Alibaba launches China factory in manufacturing drive
Powered by Alibaba’s cloud computing infrastructure and IoT, the Hangzhou-based factory provides SMEs with a digitalised end-to-end manufacturing supply chain that allows for fully-customised demand-driven production.
This equips smaller businesses and manufacturers with the ability to benefit from the digitalisation of China’s US$4trn manufacturing market through being able to respond more efficiently to customer’s changing needs.
“Data is the core of new manufacturing and harnessing data insights is key to capturing new opportunities in the shift in consumer preference for personalised rather than mass-produced goods. New manufacturing transforms traditional manufacturers with data-driven intelligence and technology to move towards a more agile model of production based on real-time demand,” commented Alain Wu, CEO of Xunxi Digital Technology Company, Alibaba Group. “This enables traditional manufacturers to scale profitability and reduce inventory levels while still being able to meet these personalisation needs.”
The announcement marks a continuation of Alibaba’s expansion beyond its core business of e-commerce and into sectors on other parts of the online retail supply chain.
Xunxi’s trend and sales forecast model, in alignment with its own AI-aided integrated product design platform, provides manufacturers with insights into consumer preferences. This accelerated information flow can reduce research and development costs and allow businesses to capture the fast-evolving opportunities for consumer personalisation.
In 2016, Alibaba founder Jack Ma highlighted how new manufacturing was one of the five trends outlined for future business opportunities for Alibaba. The others were new retail, new technology, new finance and new energy.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.