The haze of the new crown pneumonia epidemic has not dissipated, and the global economic recovery is uncertain; The supply chain cycle is blocked, the flow of goods is slowing down, and the world economic and trade pattern is adding turmoil; "Black swan" events occur frequently, repeatedly testing the endurance and judgment of enterprises... It can be said that the biggest risk facing the world economy today is the increasingly prominent uncertainty.
Deep in it, thousands of industries show different resilience. Some enterprises have already set sail, through continuous digital transformation, to seize the development opportunities in the new wave; Some enterprises are trapped in it and stumble in the fog of transformation; There are also some enterprises that are subject to various conditions and are always in a passive wait-and-see state. A number of well-known consulting firms and think tanks around the world have found that the more digital companies are, the less they will be affected by the epidemic, and the more quickly they can adapt to market changes and innovate.
Today, digital transformation has gradually entered the deep waters. In the first half of the transformation, how has the level of digitalization of enterprises of different sizes and industries changed? What are the practical results? The executive survey jointly sponsored by the Schneider Electric Business Value Institute and the International Economic and Technical Cooperation Center of the Ministry of Industry and Information Technology provides a closer insight into the new trends in the digital transformation of China's manufacturing industry from a more imaginative perspective.
What did the breakout do right?
According to the "Driving Digital Transformation - Digital Empowerment Green Intelligent Manufacturing Executive Insights 2022" (hereinafter referred to as the Insight Report) released by Schneider Electric Business Value Institute, Chinese manufacturing companies are practicing digital transformation and making great progress in the wave of digitalization sweeping the world: in the survey spanning more than 10 industry categories and covering enterprises of different sizes, more than 50% of the respondents have reached the "advanced digital level". Compared with 2021, this indicator increased by 9% - this is the result of the combination of internal and external driving forces: macro policies, market demand, and the company's own factors are jointly determined, and only by surviving and developing in the tide of digital disruption can we seek the future.
Pharmaceutical companies facing multiple challenges are well aware of this. "From the external point of view, there are national regulatory requirements such as improving the drug informatization traceability system and promoting the digital management of the whole life cycle of drugs; From an internal point of view, digitalization is an important boost to the quality management, research and development level, production control, supply chain management and other aspects of drugs. Jiang Baogang, director of the information department of China Biotechnology Co., Ltd., believes that digital transformation is a must-do topic. In July this year, Wu Hequan, an academician of the Chinese Academy of Engineering, stressed when talking about the digital economy of small and medium-sized enterprises, that digital transformation has become a key strategy for enterprises to cope with external uncertainty.
According to the survey, the strategic goals and realistic demands of digital transformation of enterprises are highly concentrated, but they face many challenges and pain points in the landing process. How to get out of this predicament? The Insights report distills the business practices that have successfully mastered digital transformation into four value propositions: planning first, scenario focus, agility and resilience, and ecological win-win.
The program is more and more reflected in the successful practice of leading enterprises. The survey found that more than 80% of leading companies highly recognize the importance of top-level planning, but there are still differences in the formulation of planning at different stages. Leading companies are paying more attention to "looking up at the road" – using planning to clarify the long-term competitiveness and return on investment of digital transformation; Non-leading companies are more focused on "working with their heads down" – companies tend to face greater short-term survival pressures and ignore the value of top-level planning and the sustainability of development.
There is no answer to digital transformation that is "fresh in one trick and all over the world", and strategic planning needs to be customized due to differences in industries and enterprises. As an expert in digital transformation and a long-term practitioner of sustainability, the Schneider Electric Business Value Institute has developed five cornerstones of strategy development based on its own practical and consulting experience: strategic intent, market insights, best practices, technology trends, and capability gaps. Each perspective is not isolated, and agile transformation can only be successfully achieved by dynamically adjusting in environmental changes and practices.
Xinmei Electric has formed a production scale with an annual output value of more than 1 billion yuan, but it still faces the practical challenge of how to set goals and find paths for digital transformation. Schneider Electric takes "digital transformation top-level planning", "lean production planning and construction", and "integrated energy management planning" as the transformation entry point to gradually implement the strategic decision-making of enterprise digital transformation. In 2020, Xinmei Electric's new energy power generation increased by 146% annually, the annual new energy penetration rate increased to 70%, and the total annual electricity expenditure was saved by more than 30%, taking the lead in obtaining the first "carbon neutrality" certificate of Zhejiang Province.
Forging "lean" stimulates endogenous power
Digital transformation can't happen overnight, it's more like a long run to unleash digital productivity. 90% of the executives surveyed believe that digital transformation needs to find the right entry point, and new technologies need to be integrated into the production and operation scenarios of various industries. The insight report starts from eight common scenarios for manufacturing companies and concludes that lean production is still the top priority for enterprises, and the focus on carbon emission management is increasing.
Schneider Electric Wuhan plant
Schneider Electric's Wuhan plant has been continuously upgraded and transformed to a new stage of digital transformation on the basis of consolidating lean management. In the world's first batch of "lighthouse factories" jointly selected by the World Economic Forum in Davos and McKinsey, Schneider Electric's Wuhan factory won the title of "Developing Lighthouse Factory", becoming a model for global smart factories.
As one of the first customers to introduce Schneider Electric's green intelligent manufacturing lean consulting landing, a distribution box factory hopes to be ahead of competitors on the road of lean and digital transformation, leading the low-voltage terminal distribution equipment industry. The distribution box products have the characteristics of complex structure, customization and small amount of diversity, resulting in enterprises facing operational management pain points such as diverse production processes, material management difficulties, and long production cycles.
Lean transformation has significantly improved the production and operation effect of the enterprise. By introducing production methods that ensure that production flows, reduce work in process and improve production efficiency, its production capacity is increased by 20% and inventory is reduced by 75%; Through the cultivation of scientific planning and scheduling, production management mode, the delivery time is shortened by 59%; Using new technology and workstation design, the production line area is saved by 30%.
Build an ecosystem
Enterprises of any size are currently facing multiple complex factors at home and abroad, such as repeated epidemics, supply chain disruptions, and commodity price fluctuations. The insight report found that more than 90% of the supply chains of enterprises have been affected by the epidemic, and supply chain challenges have become normalized. According to the Schneider Electric Business Value Institute, adapting to this "new normal" requires an active supply chain. But the survey shows that only 4% of companies have done this.
Thanks to its agile and resilient supply chain, Schneider Electric was able to withstand the post-pandemic supply chain crisis to the greatest extent possible. Mourad TAMOUD, Chief Supply Chain Officer of Schneider Electric, said in an interview in October 2021 that in the midst of the epidemic and supply chain crisis, end-to-end supply chain management has enabled Schneider Electric and its supply chain network to work together and operate efficiently. The Gartner Annual Global Supply Chain List is recognized by the industry as a yardstick for measuring the level of a company's supply chain. Schneider Electric is ranked second in the 2022 list and represents a "self-stabilizing supply chain".
Schneider Electric also relies on its strong supply chain capabilities to help partners navigate their business woes. In recent years, the increase in market demand, product technology iteration and fluctuations in the supply of raw materials caused by changes in the external environment such as the new crown epidemic, the international situation, and bulk materials have brought great challenges to the product delivery of a leading charging pile company. After experiencing multiple supply risks, the company realized that the supply chain could not keep up with the pace of business development. By partnering with Schneider Electric, the company was able to rapidly improve its supply chain end-to-end collaboration, agile response, and timely delivery, with significant improvements in on-time delivery rates, sales accuracy, and on-time time-to-market of new products.
The survey results also show that 83% of executives believe that in the digital era, competition between companies has expanded to the ecosystem, and companies should further strengthen their interaction with the ecosystem. The systematization and complexity of digital transformation also determine the importance of ecological win-win, Schneider Electric Business Value Institute believes that uniting various types and industries of ecosystem partners and applying their strengths can effectively promote digital transformation, emphasizing open innovation and ecological innovation of joint innovation is becoming a highly respected ecosystem cooperation model.
Schneider Electric's ecosystem is not limited to large enterprises, but also includes the mutual empowerment of small and medium-sized enterprises. For example, the green intelligent manufacturing win plan brings together Schneider Electric's technical advantages, as well as governments, enterprises, research institutions and other forces, aiming to empower small and medium-sized enterprises to enhance digital innovation capabilities, help small and medium-sized enterprises to achieve PoC joint creation program building, landing and scale, this year is the third year of the development of the plan.
Xiong Yi, Senior Vice President, Head of Strategy and Business Development China at Schneider Electric, and President of the Business Value Institute
"In different scenarios, a company may be the core or a supporter, either the sun or the moon or the stars, thus forming a wide coverage and dynamic ecosystem." Xiong Yi, Senior Vice President of Schneider Electric, Head of Strategy and Development China, and President of the Business Value Research Institute, said that through an open platform, Schneider Electric and partners work together to create more complete end-to-end digital solutions.