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“Internet plus industrial” farewell smile curve

Competitive bronze bearings China Manufacturer

Whether it is the German industrial 4, or American industrial Internet, matter of fact and China’s Ministry of industry and information technology to promote the “two integration” strategy is similar. To some extent, a new round of industrial revolution may be a good opportunity for Chinese manufacturing, may also be a an important opportunity for Chinese manufacturing transformation and upgrading. Competitive bronze bearings China Manufacturer

This year’s government work report pointed out that China should develop “Internet plus” action plan to promote the Internet, integration of networking and manufacturing industry. Without boundaries, people, information, dissemination speed is a typical feature of the Internet. “Internet plus industry” is “4.0” + “Internet industry”, in addition to information and spread fast, no boundaries will also realize the manufacturing industry upstream and downstream partners, sharing the national economic value chain. “Internet plus industry” is the “information sharing” and “physical sharing”, thus creating a new shared economy, driven by the public and business innovation. Competitive bronze bearings China Manufacturer

First, the added value of products made in China is lower

The manufacturing industry is the lifeblood of the national economy. There is no strong manufacturing industry, a country will not be able to achieve rapid and healthy economic development, stable, labor and employment issues will become increasingly difficult to highlight, people’s life is improving, national stability and security will be threatened, informatization, modernization will lose a solid foundation in industrial developed countries. The role of manufacturing for example. Analysis of the industrial structure in the United States, although the proportion of service industry contribution to the national economy is very high, but the manufacturing sector to GDP has more than 20% direct contribution, stimulating economic growth rate 40%. the Japanese government also believes that the rapid economic growth of Japan is in the manufacturing industry as the core. It can be said that the manufacturing industry has the important status and irreplaceable role for a country’s modernization construction. Competitive bronze bearings China Manufacturer

Due to the lack of independent brands, the lack of well-known brands, 2009 data show that about 90% of China’s exports are OEM or OEM production, product added value is only equivalent to 4.37% of Japan, 4.38% of the United States, Germany’s 5.56%.

By the end of 2011, American scholars issued a “global supply network > capture Apple profit report, which based on iPhone mobile phone profit distribution shows that the 2010 Apple company each sell a iPhone, all of which 58.5% of the profits; remove the main raw material supply for the profit sharing, other profit distribution are: not classified projects accounted for 4.4%, non China workers accounted for 3.5%, Apple outside of the United States won 2.4% industrial workers, practitioners, Chinese 1.8%, Europe 1.8%, Japan and Taiwan each won 0.5% China (Figure 1). Because there is no technical content at all in the value chain, although a strong labor force behind it the obtained is the bottom, few of the meager profit. Competitive bronze bearings China Manufacturer

Technical characteristics of traditional industrialization is the use of mechanization, electrification and automation, large-scale production and sales volume. In the current complex international and domestic competition environment, to enhance the status of China’s manufacturing industry in the global industry value chain, manufacturing industry to solve the problem of big but not strong, must change from the mode of production the traditional mode of production to intelligence. Competitive bronze bearings China Manufacturer

Technical features of modern industrialization, in addition to the physical system (mechanical, electrical, automation), but also through the integration of information systems (computer, information, network), and ultimately the information of physical systems (intelligent). “Internet plus industry” will effectively push the Chinese manufacturing industry to the development of intelligence, there are a huge space and potential.

Two, the smile curve shows the arrival of the opportunity

Mentioned Chinese manufacturing have to mention the smiling curve. The smile curve is Acer Group founder Stan Shih in 1992 proposed the famous theory of business, because of its relatively appropriate interpretation of the industry division in industrial production mode and recognized by the industry, has become the development philosophy of many enterprises. Competitive bronze bearings China Manufacturer

The smile curve of an industrial chain is divided into three sections, namely, research and design, production and manufacturing, marketing and service, the manufacturing process is always in low profit sectors on the industrial chain (Figure 2). Thus, manufacturing firms always continue to pursue some day in the future to design and brand marketing ends while in the international industrial division of labor system in developed countries, the enterprises tend to hold research and design, marketing and service of high-end industrial chain position, producers in the developing world is extrusion production and manufacture in low profit zone. To the end position of the industrial chain in the international industrial division of labor system, extending to both ends of the smile curve, has the developing world is expected to top manufacturers and not the goal. Competitive bronze bearings China Manufacturer

In the industrial chain, added more reflected at both ends: research and design, marketing and service, and in the production and process of manufacturing value added. The global industrial chain, although “China manufacturing” overwhelming, but China manufacturing are mostly in production and manufacturing sectors in the middle region, smiling curve put a lot of labor, get a little profit.

In the past, enterprises with large-scale production, sales volume is characterized by the scale of production, to provide standardized products, access to the industry average profit, the enterprise according to the research and design, production and manufacturing, marketing and service of industrial division of labor, share value. In the research and design of smile curve at both ends of the marketing and the service is relatively high profit area, the profit pattern usually have good continuity; and in the middle of the bottom area of the “smile curve” of production and manufacturing can only maintain the relatively small profit, but due to technical content is low, the entry threshold is relatively low, resulting in more intense competition, strong substitutability, in order to further squeeze profit margins. The micro signal: Lean Production Promotion Center. Competitive bronze bearings China Manufacturer

Therefore, stay in the “smile curve” is not a permanent solution at the bottom of the manufacturing industry, restructuring and upgrading urgently. Firstly, Chinese resources environment is changing. In addition to high energy consumption caused by the deterioration of the environment difficult to continue, with the regression of the demographic dividend, Chinese labor resources will not past so competitive, professional skills of migrant workers shortage often have been reported frequently. Secondly, the rising cost of labor in the production China attraction is declining, for example, Foxconn began to invest and build factories in Vietnam, Adidas and Nike also has been the main factory from Chinese moved to Southeast Asia. That is to say, Chinese manufacturing “meager profit” or even difficult to sustain manufacturing industry. Facing the increasingly severe competition situation, Chinese manufacturing industry upgrade is imminent. Competitive bronze bearings China Manufacturer

But China’s manufacturing sector is not going to be able to get out of the bottom of the “smile curve”. So far, we’re still talking about how to get out of the bottom of the smile curve

We think the idea of low value-added situation to get rid of the traditional manufacturing industry, it is necessary to extend to the ends of the smile curve “development and services, through the use of high technology to achieve industrial upgrading and development of manufacturing service industry is the only way which must be passed around. From the industry perspective, the research and design of link means that the development of high-tech industries,” marketing and service “is to improve manufacturing processes surrounding the proportion of service industry. However, this process will encounter many challenges, and not materially out of the bottom of the smiling curve, nor in the short term out of the bottom of the smiling curve. Competitive bronze bearings China Manufacturer

However, “Internet plus industry” era, we do not have to dwell on this problem. Because the manufacturing industry in the traditional sense of value creation and distribution patterns are changing, with the Internet platform, enterprises, customers and stakeholders are involved in the value creation, value delivery and value realization of manufacturing because of each link. “Internet plus industry” is not only the “information sharing”, also will carry out extensive physical sharing “, so as to form new value creation and sharing pattern, to create a new shared economy, driven by the public and the business innovation. Competitive bronze bearings China Manufacturer

The future of the industrial system, will be more through the Internet technology, to carry out network collaborative mode of industrial production, to develop to fully adapt to the production of products, this adaptability will enable enterprises in the face of rapid changes in customer demand, and easily respond, and ensure the production competitive, meet the personalized needs of customers. Manufacturing enterprises will no longer top-down control, no longer engaged in design and R & D alone, no longer engaged in the production and manufacturing sectors alone, are no longer engaged in marketing and service sectors alone. In contrast, manufacturing enterprises starting from the customer needs to accept orders, to seek cooperation in production, procurement of raw materials together, the product design, production plan and put into production, the links are connected together through the network, communicate with each other, and the information will be transferred along the raw materials, Indicating the necessary production steps to ensure that the final product meets the specific needs of the customer, this manufacturing flexibility undoubtedly represents the future direction of the manufacturing industry, but also indicates that the global manufacturing industry will usher in fierce competition in technological upgrading. Competitive bronze bearings China Manufacturer

What’s more, with the increasing diversification of social life, consumer awareness more personalized. Both research and design, production and manufacturing, and marketing and service must to meet consumer demand as the starting point and end point, the consumer experience of participation in the form of subversion of the traditional vertical division system of production, the theoretical basis of the smile curve will no longer exist.

The theory of the smile curve mode, through the enterprise production scale, process management, to provide standardized products at low cost, obtain the competitive advantage, enterprise size and strength play a decisive role. “Internet plus industrial” mode, enterprise, customer and each interest party through the Internet, widely, depth to participate in value creation, value transfer, and other aspects of the realization of the value of customers, personalized products, customized services, enterprise profit. Competitive bronze bearings China Manufacturer

Apple iPhone mobile phone millet and Millet’s mobile phone, is a successful case of.IPhone mobile phone products in the package as in the past to write, “Designed by Apple in California Assembled in China, which means” Apple. “In the United States in the Western Pacific coast of California for the product development and design in Chinese, implementation of the product assembly.” however, in addition to a few other parts, most of the parts are not produced by Apple company, it’s not a secret.Apple company on the world all kinds of excellent suppliers for the product portfolio, producing iPhone, iPad. so, iPhone is “China”? Is “made in America”? Obviously not. According to Japanese media reports, iPhone6, camera by SONY LCD panel suppliers, supplier SHARP, high-frequency components by Murata or TDK supply, LED backlight module is composed of Minebea Japan company supply, but the assembly process is located in the territory of the Chinese Foxconn company to complete.

Millet itself does not personally produce mobile phones, only focus on design, research and development and customer service, mobile phone production is also through the network collaboration, by the similar Foxconn other cooperative enterprises responsible for manufacturing

That is, with the development of the industry Internet plus “, each link in the value chain will work together to create value, value transfer, value share. In this way,” Internet plus industrial manufacturing industry “will be on the” Smiling Curve “the value chain of a subversive heavy plastic. The customization design the front end to the user; the user orders directly to the enterprise, but also weakened the back-end sales, thereby flattening” smile curve “, and to form a ring value.

Farewell to the “Smiling Curve”, this is the “Internet plus industrial era, the inevitable trend of the future manufacturing.

Competitive bronze bearings China Manufacturer

Competitive bronze bearings China Manufacturer


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