role in boosting the transformation and upgrading of other manufacturing companies.